Question :
56. Which of the following conditions normally would not indicate that : 1227012
56. Which of the following conditions normally would not indicate that standard costs should be revised?
A. The engineering department has revised product specifications in responding to customer suggestions.
B. The company has signed a new union contract which increases the factory wages on average by $2.00 an hour.
C. Actual costs differed from standard costs for the preceding week.
D. The world price of raw materials increased.
57. Standards that represent levels of operation that can be attained with reasonable effort are called:
A. theoretical standards
B. ideal standards
C. variable standards
D. normal standards
58. Standard costs are used in companies for a variety of reasons. Which of the following is not one of the benefits for using standard costs?
A. Used to indicate where changes in technology and machinery need to be made.
B. Used to value inventory
C. Used to plan direct materials, direct labor, and factory manufacturing cost.
D. Used to control costs.
59. The principle of exceptions allows managers to
A. focus on correcting variances between standard costs and actual costs.
B. focus on correcting variances between variable costs and actual costs.
C. focus on correcting variances between competitor’s costs and actual costs.
D. focus on correcting variances between competitor’s costs and standard costs.
60. Periodic comparisons between planned objectives and actual performance are reported in:
A. zero-base reports
B. budget performance reports
C. master budgets
D. budgets
61. The standard price and quantity of direct materials are separated because:
A. GAAP reporting requires this separation
B. direct materials prices are controlled by the purchasing department, and quantity used is controlled by the production department
C. standard quantities are more difficult to estimate than standard prices
D. standard prices change more frequently than standard quantities
62. Standard costs are divided into which of the following components?
A. Variance Standard and Quantity Standard
B. Materials Standard and Labor Standard
C. Quality Standard and Quantity Standard
D. Price Standard and Quantity Standard
63. A favorable cost variance occurs when
A. Actual costs are more than standard costs.
B. Standard costs are more than actual costs.
C. Standard costs are less than actual costs.
D. None of the above.
64. The total manufacturing cost variance consists of:
A. Direct materials price variance, direct labor cost variance, and fixed factory overhead volume variance
B. Direct materials cost variance, direct labor rate variance, and factory overhead cost variance
C. Direct materials cost variance, direct labor cost variance, variable factory overhead controllable variance
D. Direct materials cost variance, direct labor cost variance, factory overhead cost variance
65. Which of the following is not a reason standard costs are separated in two components?
A. the price and quantity variances need to be identified separately to correct the actual major differences.
B. identifying variances determines which manager must find a solution to major discrepancies.
C. if a negative variance is over-shadowed by a favorable variance, managers may overlook potential corrections.
D. variances brings attention to discrepancies in the budget and requires managers to revise budgets closer to actual.
