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Question
Standard costs are:
A. Actual costs incurred to produce a specific product or perform a service.
B. Preset costs for delivering a product or service under normal conditions.
C. Established by the IMA.
D. Rarely achieved.
E. Uniform among companies within an industry.
Answer
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Related questions
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What are the four steps in the effective management of variance analysis?
Q:
Cabot Company collected the following data regarding production of one of its products. Compute the direct materials cost variance. Direct materials standard (6 lbs. @ $2/lb.)
$12 per finished unit Actual direct materials used
243,000 lbs. Actual finished units produced
40,000 units Actual cost of direct materials used
$483,570 A. $6,000 favorable.
B. $3,570 unfavorable.
C. $2,430 favorable.
D. $6,000 unfavorable.
E. $3,570 favorable.
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Brewer Company specializes in selling used cars. During the month, the dealership sold 22 cars at an average price of $15,000 each. The budget for the month was to sell 20 cars at an average price of $16,000. Compute the dealerships sales price variance for the month.
A. $22,000 unfavorable.
B. $10,000 favorable.
C. $22,000 favorable.
D. $32,000 unfavorable.
E. $32,000 favorable.
Q:
When recording the journal entry for labor, the Goods in Process Inventory account is
A. Debited for standard labor cost.
B. Debited for actual labor cost.
C. Credited for standard labor cost.
D. Credited for actual labor cost.
E. Not used.
Q:
Adams, Inc. uses the following standard to produce a single unit of its product: overhead (2 hrs. @ $3/hr.) $ 6. The flexible budget for overhead is $100,000 plus $1 per direct labor hour. Actual data for the month show overhead costs of $150,000, and 24,000 units produced. The overhead volume variance is:
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Q:
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$28,175 Standard factory overhead: Variable overhead ...
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$2 per unit Actual units produced ..
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C. $2,400U.
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E. $3,695U.
Q:
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45,000 Actual rate per hour ..
$15 Standard rate per hour ..
$14 Standard hours for units produced ...
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B. $28,000 unfavorable.
C. $45,000 unfavorable.
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Q:
The following information describes a company's usage of direct labor in a recent period. The direct labor efficiency variance is: Actual hours used .
45,000 Actual rate per hour ..
$15 Standard rate per hour ..
$14 Standard hours for units produced ...................
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B. $28,000 favorable.
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Q:
A company has established 5 pounds of Material M at $2 per pound as the standard for the material in its Product A. The company has just produced 1,000 units of this product, using 5,200 pounds of Material M that cost $9,880. The direct materials quantity variance is:
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Q:
Bradford Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. What is the direct materials quantity variance?
A. $ 400 unfavorable.
B. $ 450 unfavorable.
C. $2,500 unfavorable.
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E. $2,950 unfavorable.
Q:
A company is trying to decide which of two new product lines to introduce in the coming year. The predicted revenue and cost data for each product line follows: Product A
Product B Sales............................................................
$80,000
$96,000 Direct materials............................................................
3,000
6,000 Direct labor............................................................
30,000
45,000 Other cash operating expenses............................................................
7,500
9,000 New equipment costs............................................................
75,000
100,000 Estimated useful life (no salvage)............................................................
5 years
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Q:
Jorgensen Department Store has three departments: Clothing, Toys, and Jewelry. The most recent income statement, showing the total operating profit and departmental results is shown below: Total
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Toys
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$1,000,000
$600,000
$500,000 Cost of goods sold.........................................
(1,260,000)
(500,000)
(400,000)
(360,000) Gross profit.........................................
840,000
500,000
200,000
140,000 Direct expenses.........................................
(420,000)
(200,000)
(100,000)
(120,000) Allocated expenses.........................................
(350,000)
(100,000)
(75,000)
(175,000) Net income (loss).........................................
$ 70,000
$ 200,000
$ 25,000
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Q:
Identify at least three reasons for managers to favor the internal rate of return (IRR) over other capital budgeting approaches.
Q:
At the end of the accounting period, immaterial variances are closed to _____________.
Q:
If actual price per unit of materials is greater than the standard price per unit of materials, the direct materials price variance is _______________________.
Q:
A favorable variance for a cost means that when compared to the budget, the actual cost is ____________________ than the budgeted cost.
Q:
A standard that takes into account the reality that some loss usually occurs with any process under normal application of the process is known as a _______________ standard.
Q:
Companies promoting continuous improvement strive to achieve _____________ standards by eliminating inefficiencies and waste.
Q:
Chips Co. assigned direct labor cost to its products in May for 1,300 standard hours of direct labor at the standard $8 per hour rate. The direct labor rate variance for the month was $200 favorable and the direct labor efficiency variance was $150 favorable. Prepare the journal entry to charge Goods in Process Inventory for the standard labor cost of the goods manufactured in May and to record the direct labor variances. Assuming that the direct labor variances are immaterial, prepare the journal entry that Chips would make to close the variance accounts.
Q:
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Q:
The following information describes production activities of the Central Corp.: Raw materials used
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5,545 hours for a total of $72,085 30,000 units were completed during the year
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1/2 lb. of raw material at $4.15 per lb.
10 minutes of direct labor at $12.50 per hour Compute the direct materials price and quantity and the direct labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable.
Q:
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Q:
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