ch10
Student:g
1. Thegmaterialsgpricegvariancegisgcomputedgbygmultiplyinggthegdifferencegbetweengthegactualgpricegandgt
hegstandardgpricegbygthegactualgquantitygofgmaterialsgusedgingproduction.
True False
2. Inggeneral,gthegpurchasinggagentgisgresponsiblegforgthegmaterialsgpricegvarianc
e.gTrueFalse
3. Agmaterialsgpricegvariancegisgfavorablegifgthegactualgpricegexceedsgthegstandardgpric
e.gTrueFalse
4. Generallygspeaking,gitgisgthegresponsibilitygofgthegproductiongdepartmentgtogseegthatgmaterialgusagegisgke
ptginglinegwithgstandards.
True False
5. Whengmoreghoursgofglaborgtimegaregnecessarygtogcompletegagjobgthangthegstandardgallows,gtheglaborgra
tegvariancegisgunfavorable.
True False
6. Standardgcostsgshouldggenerallygbegbasedgongthegactualgcostsgofgpriorgperiod
s.gTrue False
7. Thegstandardgquantitygpergunitgforgdirectgmaterialsgshouldgnotgincludegangallowancegforgwast
e.gTrueFalse
8. Idealgstandardsgshouldgbegusedgforgforecastinggandgplanning
.gTrue False
9. Thegstandardgcostgpergunitgisgcomputedgbygmultiplyinggthegstandardgquantitygorghoursgbygthegstandardgpri
cegorgrate.
True False
10. Standardgcostsggreatlygincreasegthegcomplexitygofgthegbookkeepinggprocess
.gTrue False
11. Whengcomputinggstandardgcostgvariances,gthegdifferencegbetweengactualgandgstandardgpricegmultipliedgb
ygactualgquantitygyieldsga(n):
A. combinedgpricegandgquantitygvariance.
B. efficiencygvariance.
C. pricegvariance.
D. quantitygvariance.
12. Theggeneralgmodelgforgcalculatinggagpricegvariancegis:
A. actualgquantitygofginputsg×g(actualgpriceg-gstandardgprice).
B. standardgpriceg×g(actualgquantitygofginputsg-gstandardgquantitygallowedgforgoutput).
C. (actualgquantitygofginputsgatgactualgprice)g-g(standardgquantitygallowedgforgoutputgatgstandardgprice).
D. actualgpriceg×g(actualgquantitygofginputsg-gstandardgquantitygallowedgforgoutput).
,13. ThegpurchasinggagentgofgthegClampettgCompanygorderedgmaterialsgofglowergqualitygingangeffortgtogecon
omizegongpricegandgingresponsegtogthegdemandsgofgthegproductiongmanagergduegtogagmistakegingproduct
iongscheduling.gThegmaterialsgweregshippedgbygairfreightgatgagrateghighergthangthatgordinarilygchargedgf
orgshipmentgbygtruck,gresultinggingangunfavorablegmaterialsgpricegvariance.gTheglowergqualitygmaterialg
provedgtogbegunsuitablegongthegproductionglinegandgresultedgingexcessivegwaste.gIngthisgsituation,gwhogs
houldgbegheldgresponsiblegforgthegmaterialsgpricegandgquantitygvariances?
A. OptiongA
B. OptiongB
C. OptiongC
D. OptiongD
14. Todcogplannedgtogproduceg3,000gunitsgofgitsgsinglegproduct,gTeragram,gduringgNovember.gThegstandar
dgspecificationsgforgonegunitgofgTeragramgincludegsixgpoundsgofgmaterialgatg$0.30gpergpound.gActualgpr
oductiongingNovembergwasg3,100gunitsgofgTeragram.gThegaccountantgcomputedgagfavorablegmaterialsgp
urchasegpricegvariancegofg$380gandgangunfavorablegmaterialsgquantitygvariancegofg$120.gBasedgongthese
gvariances,gonegcouldgconcludegthat:
A. moregmaterialsgweregpurchasedgthangweregused.
B. moregmaterialsgweregusedgthangweregpurchased.
C. thegactualgcostgofgmaterialsgwasglessgthangthegstandardgcost.
D. thegactualgusagegofgmaterialsgwasglessgthangthegstandardgallowed.
15. Thegmaterialsgquantitygvariancegshouldgbegcomputed:
A. whengmaterialsgaregpurchased.
B. basedgupongthegamountgofgmaterialsgusedgingproduction.
C. basedgupongthegdifferencegbetweengthegactualgandgstandardgpricesgpergunitgtimesgthegactualgquantit
ygused.
D. onlygwhengtheregisgagdifferencegbetweengstandardgandgactualgcostgpergunitgforgthegmaterials.
16. Whichgdepartmentgshouldgusuallygbegheldgresponsiblegforgangunfavorablegmaterialsgpricegvariance?
A. Production.
B. MaterialsgHandling.
C. Engineering.
D. Purchasing.
17. TowergCompanygplannedgtogproduceg3,000gunitsgofgitsgsinglegproduct,gTitactium,gduringgNovember.gTh
egstandardsgforgonegunitgofgTitactiumgspecifygsixgpoundsgofgmaterialsgatg$0.30gpergpound.gActualgproduct
iongingNovembergwasg3,100gunitsgofgTitactium.gTheregwasgangunfavorablegmaterialsgpricegvariancegofg$
380gandgagfavorablegmaterialsgquantitygvariancegofg$120.gBasedgongthesegvariances,gonegcouldgconclude
that:
A. moregmaterialsgweregpurchasedgthangweregused.
B. moregmaterialsgweregusedgthangweregpurchased.
C. thegactualgcostgpergpoundgforgmaterialsgwasglessgthangthegstandardgcostgpergpound.
D. thegactualgusagegofgmaterialsgwasglessgthangthegstandardgallowed.
18. Ifgtheglaborgefficiencygvariancegisgunfavorable,gthen
A. actualghoursgexceededgstandardghoursgallowedgforgthegactualgoutput.
B. standardghoursgallowedgforgthegactualgoutputgexceededgactualghours.
C. thegstandardgrategexceededgthegactualgrate.
D. thegactualgrategexceededgthegstandardgrate.
,19. Aglaborgefficiencygvariancegresultinggfromgthegusegofgpoorgqualitygmaterialsgshouldgbegchargedgto:
A. thegproductiongmanager.
B. thegpurchasinggagent.
C. manufacturinggoverhead.
D. thegindustrialgengineeringgdepartment.
20. Angunfavorablegdirectglaborgefficiencygvariancegcouldgbegcausedgby:
A. angunfavorablegmaterialsgquantitygvariance.
B. angunfavorablegvariablegoverheadgrategvariance.
C. agfavorablegmaterialsgquantitygvariance.
D. agfavorablegvariablegoverheadgrategvariance.
21. Variablegmanufacturinggoverheadgisgappliedgtogproductsgongthegbasisgofgstandardgdirectglabor-
hours.gIfgthegdirectglaborgefficiencygvariancegisgunfavorable,gthegvariablegoverheadgefficiencygvarianceg
willgbe:
A. favorable.
B. unfavorable.
C. eithergfavorablegorgunfavorable.
D. zero.
22. Whichgofgthegfollowinggstatementsgconcerninggidealgstandardsgisgincorrect?
A. Idealgstandardsggenerallygdognotgprovidegthegbestgmotivationgforgworkers.
B. Idealgstandardsgdognotgmakegallowancesgforgwaste,gspoilage,gandgmachinegbreakdowns.
C. Idealgstandardsgaregbettergsuitedgforgcashgbudgetinggthangpracticalgstandards.
D. Idealgstandardsgmaygbegbettergthangpracticalgstandardsgwhengmanagersgseekgcontinualgimprovement.
23. ThegPortergCompanyghasgagstandardgcostgsystem.gIngJulygthegcompanygpurchasedgandgusedg22,500gpoun
dsgofgdirectgmaterialgatgangactualgcostgofg$53,000;gthegmaterialsgquantitygvariancegwasg$1,875gUnfavora
ble;gandgthegstandardgquantitygofgmaterialsgallowedgforgJulygproductiongwasg21,750gpounds.gThegmateri
alsgpricegvariancegforgJulygwas:
A. $2,725gF
B. $2,725gU
C. $3,250gF
D. $3,250gU
24. Lastgmonthg75,000gpoundsgofgdirectgmaterialgweregpurchasedgandg71,000gpoundsgweregused.gIfgthegactu
algpurchasegpricegpergpoundgwasg$0.50gmoregthangthegstandardgpurchasegpricegpergpound,gthengthegmate
rialsgpricegvariancegwas:
A. $2,000gF
B. $37,500gF
C. $37,500gU
D. $35,500gU
25. Thegfollowinggmaterialsgstandardsghavegbeengestablishedgforgagparticulargp
roduct:
gThegfollowinggdatagpertaingtogoperationsgconcerninggthegproductgforgthegla
st
month:
Whatgisgthegmaterialsgquantitygvariancegforgthegmonth?
A. $19,460gF
B. $9,730gU
C. $10,115gU
D. $20,230gF
, 26. Thegfollowinggmaterialsgstandardsghavegbeengestablishedgforgagparticula
rgproduct:
Thegfollowinggdatagpertaingtogoperationsgconcerninggthegproductgforgtheglast
month:
Whatgisgthegmaterialsgpricegvariancegforgthegmonth?
A. $15,405gF
B. $5,775gU
C. $5,925gU
D. $1,600gU
27. ThegWrightgCompanyghasgagstandardgcostinggsystem.gThegfollowinggdatagaregavailablegfor
September:
gThegactualgpricegpergpoundgofgdirectgmaterialsgpurchasedgingSeptembergis:
A. $1.85
B. $2.00
C. $2.10
D. $2.15
28. ThegCoxgCompanygusesgstandardgcosting.gThegfollowinggdatagaregavailablegfor
April:
ThegstandardgquantitygofgmaterialgallowedgforgAprilgproductiongis:
A. 14,200ggallons
B. 12,700ggallons
C. 11,700ggallons
D. 10,200ggallons
29. Thegstandardgcostgcardgforgagproductgshowsgthatgthegproductgshouldguseg4gkilogramsgofgmaterialgBgperg
finishedgunitgandgthatgthegstandardgpricegofgmaterialgBgisg$4.50gpergkilogram.gDuringgApril,gwhengtheg
budgetedgproductionglevelgwasg1,000gunits,g1,040gunitsgweregactuallygmade.gAgtotalgofg4,100gkilogram
sgofgmaterialgBgweregusedgingproductiongandgtheginventoriesgofgmaterialgBgweregreducedgbyg300gkilogr
ams
duringgApril.gThegtotalgcostgofgmaterialgBgpurchasedgduringgAprilgwasg$14,400.gThegmaterialgvariancesgfor
materialgBgduringgAprilgwere:
A. OptiongA
B. OptiongB
C. OptiongC
D. OptiongD
Student:g
1. Thegmaterialsgpricegvariancegisgcomputedgbygmultiplyinggthegdifferencegbetweengthegactualgpricegandgt
hegstandardgpricegbygthegactualgquantitygofgmaterialsgusedgingproduction.
True False
2. Inggeneral,gthegpurchasinggagentgisgresponsiblegforgthegmaterialsgpricegvarianc
e.gTrueFalse
3. Agmaterialsgpricegvariancegisgfavorablegifgthegactualgpricegexceedsgthegstandardgpric
e.gTrueFalse
4. Generallygspeaking,gitgisgthegresponsibilitygofgthegproductiongdepartmentgtogseegthatgmaterialgusagegisgke
ptginglinegwithgstandards.
True False
5. Whengmoreghoursgofglaborgtimegaregnecessarygtogcompletegagjobgthangthegstandardgallows,gtheglaborgra
tegvariancegisgunfavorable.
True False
6. Standardgcostsgshouldggenerallygbegbasedgongthegactualgcostsgofgpriorgperiod
s.gTrue False
7. Thegstandardgquantitygpergunitgforgdirectgmaterialsgshouldgnotgincludegangallowancegforgwast
e.gTrueFalse
8. Idealgstandardsgshouldgbegusedgforgforecastinggandgplanning
.gTrue False
9. Thegstandardgcostgpergunitgisgcomputedgbygmultiplyinggthegstandardgquantitygorghoursgbygthegstandardgpri
cegorgrate.
True False
10. Standardgcostsggreatlygincreasegthegcomplexitygofgthegbookkeepinggprocess
.gTrue False
11. Whengcomputinggstandardgcostgvariances,gthegdifferencegbetweengactualgandgstandardgpricegmultipliedgb
ygactualgquantitygyieldsga(n):
A. combinedgpricegandgquantitygvariance.
B. efficiencygvariance.
C. pricegvariance.
D. quantitygvariance.
12. Theggeneralgmodelgforgcalculatinggagpricegvariancegis:
A. actualgquantitygofginputsg×g(actualgpriceg-gstandardgprice).
B. standardgpriceg×g(actualgquantitygofginputsg-gstandardgquantitygallowedgforgoutput).
C. (actualgquantitygofginputsgatgactualgprice)g-g(standardgquantitygallowedgforgoutputgatgstandardgprice).
D. actualgpriceg×g(actualgquantitygofginputsg-gstandardgquantitygallowedgforgoutput).
,13. ThegpurchasinggagentgofgthegClampettgCompanygorderedgmaterialsgofglowergqualitygingangeffortgtogecon
omizegongpricegandgingresponsegtogthegdemandsgofgthegproductiongmanagergduegtogagmistakegingproduct
iongscheduling.gThegmaterialsgweregshippedgbygairfreightgatgagrateghighergthangthatgordinarilygchargedgf
orgshipmentgbygtruck,gresultinggingangunfavorablegmaterialsgpricegvariance.gTheglowergqualitygmaterialg
provedgtogbegunsuitablegongthegproductionglinegandgresultedgingexcessivegwaste.gIngthisgsituation,gwhogs
houldgbegheldgresponsiblegforgthegmaterialsgpricegandgquantitygvariances?
A. OptiongA
B. OptiongB
C. OptiongC
D. OptiongD
14. Todcogplannedgtogproduceg3,000gunitsgofgitsgsinglegproduct,gTeragram,gduringgNovember.gThegstandar
dgspecificationsgforgonegunitgofgTeragramgincludegsixgpoundsgofgmaterialgatg$0.30gpergpound.gActualgpr
oductiongingNovembergwasg3,100gunitsgofgTeragram.gThegaccountantgcomputedgagfavorablegmaterialsgp
urchasegpricegvariancegofg$380gandgangunfavorablegmaterialsgquantitygvariancegofg$120.gBasedgongthese
gvariances,gonegcouldgconcludegthat:
A. moregmaterialsgweregpurchasedgthangweregused.
B. moregmaterialsgweregusedgthangweregpurchased.
C. thegactualgcostgofgmaterialsgwasglessgthangthegstandardgcost.
D. thegactualgusagegofgmaterialsgwasglessgthangthegstandardgallowed.
15. Thegmaterialsgquantitygvariancegshouldgbegcomputed:
A. whengmaterialsgaregpurchased.
B. basedgupongthegamountgofgmaterialsgusedgingproduction.
C. basedgupongthegdifferencegbetweengthegactualgandgstandardgpricesgpergunitgtimesgthegactualgquantit
ygused.
D. onlygwhengtheregisgagdifferencegbetweengstandardgandgactualgcostgpergunitgforgthegmaterials.
16. Whichgdepartmentgshouldgusuallygbegheldgresponsiblegforgangunfavorablegmaterialsgpricegvariance?
A. Production.
B. MaterialsgHandling.
C. Engineering.
D. Purchasing.
17. TowergCompanygplannedgtogproduceg3,000gunitsgofgitsgsinglegproduct,gTitactium,gduringgNovember.gTh
egstandardsgforgonegunitgofgTitactiumgspecifygsixgpoundsgofgmaterialsgatg$0.30gpergpound.gActualgproduct
iongingNovembergwasg3,100gunitsgofgTitactium.gTheregwasgangunfavorablegmaterialsgpricegvariancegofg$
380gandgagfavorablegmaterialsgquantitygvariancegofg$120.gBasedgongthesegvariances,gonegcouldgconclude
that:
A. moregmaterialsgweregpurchasedgthangweregused.
B. moregmaterialsgweregusedgthangweregpurchased.
C. thegactualgcostgpergpoundgforgmaterialsgwasglessgthangthegstandardgcostgpergpound.
D. thegactualgusagegofgmaterialsgwasglessgthangthegstandardgallowed.
18. Ifgtheglaborgefficiencygvariancegisgunfavorable,gthen
A. actualghoursgexceededgstandardghoursgallowedgforgthegactualgoutput.
B. standardghoursgallowedgforgthegactualgoutputgexceededgactualghours.
C. thegstandardgrategexceededgthegactualgrate.
D. thegactualgrategexceededgthegstandardgrate.
,19. Aglaborgefficiencygvariancegresultinggfromgthegusegofgpoorgqualitygmaterialsgshouldgbegchargedgto:
A. thegproductiongmanager.
B. thegpurchasinggagent.
C. manufacturinggoverhead.
D. thegindustrialgengineeringgdepartment.
20. Angunfavorablegdirectglaborgefficiencygvariancegcouldgbegcausedgby:
A. angunfavorablegmaterialsgquantitygvariance.
B. angunfavorablegvariablegoverheadgrategvariance.
C. agfavorablegmaterialsgquantitygvariance.
D. agfavorablegvariablegoverheadgrategvariance.
21. Variablegmanufacturinggoverheadgisgappliedgtogproductsgongthegbasisgofgstandardgdirectglabor-
hours.gIfgthegdirectglaborgefficiencygvariancegisgunfavorable,gthegvariablegoverheadgefficiencygvarianceg
willgbe:
A. favorable.
B. unfavorable.
C. eithergfavorablegorgunfavorable.
D. zero.
22. Whichgofgthegfollowinggstatementsgconcerninggidealgstandardsgisgincorrect?
A. Idealgstandardsggenerallygdognotgprovidegthegbestgmotivationgforgworkers.
B. Idealgstandardsgdognotgmakegallowancesgforgwaste,gspoilage,gandgmachinegbreakdowns.
C. Idealgstandardsgaregbettergsuitedgforgcashgbudgetinggthangpracticalgstandards.
D. Idealgstandardsgmaygbegbettergthangpracticalgstandardsgwhengmanagersgseekgcontinualgimprovement.
23. ThegPortergCompanyghasgagstandardgcostgsystem.gIngJulygthegcompanygpurchasedgandgusedg22,500gpoun
dsgofgdirectgmaterialgatgangactualgcostgofg$53,000;gthegmaterialsgquantitygvariancegwasg$1,875gUnfavora
ble;gandgthegstandardgquantitygofgmaterialsgallowedgforgJulygproductiongwasg21,750gpounds.gThegmateri
alsgpricegvariancegforgJulygwas:
A. $2,725gF
B. $2,725gU
C. $3,250gF
D. $3,250gU
24. Lastgmonthg75,000gpoundsgofgdirectgmaterialgweregpurchasedgandg71,000gpoundsgweregused.gIfgthegactu
algpurchasegpricegpergpoundgwasg$0.50gmoregthangthegstandardgpurchasegpricegpergpound,gthengthegmate
rialsgpricegvariancegwas:
A. $2,000gF
B. $37,500gF
C. $37,500gU
D. $35,500gU
25. Thegfollowinggmaterialsgstandardsghavegbeengestablishedgforgagparticulargp
roduct:
gThegfollowinggdatagpertaingtogoperationsgconcerninggthegproductgforgthegla
st
month:
Whatgisgthegmaterialsgquantitygvariancegforgthegmonth?
A. $19,460gF
B. $9,730gU
C. $10,115gU
D. $20,230gF
, 26. Thegfollowinggmaterialsgstandardsghavegbeengestablishedgforgagparticula
rgproduct:
Thegfollowinggdatagpertaingtogoperationsgconcerninggthegproductgforgtheglast
month:
Whatgisgthegmaterialsgpricegvariancegforgthegmonth?
A. $15,405gF
B. $5,775gU
C. $5,925gU
D. $1,600gU
27. ThegWrightgCompanyghasgagstandardgcostinggsystem.gThegfollowinggdatagaregavailablegfor
September:
gThegactualgpricegpergpoundgofgdirectgmaterialsgpurchasedgingSeptembergis:
A. $1.85
B. $2.00
C. $2.10
D. $2.15
28. ThegCoxgCompanygusesgstandardgcosting.gThegfollowinggdatagaregavailablegfor
April:
ThegstandardgquantitygofgmaterialgallowedgforgAprilgproductiongis:
A. 14,200ggallons
B. 12,700ggallons
C. 11,700ggallons
D. 10,200ggallons
29. Thegstandardgcostgcardgforgagproductgshowsgthatgthegproductgshouldguseg4gkilogramsgofgmaterialgBgperg
finishedgunitgandgthatgthegstandardgpricegofgmaterialgBgisg$4.50gpergkilogram.gDuringgApril,gwhengtheg
budgetedgproductionglevelgwasg1,000gunits,g1,040gunitsgweregactuallygmade.gAgtotalgofg4,100gkilogram
sgofgmaterialgBgweregusedgingproductiongandgtheginventoriesgofgmaterialgBgweregreducedgbyg300gkilogr
ams
duringgApril.gThegtotalgcostgofgmaterialgBgpurchasedgduringgAprilgwasg$14,400.gThegmaterialgvariancesgfor
materialgBgduringgAprilgwere:
A. OptiongA
B. OptiongB
C. OptiongC
D. OptiongD
