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Exam 16: Activity Based Costing

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Question 31

True/False

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The materials price standard is based on the purchasing department's best estimate of the cost of raw materials.

A) True
B) False

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Question 32

Multiple Choice

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The standard quantity allowed for the units produced was 4500 pounds the standard price was $2.50 per pound and the materials quantity variance was $375 favorable.Each unit uses 1 pound of materials.How many units were actually produced?

A) 4350
B) 4500
C) 11625
D) 4650

E) A) and B)
F) All of the above

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Question 33

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An unfavorable labor quantity variance indicates that the actual number of direct labor hours worked was greater than the number of direct labor hours that should have been worked for the output attained.

The per-unit standards for direct labor are 1.5 direct labor hours at $15 per hour.If in producing 2400 units the actual direct labor cost was $46000 for 3000 direct labor hours worked the total direct labor variance is

The standard direct labor cost for producing one unit of product is 5 direct labor hours at a standard rate of pay of $20.Last month 15000 units were produced and 73500 direct labor hours were actually worked at a total cost of $1350000.The direct labor quantity variance was

In Zero Company's income statement they report gross profit of $55000 at standard and the following variances: $\begin{array} { l r r } \text { Materials price } & \$ 420 \mathrm {~F} \\\text { Materials quantity } & 600 \mathrm {~F} \\\text { Labor price } & 420 \mathrm {~U }\\\text { Labor quantity } & 1,000 \mathrm {~F} \\\text { Overhead } & 900 \mathrm {~F}\end{array}$ Zero would report actual gross profit of

A company developed the following per-unit standards for its product: 2 gallons of direct materials at $8 per gallon.Last month 3000 gallons of direct materials were purchased for $22800.The direct materials price variance for last month was

The standard predetermined overhead rate must be based on direct labor hours as the standard activity index.

Hofburg's standard quantities for 1 unit of product include 2 pounds of materials and 1.5 labor hours.The standard rates are $2 per pound and $7 per hour.The standard overhead rate is $8 per direct labor hour.The total standard cost of Hofburg's product is

The perspectives included in the balanced scorecard approach include all of the following except the

The starting point for determining the causes of an unfavorable materials price variance is the purchasing department.

Clark Company manufactures a product with a standard direct labor cost of two hours at $18.00 per hour.During July 2000 units were produced using 4200 hours at $18.30 per hour.The labor price variance was

The matrix approach to variance analysis

The difference between the actual labor rate multiplied by the actual labor hours worked and the standard labor rate multiplied by the standard labor hours is the

If actual costs are less than standard costs the variance is favorable.

Which department is usually responsible for a labor price variance attributable to misallocation of workers?

A company developed the following per unit materials standards for its product: 3 pounds of direct materials at $5 per pound.If 12000 units of product were produced last month and 37500 pounds of direct materials were used the direct materials quantity variance was

Standards based on the optimum level of performance under perfect operating conditions are

The overhead controllable variance relates primarily to fixed overhead costs.

Standard costs may be incorporated into the accounts in the general ledger.