l>ACCT-202 Principles of Managerial Accounting - Practice Exam - Chapter 10
 ACCT 202 Principles of Managerial AccountingPractice Exam - Chapter 10Standard Costs and the Balanced ScorecardDr. Fred Barbee
Select your answer by clicking on the button next to each alternative. You willreceive immediate feedback. 1. An unfavorable material quantity variance indicates that: a.Actual usage of material exceeds the standard material allowed for output.b.Standard material allowed for output exceeds the actual usage of material.c.Actual material price exceeds standard price.d.Standard material price exceeds actual price. 2. Standard cost systems differ from actual cost systems in the assignment of a.Prime costs onlyb.Overhead costs onlyc.Both prime costs and overhead costsd.Neither prime costs nor overhead costs. 3. The materials price variance is calculated as a.(actual price - standard price) x actual quantity or AQ(AP-SP)b.(actual price - standard price) x standard quantityc.(actual quantity - standard quantity) x actual priced.(actual quantity - standard quantity) x standard price. 4. The labor efficiency variance is calculated as a.(actual DLHs used - std DLHs that should have been used) x actual DLHs used.b.(actual hourly wage rate - std hourly wage rate) x std DLHs that should have been used.c.(actual DLHs used - std DLHs that should have been used) x actual hourly wage rate.d.(actual DLHs used - std DLHs that should have been used) x std hourly wage rate 5. The materials price variance should be computed: a.When materials are purchased.b.When materials are used in production.c.Based upon the amount of materials used in production when only a portion of materials purchased is actually used.d.Based upon the difference between the actual quantity of inputs and the standard quantity allowed for output times the standard price. 6. During May, 6,000 pounds of raw materials were purchased at a cost of \$2.60 per pound. If there was a favorable materials price variance of \$900 for December, the standard cost per pound must be a.\$2.75b.\$2.60c.\$2.45d.None of the above 7. During October, 16,000 direct labor hours were worked at a standard cost of \$6 per hour. If the labor rate variance for October was \$4,000 unfavorable, the actual cost per labor hour must be: a.\$6.25b.\$6.00c.\$5.75d.None of the above 8. The general model for calculating a price variance is: a.Actual quantity of inputs x (actual price - standard price).b.Standard price x (actual quantity of inputs - standard quantity allowed for output).c.(actual quantity of inputs at actual price) - (standard quantity allowed for output at standard price).d.Actual price x (actual quantity of inputs - standard quantity allowed for output). 9. Home Company manufactures tables with vinyl tops. The standard material cost for the vinyl used per Type-R table is \$7.80 based on six square feet of vinyl at a cost of \$1.30 per square foot. A production run of 1,000 tables in January resulted in usage of \$6,400 square feet of vinyl at a cost of \$1.20 per square foot, a total cost of \$7,680. The quantity variance resulting from the above production run was: a.\$120 favorableb.\$480 unfavorablec.\$520 unfavorabled.\$640 favorable 10. Variances indicate a.The cause of the variance.b.Who is responsible for the variance.c.That actual performance is not going according to the plan.d.When the variance should be investigated.Part II: Problems (To see the answer, click on the solution button.)Problem 1 Lisle Manufacturing has developed the following standards for one of its products: Standard Variable Cost Card One Unit of Product Direct Materials: 10 yards x \$10 per yard \$100.00 Direct Labor: 4 hours x \$16 per hour 64.00 Variable Overhead: 4 hours x \$10 per hour 40.00 Total standard variable cost per unit \$204.00 The company records materials price variances at the time of purchase. During August, Lisle purchased 16,000 yards of material costing \$169,600 and used 12,500 yards in its manufacturing process. There was no materials inventory at august 1. Lisle recorded a total of 4,600 direct labor hours worked for total payroll of \$72,680. Lisle manufactured 1,200 units in August RequiredCalculate the materials price and usage variances and indicate whether each is favorable or unfavorable.Calculate the labor rate and efficiency variances and indicate whether they are favorable or unfavorable.Problem 2 The following standard costs were developed for one of the products of Ferrars Company: Standard Cost Card Per Unit Direct Materials: 4 pounds x \$5 per pound \$20 Direct Labor: 1.5 hours x \$20 per hour 30 Variable overhead: \$10 per hour 15 fixed overhead: \$30 per hour 45 Total standard cost per unit \$110 Budgeted fixed overhead for the period was \$600,000 and expectged capacity for the period was 20,000 DLHs. During the period just ended, Ferrars produced 15,000 units using 80,000 pounds of material and 23,000 direct labor hours. Total payroll cost was \$288,000. The materials cost \$3.70 per pound. Actual variable overhead cost was \$220,000 and actual fixed overhead cost was \$640,000. Required: 1.

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Calculate the variable overhead spending and efficiency variances and indicate whether they are favorable or unfavorable.   