Chapter Seven: Standard Costing And Variance Analysis

Front 1

primary purpose of using a standard cost system

Back 1

to provide distinct measure of cost control

Front 2

the standard cost card contains quantities and costs for

Back 2

direct material, direct labor, and overhead

Front 3

are favorable variances necessarily good variances?

Back 3

no

Front 4

in a standard cost system, WIP inventory is ordinarily debited with

Back 4

standard costs based on production output

Front 5

a standard cost system may be used in

Back 5

either job order costing or process costing

Front 6

standard costs may be used for

Back 6

product costing, planning, or controlling

Front 7

a purpose of standard costing is to

Back 7

simplify costing procedures

Front 8

what does a bill of material include

Back 8

quantity of component inputs, quality of component inputs and type of product input

Front 9

an operations flow document

Back 9

specifies tasks to make a unit and the times allowed for each task

Front 10

calculate total variance

Back 10

total actual cost - total cost applied for the actual output of the period

Front 11

the term 'standard hours allowed' measures

Back 11

actual output at standard hours

Front 12

at the end of a period, a significant material quantity variance should be

Back 12

allocated among WIP, finished goods, and cot of goods sold

Front 13

calculate price variance

Back 13

(actual price-standard price) x actual quantity

Front 14

the sum of the material price variance (calculated at point of purchase) and material quantity variance equals

Back 14

no meaningful number

Front 15

when would a company most likely have an unfavorable labor rate variance and a favorable labor efficiency variance if

Back 15

the mix of workers used in the production process was more experienced than the normal mix

Front 16

if actual direct labor hours (DLHs) are less than standard direct labor hours allowed and overhead is applied on a DLH basis, a (n)

Back 16

favorable variable overhead effieiceny variance exists

Front 17

total labor variance can be subdivided into

Back 17

rate variance, yield variance, or mix variance

Front 18

A company has a favorable variable overhead spending variance, an unfavorable variable overhead efficiency variance, and underapplied variable overhead at the end of a period. The journal entry to record these variances and close the variable overhead control account will show which of the following

Back 18

credit to VOH spending variance

debit to VOH efficiency variance

credit to VMOH

Front 19

example of controllable variances

Back 19

VOH spending and total overhead budget

Front 20

the variance least significant for purposes of controlling costs is the

Back 20

fixed overhead volume variance

Front 21

the variance most useful in evaluating plant utilization is the

Back 21

fixed overhead volume variance

Front 22

a favorable fixed overhead volume variance occurs if

Back 22

production is greater than planned

Front 23

calculate fixed overhead spending variance

Back 23

actual fixed overhead - budgeted fixed overhead

Front 24

calculate total overhead spending variance

Back 24

total actual overhead minus total budgeted overhead at the actual input production level

Front 25

what does a favorable fixed overhead spending variance indicate

Back 25

actual fixed overhead is less than budgeted fixed overhead

Front 26

an unfavorable fixed overhead volume variance is most often caused by

Back 26

normal capacity exceeding actual production levels