Chapter 23 Practice Materials

Chapter 23

Performance Evaluation Using Variances From Standard Costs

MULTIPLE CHOICE

1. Which of the following conditions normally would not indicate that standard costs should be revised?

a. The engineering department has revised product specifications in responding to customer suggestions.

b. The company has signed a new union contract which increases the factory wages on average by $2.00 an hour.

c. Actual costs differed from standard costs for the preceding week. d. The world price of raw materials increased. ANS: C DIF: Difficult OBJ: 23-01

NAT: AACSB Analytic | IMA-Performance Measurement

2. Standards that represent levels of operation that can be attained with reasonable effort are called:

a. theoretical standards b. ideal standards c. variable standards d. normal standards ANS: D DIF: Difficult OBJ: 23-01

NAT: AACSB Analytic | IMA-Performance Measurement

3. Manufacturing companies use standard costs for the following except:

a. Variable costs b. Direct Materials c. Direct Labor

d. Factory Overhead ANS: A DIF: Easy OBJ: 23-01

NAT: AACSB Analytic | IMA-Performance Measurement

4. Standard costs are used in companies for a variety of reasons. Which of the following is not one of the

benefits for using standard costs?

a. Used to indicate where changes in technology and machinery need to be made. b. Used to value inventory

c. Used to plan direct materials, direct labor, and factory manufacturing cost. d. Used to control costs. ANS: A DIF: Easy OBJ: 23-01

NAT: AACSB Analytic | IMA-Performance Measurement

221

222 ??Chapter 23/Performance Evaluation Using Variances From Standard Costs

5. The principle of exceptions allows managers to

a. focus on correcting variances between standard costs and actual costs. b. focus on correcting variances between variable costs and actual costs. c. focus on correcting variances between competitor’s costs and actual costs. d. focus on correcting variances between competitor’s costs and standard costs. ANS: A DIF: Easy OBJ: 23-01

NAT: AACSB Analytic | IMA-Performance Measurement

6. Several people play an essential part in setting standards. Which of the following is incorrect as to

setting standards?

a. Accountants expresses judgement in dollars and cents.

b. Engineers identify material, labor, and machine requirements. c. Human resource managers provide personnel information.

d. Quality managers provide quality measures that will be used to evaluate rejects. ANS: D DIF: Moderate OBJ: 23-01

NAT: AACSB Analytic | IMA-Performance Measurement

7. Periodic comparisons between planned objectives and actual performance are reported in:

a. zero-base reports

b. budget performance reports c. master budgets d. budgets ANS: B DIF: Easy OBJ: 23-02

NAT: AACSB Analytic | IMA-Performance Measurement

8. The standard price and quantity of direct materials are separated because:

a. GAAP reporting requires this separation

b. direct materials prices are controlled by the purchasing department, and quantity used is controlled by the production department

c. standard quantities are more difficult to estimate than standard prices d. standard prices change more frequently than standard quantities ANS: B DIF: Easy OBJ: 23-02

NAT: AACSB Analytic | IMA-Performance Measurement

9. Standard costs are divided into which of the following components?

a. Price Standard and Quantity Standard b. Materials Standard and Labor Standard c. Quality Standard and Quantity Standard d. Price Standard and Quantity Standard ANS: D DIF: Easy OBJ: 23-02

NAT: AACSB Analytic | IMA-Performance Measurement

Chapter 23/Performance Evaluation Using Variances From Standard Costs ? 223

10. A favorable cost variance occurs when

a. Actual costs are more than standard costs. b. Standard costs are more than actual costs. c. Standard costs are less than actual costs. d. None of the above. ANS: B DIF: Easy OBJ: 23-02

NAT: AACSB Analytic | IMA-Performance Measurement

11. Total manufacturing cost variance includes:

a. Direct materials price variance, direct labor cost variance, and fixed factory overhead volume variance

b. Direct materials cost variance, direct labor rate variance, and factory overhead cost variance c. Direct materials cost variance, direct labor cost variance, variable factory overhead controllable variance

d. Direct materials cost variance, direct labor cost variance, factory overhead cost variance ANS: D DIF: Moderate OBJ: 23-02

NAT: AACSB Analytic | IMA-Performance Measurement

12. Which of the following is not a reason standard costs are separated in two components?

a. the price and quantity variances need to be identified separately to correct the actual major differences.

b. identifying variances determines which manager must find a solution to major discrepancies.

c. if a negative variance is over-shadowed by a favorable variance, managers may overlook potential corrections.

d. variances brings attention to discrepancies in the budget and requires managers to revise budgets closer to actual. ANS: D DIF: Difficult OBJ: 23-02

NAT: AACSB Analytic | IMA-Performance Measurement

13. The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of

product are as follows:

Standard Costs Direct materials (per completed unit) 1.04 kilograms @$8.75

Actual Costs Direct materials 2,500 kilograms @ $8

The amount of direct materials price variance is: a. $1,875 unfavorable b. $1,950 favorable c. $1,875 favorable d. $1,950 unfavorable ANS: C DIF: Moderate OBJ: 23 …… 此处隐藏：6067字，全部文档内容请下载后查看。喜欢就下载吧 ……