Question 1

Changes in technology,machinery,or production methods may make past cost data irrelevant for future operations.

Accepted Answer

A) True 
 B)False

Question 2

The following data relate to direct labor costs for the current period:

Accepted Answer

A)  $1,875.00 unfavorable
B)  $2,212.50 unfavorable
C)  $1,875.00 favorable
D)  $2,212.50 favorableE) B) and C)
F) A) and D)

Question 3

Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a:

Accepted Answer

A)  unfavorable quantity variance.
B)  unfavorable controllable variance.
C)  favorable volume variance.
D)  favorable labor rate variance.E) C) and D)
F) A) and C) B

Question 4

Refer to the information provided for Kohlman Company.The cash payments for manufacturing in the month of May are:

Accepted Answer

A)  $185,600.
B)  $156,800.
C)  $124,800.
D)  $146,400.E) B) and C)
F) All of the above

Question 5

Production estimates for August are as follows:

Accepted Answer

A)  195,000 lbs.of A; 39,000 lbs.of B.
B)  200,000 lbs.of A; 40,000 lbs.of B.
C)  205,000 lbs.of A; 41,000 lbs.of B.
D)  210,000 lbs.of A; 42,000 lbs.of B.E) A) and B)
F) A) and C)

Question 6

Refer to the information provided for Quaker Inc.What is the amount of the variable factory overhead controllable variance?

Accepted Answer

A)  $10,000 favorable
B)  $2,500 unfavorable
C)  $10,000 unfavorable
D)  $2,500 favorableE) A) and C)
F) A) and D)

Question 7

The difference between the standard cost of a product and its actual cost is called a variance.

Accepted Answer

A) True 
 B)False

Question 8

The first budget to be prepared is usually the production budget.

Accepted Answer

A) True 
 B)False

Question 9

A formal written statement of management's plans for the future,expressed in financial terms,is called a budget.

Accepted Answer

A) True 
 B)False

Question 10

Refer to the information provided for Cape Corporation.The amount of direct material A purchased during the year is:

Accepted Answer

A)  $216,000.
B)  $186,600.
C)  $192,000.
D)  $245,400.E) A) and C)
F) A) and D)

Question 11

A variant of fiscal-year budgeting whereby a twelve-month projection into the future is maintained at all times is termed:

Accepted Answer

A)  flexible budgeting.
B)  master budgeting.
C)  zero-based budgeting.
D)  continuous budgeting.E) A) and B)
F) None of the above D

Question 12

Refer to the information provided for Benjamin Corporation.The cash collections from accounts receivable in October are:

Accepted Answer

A)  $270,000.
B)  $272,500.
C)  $210,000.
D)  $218,000.E) A) and B)
F) None of the above

Question 13

Normally standard costs should be revised when labor rates change to incorporate new union contracts.

Accepted Answer

A) True 
 B)False

Question 14

If the actual direct labor hours spent producing a commodity differ from the standard hours,the variance is termed:

Accepted Answer

A)  time variance.
B)  price variance.
C)  quantity variance.
D)  rate variance.E) None of the above
F) A) and B)

Question 15

Currently attainable standards allow for unreasonable production difficulties.

Accepted Answer

A) True 
 B)False

Question 16

The formula to compute direct labor time variance is:

Accepted Answer

A)  actual costs - standard costs.
B)  actual costs + standard costs.
C)  (actual hours × standard rate) - standard costs.
D)  actual costs - (actual hours × standard rate) .E) All of the above
F) A) and B)

Question 17

The cost of available but unused productive capacity is indicated by the:

Accepted Answer

A)  fixed factory overhead volume variance.
B)  direct labor cost time variance.
C)  direct labor cost rate variance.
D)  variable factory overhead controllable variance.E) A) and B)
F) A) and C)

Question 18

Refer to the information provided for Efficient Corporation.The direct labor rate variance is:

Accepted Answer

A)  $135,000 unfavorable.
B)  $89,100 favorable.
C)  $89,100 unfavorable.
D)  $121,500 unfavorable.E) A) and B)
F) B) and C)

Question 19

Standard and actual costs for direct materials for the manufacture of 1,000 units of product were as follows:

Accepted Answer

The answer of Standard and actual costs for direct materials...

Question 20

A budget procedure that provides for the maintenance at all times of a twelve-month projection into the future is called continuous budgeting.

Accepted Answer

A) True 
 B)False  True

Exam 13: Budgeting and Standard Cost Systems

Changes in technology,machinery,or production methods may make past cost data irrelevant for future operations.

Correct AnswerverifiedShow Answer

The following data relate to direct labor costs for the current period:

Correct AnswerverifiedShow Answer

Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a:

Correct AnswerverifiedB

Refer to the information provided for Kohlman Company.The cash payments for manufacturing in the month of May are:

Correct AnswerverifiedShow Answer

Production estimates for August are as follows:

Correct AnswerverifiedShow Answer

Refer to the information provided for Quaker Inc.What is the amount of the variable factory overhead controllable variance?

Correct AnswerverifiedShow Answer

The difference between the standard cost of a product and its actual cost is called a variance.

Correct AnswerverifiedShow Answer

The first budget to be prepared is usually the production budget.

Correct AnswerverifiedShow Answer

A formal written statement of management's plans for the future,expressed in financial terms,is called a budget.

Correct AnswerverifiedShow Answer

Refer to the information provided for Cape Corporation.The amount of direct material A purchased during the year is:

Correct AnswerverifiedShow Answer

A variant of fiscal-year budgeting whereby a twelve-month projection into the future is maintained at all times is termed:

Correct AnswerverifiedD

Refer to the information provided for Benjamin Corporation.The cash collections from accounts receivable in October are:

Correct AnswerverifiedShow Answer

Normally standard costs should be revised when labor rates change to incorporate new union contracts.

Correct AnswerverifiedShow Answer

If the actual direct labor hours spent producing a commodity differ from the standard hours,the variance is termed:

Correct AnswerverifiedShow Answer

Currently attainable standards allow for unreasonable production difficulties.

Correct AnswerverifiedShow Answer

The formula to compute direct labor time variance is:

Correct AnswerverifiedShow Answer

The cost of available but unused productive capacity is indicated by the:

Correct AnswerverifiedShow Answer

Refer to the information provided for Efficient Corporation.The direct labor rate variance is:

Correct AnswerverifiedShow Answer

Standard and actual costs for direct materials for the manufacture of 1,000 units of product were as follows:

Correct AnswerverifiedShow Answer

A budget procedure that provides for the maintenance at all times of a twelve-month projection into the future is called continuous budgeting.

Correct AnswerverifiedTrue

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B

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D

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True