The standard cost card contains quantities and costs for

MULTIPLE CHOICE

1. The standard cost card contains quantities and costs for _______. (Points : 1)

2. A total variance is best defined as the difference between total _______. (Points : 1)

3. The term standard hours allowed measures _______. (Points : 1)

4. Which of the following factors should not be considered when deciding whether to investigate a variance? (Points : 1)

5. A company wishing to isolate variances at the point closest to the point of responsibility will determine its material price variance when ______. (Points : 1)

6. The standard predominantly used in Western cultures for motivational purposes is a(n) ____ standard. (Points : 1)

7. Gallagher Corporation. incurred 2,300 direct labor hours to produce 600 units of product. Each unit should take 4 direct labor hours. Gallagher Corporation applies variable overhead to production on a direct labor hour basis. The variable overhead efficiency variance _______. (Points : 1)

8. A variable overhead spending variance is caused by ________. (Points : 1)

9. McCoy Company has the following information available for October when 3,500 units were produced (round answers to the nearest dollar).
Standards:
Material 3.5 pounds per unit @ $4.50 per pound
Labor 5.0 hours per unit @ $10.25 per hour

Actual:
Material purchased 12,300 pounds @ $4.25
Material used 11,750 pounds
17,300 direct labor hours @ $10.20 per hour

What is the labor rate variance? (Points : 1)

10. McCoy Company has the following information available for October when 3,500 units were produced (round answers to the nearest dollar).
Standards:
Material 3.5 pounds per unit @ $4.50 per pound
Labor 5.0 hours per unit @ $10.25 per hour

Actual:
Material purchased 12,300 pounds @ $4.25
Material used 11,750 pounds
17,300 direct labor hours @ $10.20 per hour

What is the labor efficiency variance? (Points : 1)

11. Joint costs are useful for _______. (Points : 1)

12. Each of the following is a method to allocate joint costs except _______. (Points : 1)

13. When allocating joint process cost based on tons of output, all products will _______. (Points : 1)

14. Scrap is defined as a _______. (Points : 1)

15. Waste created by a production process is _______. (Points : 1)

16. In a lumber mill, which of the following would most likely be considered a primary product? (Points : 1)

17. Fisher Company produces three products from a joint process. The products can be sold at split-off or processed further. In deciding whether to sell at split-off or process further, management should _______. (Points : 1)

18. The split-off point is the point at which _______. (Points : 1)

19. A product may be processed beyond the split-off point if management believes that _______. (Points : 1)

20. Which of the following is a commonly used joint cost allocation method? (Points : 1)

Click here for the solution: The standard cost card contains quantities and costs for

In a period when prices are rising and inventory quantities are stable, the inventory method that would result

MULTIPLE CHOICE

1. In a period when prices are rising and inventory quantities are stable, the inventory method that would result in the highest ending inventory is:

2. The use of LIFO during a long inflationary period can result in:

3. The inventory method that will always produce the same amount for cost of goods sold in a periodic inventory system as in a perpetual inventory system would be:

4. The primary reason for the popularity of LIFO is that it gives:

5. When using the gross profit method to estimate ending inventory, it is not necessary to know:

6. Using the dollar-value LIFO retail method for inventory,:

7. Under the gross method, purchase discounts taken are:

8. In a periodic inventory system, the cost of inventories sold is:

9. An argument against the use of LCM is its lack of:

10. A retrospective treatment of prior years' financial statements is required when there is a change from:


Click here for the solution: In a period when prices are rising and inventory quantities are stable, the inventory method that would result

The empirical evidence reveals that very few firms change their standard prices and standard quantities during the fiscal year

P 12–6: Changing Standards

The empirical evidence reveals that very few firms change their standard prices and standard quantities during the fiscal year. Most firms have the following policy, “We set our standards before the fiscal year begins and we NEVER, NEVER change them during the year (except when we have to).”

Required:
a. Evaluate the “never change” policy. Does it make any sense? Why would firms adopt such a policy?
b. When would you expect firms to change their standards during the fiscal year?

Click here for the solution: The empirical evidence reveals that very few firms change their standard prices and standard quantities during the fiscal year