Question :
53. Which of the following not an advantage of using a : 1229638
53. Which of the following is not an advantage of using a standard cost system?
A. It eliminates the need for analysis of variances.
B. It facilitates establishing an effective system of responsibility accounting.
C. It requires an analysis of all aspects of operations.
D. It helps management control costs.
54. An important advantage of a standard cost system is that standard costs:
A. Cause financial statements to be more comparable because different companies cost their inventories in the same manner.
B. Can be determined with great precision so that inventories are valued with complete accuracy.
C. Cause a lower net income, resulting in lower income taxes.
D. Focus attention on trouble spots and facilitate prompt corrective action.
55. Standard costs:
A. May be used in job order cost systems but not in process cost accounting systems.
B. Should be revised upward when actual costs are higher than expected because of waste and inefficiency.
C. Are the same for all companies in a given industry.
D. Are the costs that should be incurred to produce a product under normal conditions.
56. Factory overhead variances are usually recorded when:
A. Overhead is applied to work-in-process.
B. Goods are finished and transferred to finished goods inventory.
C. Goods are sold.
D. Actual factory overhead costs are incurred.
57. A large favorable variance from standard costs at the end of the year should be:
A. Carried forward to the next fiscal year.
B. Shown as other income in the income statement.
C. Added to cost of goods sold in the income statement.
D. Allocated between ending inventories and cost of goods sold.
58. A supervisor’s salary is an example of:
A. Direct labor.
B. Variable factory overhead.
C. A standard cost.
D. Fixed manufacturing costs.
59. In a system designed to measure cost variances, goods transferred from the Work-in-Process account to the Finished Goods Inventory are valued at:
A. Actual cost.
B. Market value.
C. Standard cost.
D. The lower of actual cost or market value.
60. When standard costs are used in a cost accounting system:
A. A favorable cost variance results when standard amounts are less than actual costs.
B. Cost variances are shown in the year-end balance sheet as assets, if favorable, or as liabilities, if unfavorable.
C. Costs charged to the Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold accounts are actual costs.
D. Costs charged to the Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold accounts are at standard costs.
61. If the actual cost per pound of direct material is less than the standard cost per pound, there is:
A. A favorable materials price variance.
B. An unfavorable materials price variance.
C. A favorable materials quantity variance.
D. A favorable total materials variance.
62. The calculation of the labor rate variance is:
A. Standard rate multiplied by (standard hours minus actual hours).
B. Standard hours multiplied by (standard rate minus actual rate).
C. Actual labor hours multiplied by (standard rate minus actual rate).
D. Actual rate multiplied by (standard hours minus actual hours).
