AC 212 Quiz: Managerial Accounting Chapter 11 Study guide

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erincamel819

1 Dec 2016

School

Quinnipiac University

Department

Accounting

Course

AC 212

Professor

Katherine Simione

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Document Summary

Variable overhead variance: a budget for a single unit of product, the standard cost becomes the benchmark for evaluating actual costs. Think of a standard cost as budget for a single unit of product. Standards based on perfect or ideal conditions. Types of standards which are also known as perfection standards. Do not allow for any poor quality raw materials waster in the production process machine breakdowns or other inefficiencies: practical (or attainable) standards. Practical standards include allowances for normal amounts of waste and inefficiency. Many managers believe that practical standards make the best cost: develop standards benchmarks. Future charges: standard costs per unit prepared for. Manufacturing overhead required for each unit of product: standard cost calculation. Standard quantity of dm x standard price of dm: = standard cost of dm. Standard hours of dl x standard rate of dl: = standard cost of dl.

Related Questions

1)Which of the following represents the correct order for preparing the indicated budget documents for a manufacturing company?

A. Sales budget, cash budget, direct materials budget, direct labor budget

B. Sales budget, cash budget, production budget, direct materials budget

C. Production budget, sales budget, direct materials budget, direct labor budget

D. Production budget, direct labor budget, direct materials budget, cash budget

2). Ideal standards

A. generally provide the best motivation for workers.

B. make allowances for waste, spoilage and machine breakdowns.

C. are better suited for cash budgeting than practical standards.

D. aid the planning of managers seeking continual improvement.

3). ABC Company planned to produce 3,000 cell phone covers during November. The standards for one cell phone cover specify 6 ounces of resin at $0.30 per ounce. Actual production in November was 3,100 cell phone covers. There was an unfavorable materials price variance of $380 and a favorable materials quantity variance of $120. Based on these variances one could conclude

A. more materials were purchased than were used.

B. more materials were used than were purchased.

C. the actual cost per pound for materials was less than the standard cost per pound

D. the actual usage of materials was less than the standard allowed.

4). The following variable overhead standards have been established for a particular product:

Standard variable overhead rate $1.70 per direct labor hour

Standard labor-hours per unit of output .80 hours per unit

Budgeted production 9,800 units

The following data pertain to operations concerning the product for the last month:

Actual hours worked 7,980

Actual total variable overhead cost $14,364

Actual output 9,900 units

What is the variable overhead rate variance?

A. 798 U

B. 792 U

C. 102U

D. 238 U

1. What is standard cost?
A. The total number of units times the budgeted amount expected
B. Any amount that appears on a budget
C. The total amount that appears on the budget for product costs
D. The amount management thinks should be incurred to produce a good or service

2. A standard cost is
A. the average cost in an industry.
B. a predetermined cost.
C. the historical cost of producing a product last year
D. a cost which is paid for a group of similar products.

3. The difference between a budget and a standard is that
A. a budget expresses what costs were, while a standard expresses what costs should be.
B. a budget expresses a total amount, while a standard expresses a unit amount.
C. a budget expresses management's plans, while a standard reflects what actually happened.
D. standards are excluded from the cost accounting system, whereas budgets are generally incorporated into the cost accounting system.

4. Standard costs may be used by
A. universities.
B. governmental agencies.
C. charitable organizations.
D. all of these answers are correct

5. The final decision as to what standard costs should be is the responsibility of
A. management.
B. the quality control engineer.
C. the purchasing agent.
D. the managerial accountants.

6. The most rigorous of all standards is the
A. normal standard.
B. realistic standard.
C. conceivable standard.
D. ideal standard.

7. An unfavorable materials quantity variance would occur if
A. more materials were purchased than were used.
B. actual pounds of materials used were greater than the standard pounds allowed
C. actual pounds of materials used were less than the standard pounds allowed
D. actual labor hours used were greater than the standard labor hours allowed

8. Which of the following statements is true?
A. Variances are the differences between total actual costs and total standard costs.
B. When actual costs exceed standard costs, the variance is favorable.
C. An unfavorable variance results when actual costs are decreasing but standards are not changed.
D. all of the above are true

10. Labor efficiency is measured by the
A. materials quantity variance.
B. labor quantity variance.
C. labor rate variance.
D. total labor variance.

tanpanda195

Puvo, Inc., manufactures a single product in which variable manufacturing overhead is assigned on the basis of standard direct labor-hours. The company uses a standard cost system and has established the following standards for one unit of product:

	Standard Quantity			Standard Price or Rate			Standard Cost
Direct materials		1.5	pounds	$	7.50	per pound	$	11.25
Direct labor		0.6	hours	$	24.00	per hour	$	14.40
Variable manufacturing overhead		0.6	hours	$	5.75	per hour	$	3.45

During March, the following activity was recorded by the company:

The company produced 6,600 units during the month.

A total of 13,400 pounds of material were purchased at a cost of $37,520.

There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,680 pounds of material remained in the warehouse.

During March, 4,160 direct labor-hours were worked at a rate of $24.50 per hour.

Variable manufacturing overhead costs during March totaled $14,552.

The direct materials purchases variance is computed when the materials are purchased.

The materials quantity variance for March is:

Multiple Choice

$6,150 F

$20,620 F

$20,620 U

$6,150 U

chocolateswan273

AC 212 Quiz: Managerial Accounting Chapter 11 Study guide

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