The materials price variance is computed by multiplying the difference between the actual price and the standard price by the actual quantity of materials used in production

The materials price variance is computed by multiplying the difference between the actual price and the standard price by the actual quantity of materials used in production. (Points : 3) True False 2. In general, the purchasing agent is responsible for the materials price variance. (Points : 3) True False 3. A materials price variance is favorable if the actual price exceeds the standard price. (Points : 3) True False 4. Generally speaking, it is the responsibility of the production department to see that material usage is kept in line with standards. (Points : 3) True False 5. When more hours of labor time are necessary to complete a job than the standard allows, the labor rate variance is unfavorable. (Points : 3) True False 6. Standard costs should generally be based on the actual costs of prior periods. (Points : 3) True False 7. The standard quantity per unit for direct materials should not include an allowance for waste. (Points : 3) True False 8. Ideal standards should be used for forecasting and planning. (Points : 3) True False 9. The standard cost per unit is computer by multiplying that standard quantity or hours by the standard price or rate. (Points : 3) True False 10. Standard costs greatly increase the complexity of the bookkeeping process. (Points : 3) True False 11. When computing standard cost variances, the difference between actual and standard price multiplied by actual quantity yields a(n): (Points : 3) combined price and quantity variance. efficiency variance. price variance. quantity variance.12. The general model for calculating a price variance is: (Points : 3) actual quantity of inputs x (actual price - standard price) standard price x (actual quantity of inputs - standard quantity allowed for output) (actual quantity of inputs at actual price) - (standard quantity allowed for output at standard price) actual price x (actual quantity of inputs - standard quantity allowed for output)13. The purchasing agent of the Clampett Company ordered materials for lower quality in an effort to economize on price and in response to the demands of the production manager due to a mistake in production scheduling. The materials were shipped by airfreight at a rate higher than that ordinarily charged for shipment by truck, resulting in an unfavorable materials price variance. The lower quality material proved to be unsuitable on the production line and resulted in excessive waste. In this situation, who should be held responsible for the materials price and quantity variances?Materials Price Variance Materials Quantity VarianceA) Purchasing Agent Purchasing AgentB) Production Manager Production ManagerC) Production Manager Purchasing AgentD) Purchasing Agent Production Manager (Points : 3) Option A Option B Option C Option D14. Todco planned to produce 3,000 units of its single product, Teragram, during November. The standard specifications for one unit of Teragram include six pounds of material at $0.30 per pound. Actual production in November was 3,100 units of Teragram. The accountant computed a favorable materials purchase price variance of $380 and an unfavorable materials quantity variance of $120. Based on these variances, one could conclude that: (Points : 1) more materials were purchased then were used. more materials were used than were purchased. the actual cost of materials was less than the standard cost. the actual usage of materials was less than the standard allowed.15. The materials quantity variance should be computed: (Points : 3) when materials are purchased. based upon the amount of materials used in production. based upon the difference between the actual and standard prices per unit times the actual quantity used. only when there is a difference between standard and actual cost per unit for the materials.16. Which department should usually be held responsible for an unfavorable materials price variance? (Points : 3) Production Materials Handling Engineering Purchasing17. If the labor efficiency variance is unfavorable, then (Points : 3) actual hours exceeded standard hours allowed for the actual output. standard hours allowed for the actual output exceeded actual hours. the standard rate exceeded the actual rate. the actual rate exceeded the standard rate.18. A labor efficiency variance resulting from the use of poor quality materials should be charged to: (Points : 3) the production manager. the purchasing agent. manufacturing overhead. the industrial engineering department.19. Variable manufacturing overhead is applied to products on the basis of standard direct labor-hours. If the direct labor efficiency variance is unfavorable, the variable overhead efficiency variance will be: (Points : 3) favorable. unfavorable. either favorable or unfavorable. zero.20. The following labor standard have been established for a particular product: Standard labor-hours per unit of output 4.0 hours Standard labor rate $12.30 per hourThe following data pertain to operations concerning the product for the last month: Actual hours worked 7,100 hours Actual total labor cost $89,105 Actual output 1,500 unitsWhat is the labor efficiency variance for the month? (Points : 3) $13,805 U $13,530 U $15,305 U $15,305 F21. The following standards for variable manufacturing overhead have been established for company that makes only one product: Standard hours per unit of output 2.1 hours Standard variable overhead rate $13.05 per hourThe following data pertain to operations for the last month: Actual hours 2,400 hours Actual total variable manufacturing overhead cost $30,360 Actual output 600 unitsWhat is the variable overhead efficiency variance for the month? (Points : 3) $9,219 U $10,179 U $9,867 U $647 U22. The following standards for variable manufacturing overhead have been established for a company that makes only one product: Standard hours per unit of output 5.0 hours Standard variance overhead rate $13.45 per hourThe following data pertain to operations for the last month: Actual hours 3,300 hours Actual total variable manufacturing overhead cost $45,375 Actual output 800 unitsWhat is the variable overhead rate variance for the month? (Points : 3) $1,200 F $9,625 F $8,425 F $990 U23. Lafountaine Manufacturing Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company's cost formula for variable manufacturing overhead is $4.70 per MH. During the month, the actual total variable manufacturing overhead was $20,210 and the actual level of activity for the period was 4,700 MHs. What was the variable overhead rate variance for the month? (Points : 3) $400 unfavorable $1,880 favorable $1,880 unfavorable $400 favorable24. Tavorn Corporation applies manufacturing over head to products on the basis of standard machine-hours. The company's standard variable manufacturing overhead rate is $1.80 per machine-hour. The actual variable manufacturing overhead cost for the month was $13,080. The original budget for the month was based on 7,100 machine-hours. The company actually worked 7,210 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 7,070 machine-hours. What was the variable overhead efficiency variance for the month? (Points : 3) $354 unfavorable $252 unfavorable $54 favorable $102 unfavorable25. Acri Corporation procduces large commercial doors for warehouses and other facilities. In the most recent month, the company budgeted production of 6,900 doors. Actual production was 7,300 doors. According to standards, each door requires 5.6 machine-hours. The actual machine-hours for the month were 40,360 machine-hours. The standard supplies cost, and element of variable manufacturing overhead, is $4.20 per machine-hour. The actual supplies cost for the month was $168,251. The variable overhead efficiency variance for supplies cost is: (Points : 3) $3,445 U $2,184 F $2,184 U $3,445 F


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