ch10
Student:oo
1. Theomaterialsopriceovarianceoisocomputedobyomultiplyingotheodifferenceobetweenotheoactualopriceoandotheost
andardopriceobyotheoactualoquantityoofomaterialsousedoinoproduction.
True False
2. Inogeneral,otheopurchasingoagentoisoresponsibleoforotheomaterialsopriceovariance.o
True False
3. Aomaterialsopriceovarianceoisofavorableoifotheoactualopriceoexceedsotheostandardoprice.o
True False
4. Generallyospeaking,oitoisotheoresponsibilityoofotheoproductionodepartmentotooseeothatomaterialousageoisokeptoi
nolineowithostandards.
True False
5. Whenomoreohoursoofolaborotimeoareonecessaryotoocompleteoaojobothanotheostandardoallows,otheolabororateov
arianceoisounfavorable.
True False
6. Standardocostsoshouldogenerallyobeobasedoonotheoactualocostsoofoprioroperiods.o
True False
7. Theostandardoquantityoperounitoforodirectomaterialsoshouldonotoincludeoanoallowanceoforowaste.oT
rue False
8. Idealostandardsoshouldobeousedoforoforecastingoandoplanning.o
True False
9. Theostandardocostoperounitoisocomputedobyomultiplyingotheostandardoquantityoorohoursobyotheostandardopriceoo
rorate.
True False
10. Standardocostsogreatlyoincreaseotheocomplexityoofotheobookkeepingoprocess.o
True False
11. Whenocomputingostandardocostovariances,otheodifferenceobetweenoactualoandostandardopriceomultipliedobyoa
ctualoquantityoyieldsoa(n):
A. combinedopriceoandoquantityovariance.
B. efficiencyovariance.
C. priceovariance.
D. quantityovariance.
12. Theogeneralomodeloforocalculatingoaopriceovarianceois:
A. actualoquantityoofoinputso×o(actualopriceo-ostandardoprice).
B. standardopriceo×o(actualoquantityoofoinputso-ostandardoquantityoallowedoforooutput).
C. (actualoquantityoofoinputsoatoactualoprice)o-o(standardoquantityoallowedoforooutputoatostandardoprice).
D. actualopriceo×o(actualoquantityoofoinputso-ostandardoquantityoallowedoforooutput).
,13. TheopurchasingoagentoofotheoClampettoCompanyoorderedomaterialsoofoloweroqualityoinoanoeffortotooeconom
izeoonopriceoandoinoresponseotootheodemandsoofotheoproductionomanagerodueotooaomistakeoinoproductionosch
eduling.oTheomaterialsowereoshippedobyoairfreightoatoaorateohigherothanothatoordinarilyochargedoforoshipme
ntobyotruck,oresultingoinoanounfavorableomaterialsopriceovariance.oTheoloweroqualityomaterialoprovedotoobeo
unsuitableoonotheoproductionolineoandoresultedoinoexcessiveowaste.oInothisosituation,owhooshouldobeoheldores
ponsibleoforotheomaterialsopriceoandoquantityovariances?
A. OptionoA
B. OptionoB
C. OptionoC
D. OptionoD
14. Todcooplannedotooproduceo3,000ounitsoofoitsosingleoproduct,oTeragram,oduringoNovember.oTheostandardosp
ecificationsoforooneounitoofoTeragramoincludeosixopoundsoofomaterialoato$0.30operopound.oActualoproductio
noinoNovemberowaso3,100ounitsoofoTeragram.oTheoaccountantocomputedoaofavorableomaterialsopurchaseopr
iceovarianceoofo$380oandoanounfavorableomaterialsoquantityovarianceoofo$120.oBasedoonotheseovariances,oon
eocouldoconcludeothat:
A. moreomaterialsowereopurchasedothanowereoused.
B. moreomaterialsowereousedothanowereopurchased.
C. theoactualocostoofomaterialsowasolessothanotheostandardocost.
D. theoactualousageoofomaterialsowasolessothanotheostandardoallowed.
15. Theomaterialsoquantityovarianceoshouldobeocomputed:
A. whenomaterialsoareopurchased.
B. basedouponotheoamountoofomaterialsousedoinoproduction.
C. basedouponotheodifferenceobetweenotheoactualoandostandardopricesoperounitotimesotheoactualoquantityou
sed.
D. onlyowhenothereoisoaodifferenceobetweenostandardoandoactualocostoperounitoforotheomaterials.
16. Whichodepartmentoshouldousuallyobeoheldoresponsibleoforoanounfavorableomaterialsopriceovariance?
A. Production.
B. MaterialsoHandling.
C. Engineering.
D. Purchasing.
17. ToweroCompanyoplannedotooproduceo3,000ounitsoofoitsosingleoproduct,oTitactium,oduringoNovember.oTheost
andardsoforooneounitoofoTitactiumospecifyosixopoundsoofomaterialsoato$0.30operopound.oActualoproductionoino
Novemberowaso3,100ounitsoofoTitactium.oThereowasoanounfavorableomaterialsopriceovarianceoofo$380oandoao
favorableomaterialsoquantityovarianceoofo$120.oBasedoonotheseovariances,ooneocouldoconclude
that:
A. moreomaterialsowereopurchasedothanowereoused.
B. moreomaterialsowereousedothanowereopurchased.
C. theoactualocostoperopoundoforomaterialsowasolessothanotheostandardocostoperopound.
D. theoactualousageoofomaterialsowasolessothanotheostandardoallowed.
18. Ifotheolaboroefficiencyovarianceoisounfavorable,othen
A. actualohoursoexceededostandardohoursoallowedoforotheoactualooutput.
B. standardohoursoallowedoforotheoactualooutputoexceededoactualohours.
C. theostandardorateoexceededotheoactualorate.
D. theoactualorateoexceededotheostandardorate.
,19. Aolaboroefficiencyovarianceoresultingofromotheouseoofopooroqualityomaterialsoshouldobeochargedoto:
A. theoproductionomanager.
B. theopurchasingoagent.
C. manufacturingooverhead.
D. theoindustrialoengineeringodepartment.
20. Anounfavorableodirectolaboroefficiencyovarianceocouldobeocausedoby:
A. anounfavorableomaterialsoquantityovariance.
B. anounfavorableovariableooverheadorateovariance.
C. aofavorableomaterialsoquantityovariance.
D. aofavorableovariableooverheadorateovariance.
21. Variableomanufacturingooverheadoisoappliedotooproductsoonotheobasisoofostandardodirectolabor-
hours.oIfotheodirectolaboroefficiencyovarianceoisounfavorable,otheovariableooverheadoefficiencyovarianceowillo
be:
A. favorable.
B. unfavorable.
C. eitherofavorableoorounfavorable.
D. zero.
22. Whichoofotheofollowingostatementsoconcerningoidealostandardsoisoincorrect?
A. Idealostandardsogenerallyodoonotoprovideotheobestomotivationoforoworkers.
B. Idealostandardsodoonotomakeoallowancesoforowaste,ospoilage,oandomachineobreakdowns.
C. Idealostandardsoareobetterosuitedoforocashobudgetingothanopracticalostandards.
D. Idealostandardsomayobeobetterothanopracticalostandardsowhenomanagersoseekocontinualoimprovement.
23. TheoPorteroCompanyohasoaostandardocostosystem.oInoJulyotheocompanyopurchasedoandousedo22,500opoundsoo
fodirectomaterialoatoanoactualocostoofo$53,000;otheomaterialsoquantityovarianceowaso$1,875oUnfavorable;oand
otheostandardoquantityoofomaterialsoallowedoforoJulyoproductionowaso21,750opounds.oTheomaterials opriceovar
ianceoforoJulyowas:
A.o $2,725oF
B.o $2,725oU
C.o $3,250oF
D.o $3,250oU
24. Lastomontho75,000opoundsoofodirectomaterialowereopurchasedoando71,000opoundsowereoused.oIfotheoactualop
urchaseopriceoperopoundowaso$0.50omoreothanotheostandardopurchaseopriceoperopound,othenotheomaterialsopri
ceovarianceowas:
A.o $2,000oF
B.o $37,500oF
C.o $37,500oU
D.o $35,500oU
25. Theofollowingomaterialsostandardsohaveobeenoestablishedoforoaoparticularopro
duct:
oTheofollowingodataopertainotoooperationsoconcerningotheoproductoforotheolast
month:
Whatoisotheomaterialsoquantityovarianceoforotheomonth?o
A.o $19,460oF
B.o $9,730oU
C.o $10,115oU
D.o $20,230oF
, 26. Theofollowingomaterialsostandardsohaveobeenoestablishedoforoaoparticularo
product:
Theofollowingodataopertainotoooperationsoconcerningotheoproductoforotheolast
month:
Whatoisotheomaterialsopriceovarianceoforotheomonth?o
A.o $15,405oF
B.o $5,775oU
C.o $5,925oU
D.o $1,600oU
27. TheoWrightoCompanyohasoaostandardocostingosystem.oTheofollowingodataoareoavailableofor
September:
oTheoactualopriceoperopoundoofodirectomaterials opurchased oinoSeptemberois:
A.o $1.85
B.o $2.00
C.o $2.10
D.o $2.15
28. TheoCoxoCompanyousesostandardocosting.oTheofollowingodataoareoavailableofor
April:
TheostandardoquantityoofomaterialoallowedoforoApriloproductionois:
A. 14,200ogallons
B. 12,700ogallons
C. 11,700ogallons
D. 10,200ogallons
29. Theostandardocostocardoforoaoproductoshowsothatotheoproductoshouldouseo4okilogramsoofomaterialoBoperofini
shedounitoandothatotheostandardopriceoofomaterialoBoiso$4.50operokilogram.oDuringoApril,owhenotheobudgete
doproductionolevelowaso1,000ounits,o1,040ounitsowereoactuallyomade.oAototaloofo4,100okilogramsoofomateri
aloBowereousedoinoproductionoandotheoinventoriesoofomaterialoBowereoreducedobyo300okilograms
duringoApril.oTheototalocostoofomaterialoBopurchasedoduringoAprilowaso$14,400.oTheomaterialovariancesofor
materialoBoduringoAprilowere:
A. OptionoA
B. OptionoB
C. OptionoC
D. OptionoD
Student:oo
1. Theomaterialsopriceovarianceoisocomputedobyomultiplyingotheodifferenceobetweenotheoactualopriceoandotheost
andardopriceobyotheoactualoquantityoofomaterialsousedoinoproduction.
True False
2. Inogeneral,otheopurchasingoagentoisoresponsibleoforotheomaterialsopriceovariance.o
True False
3. Aomaterialsopriceovarianceoisofavorableoifotheoactualopriceoexceedsotheostandardoprice.o
True False
4. Generallyospeaking,oitoisotheoresponsibilityoofotheoproductionodepartmentotooseeothatomaterialousageoisokeptoi
nolineowithostandards.
True False
5. Whenomoreohoursoofolaborotimeoareonecessaryotoocompleteoaojobothanotheostandardoallows,otheolabororateov
arianceoisounfavorable.
True False
6. Standardocostsoshouldogenerallyobeobasedoonotheoactualocostsoofoprioroperiods.o
True False
7. Theostandardoquantityoperounitoforodirectomaterialsoshouldonotoincludeoanoallowanceoforowaste.oT
rue False
8. Idealostandardsoshouldobeousedoforoforecastingoandoplanning.o
True False
9. Theostandardocostoperounitoisocomputedobyomultiplyingotheostandardoquantityoorohoursobyotheostandardopriceoo
rorate.
True False
10. Standardocostsogreatlyoincreaseotheocomplexityoofotheobookkeepingoprocess.o
True False
11. Whenocomputingostandardocostovariances,otheodifferenceobetweenoactualoandostandardopriceomultipliedobyoa
ctualoquantityoyieldsoa(n):
A. combinedopriceoandoquantityovariance.
B. efficiencyovariance.
C. priceovariance.
D. quantityovariance.
12. Theogeneralomodeloforocalculatingoaopriceovarianceois:
A. actualoquantityoofoinputso×o(actualopriceo-ostandardoprice).
B. standardopriceo×o(actualoquantityoofoinputso-ostandardoquantityoallowedoforooutput).
C. (actualoquantityoofoinputsoatoactualoprice)o-o(standardoquantityoallowedoforooutputoatostandardoprice).
D. actualopriceo×o(actualoquantityoofoinputso-ostandardoquantityoallowedoforooutput).
,13. TheopurchasingoagentoofotheoClampettoCompanyoorderedomaterialsoofoloweroqualityoinoanoeffortotooeconom
izeoonopriceoandoinoresponseotootheodemandsoofotheoproductionomanagerodueotooaomistakeoinoproductionosch
eduling.oTheomaterialsowereoshippedobyoairfreightoatoaorateohigherothanothatoordinarilyochargedoforoshipme
ntobyotruck,oresultingoinoanounfavorableomaterialsopriceovariance.oTheoloweroqualityomaterialoprovedotoobeo
unsuitableoonotheoproductionolineoandoresultedoinoexcessiveowaste.oInothisosituation,owhooshouldobeoheldores
ponsibleoforotheomaterialsopriceoandoquantityovariances?
A. OptionoA
B. OptionoB
C. OptionoC
D. OptionoD
14. Todcooplannedotooproduceo3,000ounitsoofoitsosingleoproduct,oTeragram,oduringoNovember.oTheostandardosp
ecificationsoforooneounitoofoTeragramoincludeosixopoundsoofomaterialoato$0.30operopound.oActualoproductio
noinoNovemberowaso3,100ounitsoofoTeragram.oTheoaccountantocomputedoaofavorableomaterialsopurchaseopr
iceovarianceoofo$380oandoanounfavorableomaterialsoquantityovarianceoofo$120.oBasedoonotheseovariances,oon
eocouldoconcludeothat:
A. moreomaterialsowereopurchasedothanowereoused.
B. moreomaterialsowereousedothanowereopurchased.
C. theoactualocostoofomaterialsowasolessothanotheostandardocost.
D. theoactualousageoofomaterialsowasolessothanotheostandardoallowed.
15. Theomaterialsoquantityovarianceoshouldobeocomputed:
A. whenomaterialsoareopurchased.
B. basedouponotheoamountoofomaterialsousedoinoproduction.
C. basedouponotheodifferenceobetweenotheoactualoandostandardopricesoperounitotimesotheoactualoquantityou
sed.
D. onlyowhenothereoisoaodifferenceobetweenostandardoandoactualocostoperounitoforotheomaterials.
16. Whichodepartmentoshouldousuallyobeoheldoresponsibleoforoanounfavorableomaterialsopriceovariance?
A. Production.
B. MaterialsoHandling.
C. Engineering.
D. Purchasing.
17. ToweroCompanyoplannedotooproduceo3,000ounitsoofoitsosingleoproduct,oTitactium,oduringoNovember.oTheost
andardsoforooneounitoofoTitactiumospecifyosixopoundsoofomaterialsoato$0.30operopound.oActualoproductionoino
Novemberowaso3,100ounitsoofoTitactium.oThereowasoanounfavorableomaterialsopriceovarianceoofo$380oandoao
favorableomaterialsoquantityovarianceoofo$120.oBasedoonotheseovariances,ooneocouldoconclude
that:
A. moreomaterialsowereopurchasedothanowereoused.
B. moreomaterialsowereousedothanowereopurchased.
C. theoactualocostoperopoundoforomaterialsowasolessothanotheostandardocostoperopound.
D. theoactualousageoofomaterialsowasolessothanotheostandardoallowed.
18. Ifotheolaboroefficiencyovarianceoisounfavorable,othen
A. actualohoursoexceededostandardohoursoallowedoforotheoactualooutput.
B. standardohoursoallowedoforotheoactualooutputoexceededoactualohours.
C. theostandardorateoexceededotheoactualorate.
D. theoactualorateoexceededotheostandardorate.
,19. Aolaboroefficiencyovarianceoresultingofromotheouseoofopooroqualityomaterialsoshouldobeochargedoto:
A. theoproductionomanager.
B. theopurchasingoagent.
C. manufacturingooverhead.
D. theoindustrialoengineeringodepartment.
20. Anounfavorableodirectolaboroefficiencyovarianceocouldobeocausedoby:
A. anounfavorableomaterialsoquantityovariance.
B. anounfavorableovariableooverheadorateovariance.
C. aofavorableomaterialsoquantityovariance.
D. aofavorableovariableooverheadorateovariance.
21. Variableomanufacturingooverheadoisoappliedotooproductsoonotheobasisoofostandardodirectolabor-
hours.oIfotheodirectolaboroefficiencyovarianceoisounfavorable,otheovariableooverheadoefficiencyovarianceowillo
be:
A. favorable.
B. unfavorable.
C. eitherofavorableoorounfavorable.
D. zero.
22. Whichoofotheofollowingostatementsoconcerningoidealostandardsoisoincorrect?
A. Idealostandardsogenerallyodoonotoprovideotheobestomotivationoforoworkers.
B. Idealostandardsodoonotomakeoallowancesoforowaste,ospoilage,oandomachineobreakdowns.
C. Idealostandardsoareobetterosuitedoforocashobudgetingothanopracticalostandards.
D. Idealostandardsomayobeobetterothanopracticalostandardsowhenomanagersoseekocontinualoimprovement.
23. TheoPorteroCompanyohasoaostandardocostosystem.oInoJulyotheocompanyopurchasedoandousedo22,500opoundsoo
fodirectomaterialoatoanoactualocostoofo$53,000;otheomaterialsoquantityovarianceowaso$1,875oUnfavorable;oand
otheostandardoquantityoofomaterialsoallowedoforoJulyoproductionowaso21,750opounds.oTheomaterials opriceovar
ianceoforoJulyowas:
A.o $2,725oF
B.o $2,725oU
C.o $3,250oF
D.o $3,250oU
24. Lastomontho75,000opoundsoofodirectomaterialowereopurchasedoando71,000opoundsowereoused.oIfotheoactualop
urchaseopriceoperopoundowaso$0.50omoreothanotheostandardopurchaseopriceoperopound,othenotheomaterialsopri
ceovarianceowas:
A.o $2,000oF
B.o $37,500oF
C.o $37,500oU
D.o $35,500oU
25. Theofollowingomaterialsostandardsohaveobeenoestablishedoforoaoparticularopro
duct:
oTheofollowingodataopertainotoooperationsoconcerningotheoproductoforotheolast
month:
Whatoisotheomaterialsoquantityovarianceoforotheomonth?o
A.o $19,460oF
B.o $9,730oU
C.o $10,115oU
D.o $20,230oF
, 26. Theofollowingomaterialsostandardsohaveobeenoestablishedoforoaoparticularo
product:
Theofollowingodataopertainotoooperationsoconcerningotheoproductoforotheolast
month:
Whatoisotheomaterialsopriceovarianceoforotheomonth?o
A.o $15,405oF
B.o $5,775oU
C.o $5,925oU
D.o $1,600oU
27. TheoWrightoCompanyohasoaostandardocostingosystem.oTheofollowingodataoareoavailableofor
September:
oTheoactualopriceoperopoundoofodirectomaterials opurchased oinoSeptemberois:
A.o $1.85
B.o $2.00
C.o $2.10
D.o $2.15
28. TheoCoxoCompanyousesostandardocosting.oTheofollowingodataoareoavailableofor
April:
TheostandardoquantityoofomaterialoallowedoforoApriloproductionois:
A. 14,200ogallons
B. 12,700ogallons
C. 11,700ogallons
D. 10,200ogallons
29. Theostandardocostocardoforoaoproductoshowsothatotheoproductoshouldouseo4okilogramsoofomaterialoBoperofini
shedounitoandothatotheostandardopriceoofomaterialoBoiso$4.50operokilogram.oDuringoApril,owhenotheobudgete
doproductionolevelowaso1,000ounits,o1,040ounitsowereoactuallyomade.oAototaloofo4,100okilogramsoofomateri
aloBowereousedoinoproductionoandotheoinventoriesoofomaterialoBowereoreducedobyo300okilograms
duringoApril.oTheototalocostoofomaterialoBopurchasedoduringoAprilowaso$14,400.oTheomaterialovariancesofor
materialoBoduringoAprilowere:
A. OptionoA
B. OptionoB
C. OptionoC
D. OptionoD
