StratCost_Standard Costing

A standard cost:

• is normally the average cost within an industry

• is almost always the actual cost from previous years.

• is the "true" cost of a unit of production.

• is a budget for the production of one unit of a product or service.

Which of the following is a predetermined estimated cost that can be used in the calculation of a variance?

• Product cost.

• Actual cost.

• Standard cost.

• Differential cost.

Variances are computed by taking the difference between which of the following?

• Product cost and period cost.

• Actual cost and differential cost.

• Price factors and rate factors.

• Actual cost and standard cost.

The term "management by exception" is best defined as:

• choosing exceptional managers.

• controlling actions of subordinates through acceptance of management techniques.

• investigating unfavorable variances.

• devoting management time to investigate significant variances.

Most companies base the calculation of the materials price variance on the:

• number of units purchased.

• number of units spoiled.

• number of units that should have been used.

• number of units actually used.

Which of the following correctly lists all the information needed to calculate a labor rate variance?

• Standard labor rate and actual hours worked.

• Actual labor rate, standard labor rate, and actual hours worked.

• Standard labor rate, actual labor rate, and actual units produced.

• Actual labor rate and actual hours worked.

Which of the following variances are most similar with respect to the manner in which they are calculated?

• Materials quantity variance and labor efficiency variance.

• Materials price variance and labor efficiency variance.

• Materials price variance, materials quantity variance, and total materials variance.

• Materials price variance and materials quantity variance

Which of the following variances cannot occur together during the same accounting period?

• Unfavorable labor rate variance and favorable labor efficiency variance

• Favorable labor rate variance and unfavorable total labor variance.

• Favorable labor efficiency variance and favorable materials quantity variance.

• None of the choices, as all of these variance combinations are possible.

A favorable labor efficiency variance is created when:

• actual labor hours worked exceed standard hours allowed.

• actual hours worked are less than the standard hours allowed.

• actual wages paid are less than amounts that should have been paid.

• actual units produced exceed budgeted production levels.

Victoria, Inc., recently completed 52,000 units of a product that was expected to consume five kilograms of direct material per finished unit. The standard price of the direct material was P9 per pound. If the firm purchased and consumed 268,000 kilograms in manufacturing (cost = P2,304,800), the direct-materials quantity variance would be figured as:

• P72,000F. 

• P72,000U. 

• P107,200F. 

• P107,200U.