ACC 560 Week 8 Quiz – Strayer NEW
Click On The
Link Below to Purchase A+ Graded Material
Instant Download
Week 8 Quiz 7:
Chapter 11
TRUE-FALSE STATEMENTS
1. Inventories cannot be valued at standard cost in financial
statements.
Ans: LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting
2. Standard cost is the industry average cost for a particular
item.
Ans: LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
3. A standard is a unit amount, whereas a budget is a total amount.
Ans: LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
4. Standard costs may be incorporated into the accounts in the
general ledger.
Ans: LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
5. An advantage of standard costs is that they simplify costing of
inventories and reduce clerical costs.
Ans: LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
6. Setting standard costs is relatively simple because it is done
entirely by accountants.
Ans: LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Decision Modeling, AICPA PC: None, IMA:
Cost Management
7. Normal standards should be rigorous but attainable.
Ans: LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
8. Actual costs that vary from standard costs always indicate
inefficiencies.
Ans: LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
9. Ideal standards will generally result in favorable variances for
the company.
Ans: LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
10. Normal standards incorporate normal contingencies of production
into the standards.
Ans: LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
11. Once set, normal standards should not be changed during the
year.
Ans: LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
12. In developing a standard cost for direct materials, a price
factor and a quantity factor must be considered.
Ans: LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
13. A direct labor price standard is frequently called the direct
labor efficiency standard.
Ans: LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
14. The standard predetermined overhead rate must be based on direct
labor hours as the standard activity index.
Ans: LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
15. Standard cost cards are the subsidiary ledger for the Work in
Process account in a standard cost system.
Ans: LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management
16. A variance is the difference between actual costs and standard
costs.
Ans: LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
17. If actual costs are less than standard costs, the variance is
favorable.
Ans: LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
18. A materials quantity variance is calculated as the difference
between the standard direct materials price and the actual direct materials
price multiplied by the actual quantity of direct materials used.
Ans: LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
19. An unfavorable labor quantity variance indicates that the actual
number of direct labor hours worked was greater than the number of direct labor
hours that should have been worked for the output attained.
Ans: LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
20. Standard cost + price variance + quantity variance = Budgeted
cost.
Ans: LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
21. The overhead controllable variance relates primarily to fixed overhead
costs.
Ans: LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
22. The overhead volume variance relates only to fixed overhead
costs.
Ans: LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
23. If production exceeds normal capacity, the overhead volume
variance will be favorable.
Ans: LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
24. There could be instances where the production department is
responsible for a direct materials price variance.
Ans: LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
25. The starting point for determining the causes of an unfavorable
materials price variance is the purchasing department.
Ans: LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
26. The total overhead variance is the difference between actual
overhead costs and overhead costs applied to work done.
Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
27. Variance analysis facilitates the principle of "management
by exception."
Ans: LO: 6, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
28. A credit to a Materials Quantity Variance account indicates that
the actual quantity of direct materials used was greater than the standard
quantity of direct materials allowed.
Ans: LO: 9, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
29. A standard cost system may be used with a job order cost system
but not with a process cost system.
Ans: LO: 9, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
30. A debit to the Overhead Volume Variance account indicates that
the standard hours allowed for the output produced was greater than the
standard hours at normal capacity.
Ans: LO: 9, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
31. In
concept, standards and budgets are essentially the same.
Ans: LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
32. Standards
may be useful in setting selling prices for finished goods.
Ans: LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
33. The
materials price standard is based on the purchasing department's best estimate
of the cost of raw materials.
Ans: LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
34. The
materials price variance is normally caused by the production department.
Ans: LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
35. The
use of an inexperienced worker instead of an experienced employee can result in
a favorable labor price variance but probably an unfavorable quantity variance.
Ans: LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB:
Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost
Management
36. In
using variance reports, top management normally looks carefully at every
variance.
Comments
Post a Comment