question

Standard Cost

answer

budget cost per unit of product - standard unit amount

question

Advantages of Standard Cost

answer

a. facilitate management planning b. promote greater economy c. useful in setting sales price d. contribute to management control e. permit "management by exception" f. Simplify costing of inventories and reduce clerical cost

question

Direct Materials Price Standard

answer

1. set by delivered cost of raw materials + allowance for handling and receiving

question

Direct Material Quantity Standard

answer

1. set by required quantity + allowance for waste and spoilage

question

Direct Labor Price Standard

answer

1. set by current wages and adjustments (COLA, payroll taxes, fringe benefits)

question

Direct Labor Quantity Standard

answer

1. set by required production time + an allowance for rest periods, clean up, set up and downtime

question

Manufacturing Overhead

answer

1. Standard predetermined overhead rate 2. And standard expected activity level index

question

Direct material Variance Total

answer

(AP x AQ) - (SP x SQ)

question

Direct materials price Variance

answer

(AP x AQ) - (AQ x SP)

question

Direct Materials Quantity Variance

answer

(AQ x SP) - (SQ x SP)

question

Direct Labor Variance Total

answer

(AH x AR) - (SH x SR)

question

Direct Labor Price Variance

answer

(AH x AR) - (AH x SR)

question

Direct Labor Quantity Variance

answer

(AH x SR) - (SH x SR)

question

Total Manufacturing Overhead Variance

answer

(Actual Overhead) - (Overhead applied at standard hours allowed)

question

Variance Report

answer

-management by exception -income statement -standard costing system sales -standard COGS +/- Variances = Actual Gross Profit

question

Balanced Score Card

answer

financial and non financial measures that links performance to company's goals.

question

Balanced Score Card 4 objectives

answer

1. Financial 2. Customer 3. Internal Process 4. Learn and Grow

question

Balanced score Card Objectives

answer

1. employees both financial and non financial 2. creates links between top to bottom tiers 3. provides measurable objectives for non financial measures 4. Single performance system - all is weighted equally

question

An approach that incorporates financial and non financial measures in an integrated system that links performance measurement and a company's strategic goals

answer

Balanced score card

question

A viewpoint employed in balanced score card to evaluate the company from the perspective of the people who buys and use it's product

answer

Customer perspective

question

The rate per hour that should be incurred for Direct Labor

answer

Standard Direct Labor Price

question

The time that should be required to make one unit of product

answer

Direct Labor Standard quantity

question

The cost per unit of direct materials that should be incurred

answer

Direct Materials Price Standard

question

The quantity of direct materials that should be used per unit of finished goods

answer

Direct materials Quantity Standard

question

A viewpoint employed in the balanced scorecard to evaluate a company's performance using financial measures

answer

Financial perspective

question

standards based on optimum level of performance under perfect conditions

answer

Ideal standards

question

A viewpoint employed in the balanced scorecard to evaluate the effectiveness and efficiency of a company's value chain, including product development, production, delivery and after sale service

answer

Internal Process Perspective

question

A viewpoint employed by the balanced scorecard to evaluate how well a company develops and retains its employees.

answer

Learn and growth perspective

question

The average activity output that a company should experience over the long run

answer

Normal Capacity

question

Standards based on efficient level of performance that are attainable under expected operating conditions

answer

Normal Standards

question

The difference between actual overhead incurred and overhead budgeted for the standard hours allowed

answer

Overhead controllable variance

question

The difference between normal capacity hours and standard hours allowed times the fixed overhead rate

answer

Overhead Volume variance

question

A double entry system of accounting in which standard cost are used in making entires, and variances are recognized in the accounts

answer

Standard Cost Accounting systems

question

Predetermined unit cost which companies use as measurements of performance

answer

Standard Cost

question

The hours that should have been worked for the units produced

answer

Standard hours allowed

question

An overhead rate determined by dividing budgeted overhead cost by an expected standard activity index

answer

Standard predetermined overhead rate

question

The difference between total actual cost and total standard cost

answer

Variance

question

Has management accomplished its price and quantity objectives regarding materials?

answer

1. actual cost and standard cost of materials (materials price and quantity variance) Positive - favorable difference - price and quantity have been met

question

Standards differs from budgets in that... a. budgets but not standards may be used in valuing inventories b. budgets not standards may be journalized and posted c. budgets are a total amount and standards are a unit amount d. only budgets contribute to management planning and control

answer

c. budgets are a total amount and standards are a unit amount

question

Has management accomplished its price and quantity for labor objectives?

answer

1. actual cost and standard cost of labor (Labor price and quantity variances) Positive - favorable - price and quantity objectives met

question

Has management accomplished its objectives regarding manufacturing overhead?

answer

1. actual cost and standard cost of MOH (Total manufacturing overhead variance) Positive - favorable- manufacturing overhead objectives have been met

question

Standard cost are: a. imposed by government agencies b. are predetermined unit costs which companies use as measures of performance c. can be used by manufacturing companies by not by service or profit companies d. All of the above

answer

b. are predetermined unit costs which companies use as measures of performance

question

The advantages of standard cost include all of the following except: a. management by exception may be used b. management planning is facilitated c. they may simplify the costing of inventories d. management must use a static budget

answer

d. management must use a static budget

question

Normal standards: a. allow for rest periods, machine breakdowns, and set up time b. represents level of performance under perfect conditions c. are rarely used because managers believe they lower workforce moral d. are more likely than ideal standards to result in unethical practices.

answer

a. allow for rest periods, machine breakdowns, and set up time

question

The setting of standards is: a. a managerial accounting decision b. a management decision c. a work decision d. preferably set at the ideal level of performance

answer

b. a management decision

question

Each formula is correct expect: a. LPV = (AH x AR) - (AH x SR) b. TOHV = (actual overhead) - (applied overhead) c. MPV = (AQ x AP) - (SQ x SP) d. LQV = (AH x SR) - (SH x SR)

answer

c. MPV = (AQ x AP) - (SQ x SP)

question

In producing product A, 6,300 lb. of direct materials were used at cost of $1.10 per lb. The standard was 6,000 lb. at $1.00 per lb.. The direct materials quantity variance = a. $ 330 U b. $300 U c. $600 U d. $630 U

answer

b. $300 U (6,300 x 1.00) - (6,000 x 1.00) (AQ x SP) - (SP x SQ)

question

In producing product z, 14,800 DL hours were used at rate of $8.20 per hour. The standard was 15,000 DL hours at $8.00 per hour. The direct labor: a. Quantity variance is $1,600 F b. Quantity variance is $1,600 U c. Price Variance is $3,000 F d. Price Variance is $3,000 U

answer

a. Quantity variance is $1,600 F (AH x SR) - (SH x SR) (14,800 x 8) - (15,000 x 8)

question

Which of following is correct about total overhead variance? a. Budgeted overhead and applied overhead are the same b. total actual overhead is composed of variable overhead, fixed costs, and period costs c. Standard hours actually worked are used in computing the variance d. Standard hours allowed for the work done is the measure used in computing the variance

answer

d. Standard hours allowed for the work done is the measure used in computing the variance

question

The formula for computing the total overhead variance is: a. actual overhead - overhead applied b. overhead budgeted - overhead applied c. actual overhead - overhead budget d. none

answer

a. actual overhead - overhead applied

question

Which is incorrect about variance reports? a. They facilitate "management by exception" b. they should only be sent to top levels of management c. they should be prepared as soon as possible d. they may vary in form, content and frequency among companies.

answer

b. they should only be sent to top levels of management

question

In using variance reports to evaluate cost control, management normally looks into: a. all variances b. favorable variances only c. unfavorable variances only d. both favorable and unfavorable variances that exceed a certain predetermined quantitative measure such as percentage or dollar amount.

answer

d. both favorable and unfavorable variances that exceed a certain predetermined quantitative measure such as percentage or dollar amount.

question

Generally accepted accounting principals allow a company to: a. report inventory at standard cost but cost of goods sold must be reported at actual cost b. report cost of goods sold at standard cost, but inventory must be reported at actual cost c. report inventory and cost of goods sold at standard costs as long as there are no significant differences between actual and standard costs d. report inventory and cost of goods sold at actual cost. standard is never allowed.

answer

c. report inventory and cost of goods sold at standard costs as long as there are no significant differences between actual and standard costs

question

Which of the following would not be an objective used in the customer perspective of the balanced scorecard approach? a. percentage of customers who would recommend product to a friend b. customer retention c. Brand recognition d. Earnings per share

answer

d. Earnings per share

question

Which of the following would not be an objective used in the customer perspective of the balanced scorecard approach? a. percentage of customers who would recommend product to a friend b. customer retention c. Brand recognition d. Earnings per share

answer

d. Earnings per share

question

Which of the following would not be an objective used in the customer perspective of the balanced scorecard approach? a. percentage of customers who would recommend product to a friend b. customer retention c. Brand recognition d. Earnings per share

answer

d. Earnings per share

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