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385746582-Instructions

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Accountancy (Act 101)

5 Documents
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Academic year: 2016/2017
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Rozel Montevirgen
Kingswood University
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    do you have solutions for #39-47?
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    do you have solution for # 39-47???

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MULTIPLE CHOICE:

  1. Which of the following statements concerning standard costs is false? a. If properly used, standards can help motivate employees. b. All variances, whether favorable or unfavorable, should be investigated. c. Standard costs should be attainable under conditions of efficient operation. d. A standard cost system may be used with a process costing system or a job order costing system.

  2. Standard costing is used to isolate the variances between standards costs and actual costs. It allows management to measure performance and correct inefficiencies, thereby helping to a. Allocate costs accurately. b. Determine the break-even point. c. Control costs. d. Eliminate management’s need for subjective decisions.

  3. Both standard costs and budgeted costs are used for controlling costs. However, the two terms are not the same. Standard costs differ from budgeted costs in the standard costs a. Are based on the engineering studies while budgeted costs are historical costs. b. Costs that were incurred for actual production, while budgeted costs are costs that should have been incurred for such production. c. Are costs that should have been incurred for actual production, while budgeted costs are costs that should be incurred for budgeted or planned production. d. Are always expressed in total amounts, while budgeted costs are always expressed in per-unit amounts.

  4. The difference between actual costs and standard cost is called a. Favorable variance c. variance b. Unfavorable variance d. variable

  5. Which of the following statements is correct? a. A standard costs system can never be used in both the job order and process costing systems. b. Standard costing can be used in job order costing, but not in process costing system.

c. Standard costing can be used in either the job order costing system or process costing system. d. A standard cost system can be used in process costing system, but not in job order costing system.

  1. In a process costing system, equivalent units of production are computed to determine the number of complete units that could have been produced, given no beginning and ending work-in -process inventories. If a company uses standard costing in its process costing system, the equivalent units of production a. Are multiplied by the standard cost per unit to compute the total standard cost of units produced. b. Are never used. c. Are converted to standard equivalent unites and then multiplied by the actual cost per unit. d. Are assumed to be zero.

  2. A variance shows a deviation of actual results from standard or budgeted results. In deciding whether to investigate a variance or not, management may consider the following factors, except a. The amount of the variance and the cost of investigation. b. Whether the variance is favorable or unfavorable. c. The possibility that investigation will eliminate future occurrences of the variance. d. The trend of the variances over time.

  3. The following describe ideal standards, except a. Currently attainable standards. b. Theoretical or maximum efficiency standards. c. Make no allowances for waste, machine downtime, and spoilage. d. Perfection standards.

  4. Which of the following does not describe practical standards? a. Currently attainable standards. b. Can be used for product costing and cash budgeting. c. Performance that is reasonably expected to be achieved with an allowance for normal spoilage, waste, and downtime. d. Negate the need to adjust standards if working conditions change

  5. For a recent month, the accountant’s standard cost variance analysis report showed a significant amount of unfavorable materials efficiency (quantity or usage) variance that warrants and investigation. The investigation of this variance should begin with the a. Personnel manager b. Purchasing manager only c. Production manager only. d. Production manager or purchasing manager

  6. In two-way variance analysis, materials, labor, and variable overhead variances may be broken down into a. Price variance and spending variance b. Quantity or time variance and efficiency variance c. Spending variance and efficiency variance d. Spending variance and volume or capacity variance

  7. The difference between the actual time used and the amount of time that should have been used for actual production, multiplied by the standard labor rate per time is called a. Efficiency variance b. Price variance c. Spending variance d. Rate variance

  8. The difference between the actual price or rate paid and the standard price or rate that should have been paid, multiplied by the actual quantity or actual time is called a. Efficiency variance b. Quantity variance c. Time variance d. Spending variance

ITEMS 20 TO 25 ARE BASED ON THE FOLLOWING INFORMATION:

A company produces a product with the following standard costs:

Materials, 2 pieces @ P5 per piece P Labor 4 hours @ P8 per hour 32 Variable Overhead 4 hours @ P6 per hour 24 Fixed overhead* 4 hours @ P4 per hour 16 Total Standard manufacturing cost per unit P

*based on capacity level of 5,000 units

  1. If a flexible budget for 4,500 units, 5,000 units, and 5,500 units is prepared for a certain month, the budgeted costs are

4,500units 5,000units 5,500units

a. 369,000 410,000 451, b. 297,000 330,000 363, c. 377,000 410,000 443, d. 0 410,000 0 21. Assume that X is the number of units to be produced and TBC is the total budgeted cost, the flexible budget formula that the company may use to compute total budgeted cost for any value of X within the relevant range is a. TBC = 82x b. TBC = 66x c. TBC = 80, d. TBC = 66x + 80, 22. Assume that during the month, the company actually produced 4,800 units and incurred actual total manufacturing costs of P400,000, how much is the flexible budget for the actual production? a. P400, b. 396, c. 393, d. 316, 23. How much is the flexible budget variance for the month? a. 3,200 unfavorable b. 6,400 unfavorable c. 10,000 favorable d. 83,200 unfavorable 24. How much is the total standard cost that should have been incurred for the actual production of 4,800 units? a. 396, b. 400, c. 393, d. 316, 25. How much is the total standard cost variance? a. 3,200 unfavorable b. 6,400 unfavorable c. 10,000 favorable d. 83,200 unfavorable

  1. The materials mix variance for a product is P450 unfavorable and the materials yield variance is P150 unfavorable. This means that a. The materials price variance is P600 unfavorable b. The materials quantity variance is P600 unfavorable c. The total materials cost variance is definitely P600 unfavorable d. The materials price variance is also unfavorable, but the amount cannot be determined from the given information
  2. Information on Chiong Companys materials cost for October 200A is as follows

Actual Cost of direct materials P126, Actual quantity of direct materials purchased and used 4 5,000 pieces Standard quantity of direct materials allowed for October production 43,500 pieces Direct materials efficiency variance P4,500 unfavorable

For the month of October, what was Chiong’s direct materials spending variance? a. P4,200 unfavorable b. P4,200 favorable c. P9,000 favorable d. P9,000 unfavorable

ITEMS 33 AND 34 ARE BASED ON THE FOLLOWING INFORMATION

Maninang Company installs pre-fabricated stairs on residential houses. The standard materials cost for a low-cost house is P15,000 based on 2 units at a cost of P7, each. During May, Maninang Company installed stairs on 30 low-cost housing using 62 units at a cost of P7,450 or P461,900.

  1. Maninang Company’s materials price variance is a. P3,100 unfavorable b. P3,100 favorable c. P15,000 unfavorable d. P15,000 favorable
  2. Maninang Company’s materials usage variance is a. 3,100 unfavorable b. 3,000 favorable c. 15,000 favorable d. 15,000 unfavorable
  3. Delilah Company produces “one-sizes-fits-all” rubber gloves and uses standard costing to account for its costs. Each unit ( a pair ) of finished product contains 0 meters of direct materials. However, a 20% direct material spoilage calculated on input quantities occurs during the production process. The cost of direct materials is P10 per meter.

How much is the standard direct materials cost per unit of the finished product?

a. 6. b. 4. c. 16 d. 5

ITEMS 36 TO 38 ARE BASED ON THE FOLLOWING INFORMATION:

Samson Company uses a standard costing system in the production of its only product. The 84,000 units of raw materials inventory were purchased for P126,000 and 4 units of raw materials are required to produce one unit of final product. In October, the company produced 14,400 units of product. The standard cost allowed for materials was P72,000, and there was an unfavorable usage variance of P3,000.

  1. Samson Company’s standard price for one unit of materials is a. 1. b. 1. c. 2. d. 3.
  2. The units of materials used to produce the October output totaled a. 57, b. 18, c. 60, d. 55,
  3. The materials price variance for the units used in October was a. 15,000 unfavorable b. 15,000 favorable c. 3,000 unfavorable d. 3,000 favorable

ITEMS 39 TO 41 ARE BASED ON THE FOLLOWING INFORMATION:

A manufacturer of portable DVD players buys components from subcontractors for assembly into complete DVD players. Each player requires 6 units of Part A, which has a standard cost of P100 per unit. During May, the company’s records showed the following with respect to Part A:

Purchases 15,000 units Purchase Price P110 per unit Units of players produced 2, Units of Part A used in production 12,

  1. For the month of May, the company’s materials purchase price variance is a. 40,000 unfavorable b. 40,000 favorable c. 150,000 unfavorable d. 150,000 favorable

  2. The amount that will be shown on a flexible budget for Part A usage during the month of May is a. 1,200,000 unfavorable b. 1,200, c. 1,320, d. 200,

ITEMS 42 TO 47 ARE BASED ON THE FOLLOWING INFORMATION:

Calzada Company produces Four-Season Drinks by mixing juices of four fruits in season. The standard costs and input for a 50-liter batch of the juice are as follows:

Fruits Standard Input Quantity in Liters

Standard Cost Per Liter

Total Standard Cost

Santol 20 P10 P200. Mango 10 21 212. Pineapple 25 7 187. Tamarine 5 15 75. Total 60 P675.

The quantities purchased and used during the current month are shown below. A total 14 batches were produced during the month.

Fruits Quantity Purchased (Liters)

Purchase Price Quantity Used (Liters) Santol 300 P9 290 Mango 150 22 130 Pineapple 350 7 350 Tamarind 80 15 75 Total 1,450 775

  1. How much is the total materials cost variance? a. 452 unfavorable b. 160 favorable c. 1,415 unfavorable d. 2,027 unfavorable

  2. The materials purchase price variance is a. 110 favorable b. 122 favorable c. 160 unfavorable d. 2,027 unfavorable

  3. The materials usage price variance is a. 110 favorable b. 122 favorable c. 93 favorable d. 56 unfavorable

  4. The market mix variance is a. 160 favorable b. 122 favorable c. 56 unfavorable d. 93 favorable

  5. The materials yield variance is a. 160 favorable b. 122 favorable c. 93 favorable d. 56 unfavorable

  6. The materials quantity variance is equal to a. The yield variance b. The total of materials mix and yield variances c. The total of the price, mix, and yield variances d. The mix variance

ITEMS 48 AND 49 ARE BASED ON THE FOLLOWING INFORMATION:

Aristeo Company produced 3,200 units of product. Each unit requires 2 standard hours. The standard labor rate is P15 per hour. Actual direct labor for the period was P79, (6,600 hours x P12)/

  1. What is the direct labor time variance? a. 19,800 favorable b. 16,800favorable c. 6,400 unfavorable d. 3,000 unfavorable

  2. What is the direct labor rate variance? a. 19,800 favorable b. 16,800 favorable c. 6,400 unfavorable d. 3,000 unfavorable

  3. For the month of June, M. Garcia Company’s records disclosed the following data relating to direct labor: Actual Cost P25, Spending variance 2,500 favorable Efficiency variance 3,750 unfavorable Standard cost P23,

The actual direct labor hours used during June was 5,000 hours. How much was the company’s standard direct labor rate per hour? a. P5. b. P4. c. P5. d. P4.

  1. J. Valencia Company’s direct labor costs for the month of October were as follows: Standard rate per hour P25. Standard direct labor hours 84,000 hours Actual direct labor hours 80,000 hours Direct labor rate variance P67,200 favorable

What was J. Valencia Company’s total direct labor payroll for the month of October? a. P1,952, b. P2,080, c. P1,948, d. P2,083,

ITEMS 56 AND 57 ARE BASED ON THE FOLLOWING INFORMATION:

Charis Corporation produces a single product with a standard direct labor cost of 4 hours @ P12 per hour. During May, 1,000 units were produced using 4,100 hours @ P12 per hour.

  1. The direct labor efficiency variance is a. P1,200 unfavorable b. P400 unfavorable c. P420 unfavorable d. P1,220 unfavorable
  2. The total labor cost variance is a. P1,200 unfavorable b. P820 unfavorable c. P2,020 favorable d. P20,020 unfavorable

ITEM 58 TO 60 ARE BASED ON THE FOLLOWING INFORMATION:

A major activity at the Professional Regulation Commission is the processing of application forms for the Board Examinations of the various professions under its control. To analyze and control the costs incurred in the Applications Department, the PRC’s accountant previously prepared the following budgeted data for the year 200A:

Normal number of applications processed per year 150, Budgeted variable costs of processing the 150,000 applications P10,500, Fixed cost per year 2,500, Number of hours per 100 applications processed 200 hours Wage rate per 100 applications P6,

During the year 200A, the department processed a total of 120,000 applications using 250,000 hours. The cost incurred were: Total costs P11,140, Labor costs 7,500,

  1. For 200A, the application Department’s total cost to process the 120, applications assuming standard performance should be a. P13,000, b. P10,900, c. P10,500, d. P8,400,
  2. The total labor cost variance for 200A is a. 300,000 unfavorable b. 300,000 favorable c. 1,200,000 unfavorable d. 1,860,000 favorable
  3. The total direct labor cost variance may be broken down into: Spending Variance Efficiency Variance a. 1,200,000 unfavorable 10,000 unfavorable b. 1,860,000 unfavorable 300,000 unfavorable c. 300,000 unfavorable P d. P0 300,000 unfavorable

ITEMS 65 TO 67 ARE BASED ON THE FOLLOWING INFORMATION:

Johanna Corporation had the following flexible budget figures for the month of April: Materials (1,000 units at P15 per unit) P15, Direct Labor (1,000 units at 45 minutes per unit) 75,

During April, actual data are as follows: Actual production 850 units Materials costs P12, Direct labor 57,

  1. The materials cost variance is a. P b. P2,250 unfavorable c. P2,250 favorable d. P12,
  2. The total direct labor cost variance is a. 17,625 favorable b. 31,350 favorable c. 6,375 favorable d. 11,250 favorable
  3. The direct labor cost variance is a. P b. Composed of time variance and rate variance c. Composed of time variance only d. Composed of rate variance only

ITEMS 68 TO 73 ARE BASED ON THE FOLLOWING INFORMATION:

Asnawie Company’s factory workers who have a direct hand in manufacturing its products are grouped into three (3) classes – Classes A, B, and C. For the first quarter of 200A, the standard labor rates and standard time allowed for actual production were:

Class Standard Labor Hours Allowed for Production

Standard Labor Rate per Hour

Total Standard Labor Cost

A 300 hours P12 P3, B 400 10 4, C 500 7 3, Totals 1,200 hours P11,

At the beginning of the quarter, a new wage law took effect, increasing the wage rates by an average of 20%. The standard wage rates were not revised.

During the period, the company paid the following wage rates for the actual hours used:

Class Actual Rates Actual Hours Total Actual Labor Cost A P14 350 5, B 12 380 4, C 9 520 4, Totals 1,250 14,

  1. What is the total labor cost variance? a. 2,958 unfavorable b. 2,418 unfavorable c. 540 unfavorable d. 58 unfavorable

  2. What is the labor rate variance? a. 2,958 unfavorable b. 2,418 unfavorable c. 540 unfavorable d. 58 unfavorable

  3. What is the total labor time variance? a. 2,958 unfavorable b. 2,418 unfavorable c. 540 unfavorable d. 58 unfavorable

  4. The labor mix variance is a. 2,958 unfavorable b. 2,418 unfavorable c. 540 unfavorable d. 58 unfavorable

  5. The labor yield variance is a. 481 unfavorable b. 58 unfavorable c. 540 unfavorable d. 2,418 unfavorable

  6. Which of the following statements if correct? a. The production manager should be held responsible for the unfavorable rate variance. b. The labor time variance may be further analyzed by breaking it down into labor mix and yield variances. c. The personnel manager should be held responsible for the unfavorable rate variance.

  7. The direct labor spending variance for the period was a. 1,800 unfavorable b. 1,780 unfavorable c. 3,000 unfavorable d. 1,000 favorable

  8. The total prime cost variance is a. 5,000 favorable b. 780 unfavorable c. 5,780 favorable d. 4,220 favorable

  9. The total factory overhead variance is a. The difference between the actual factory overhead costs incurred and the standard factory overhead costs allowed for the actual production b. The sum of the actual factory overhead costs incurred and the standard factory overhead costs allowed for the actual production. c. The difference between the actual fixed overhead costs incurred and the standard fixed overhead costs allowed for the actual production. d. The difference between the actual variable factory overhead costs incurred and the standard variable overhead costs allowed for the actual production.

  10. One way of analyzing the variable factory overhead variance is by breaking it down into

a. variable overhead spending and efficiency variance b. variable overhead spending and rate variances c. variable overhead efficiency and time variances d. actual and standard overhead cost

  1. One way if analyzing the fixed factory overhead variances is by breaking it down into

a. fixed overhead spending and volume variances b. fixed overhead spending or volume variances c. fixed overhead spending and budget variances d. fixed overhead volume and capacity variances

  1. Variable overhead is applied on the basis of standard direct labor hours. If, for a given period, the direct labor efficiency variance is favorable, the variable overhead efficiency variance will be

a. a. favorable c. zero

b. b. unfavorable d. the same amount as the labor efficiency variance

  1. If factory overhead is applied on the basis of output, the variable factory overhead efficiency variance will be

a. equal to the direct labor efficiency variance b. unfavorable, if actual production is less than the budgeted production c. favorable, if actual production is greater than budgeted production d. zero

  1. Under the two-way variance analysis (two variance method) for factory overhead, the difference between the actual factory overhead cost incurred and the factory overhead applied to actual production is called

a. a. volume variance c. efficiency variance b. b. controllable variance d. total or net overhead variance

  1. Under the two-variance method for analyzing factory overhead, which of the following variances are composed of both variable and fixed overhead elements?

a. controllable or budget variance only b. Volume or capacity or variance only c. Both controllable and volume variances d. Neither controllable nor volume variances

  1. Under the two variance method for analyzing factory overhead, controllable or budget variance is computed by subtracting from actual factory overhead costs incurred the

a. budget allowance based on actual hours b. budget allowance based on standard hours c. budget allowance based on normal hours d. budget allowance based on budgeted hours

  1. Under the three variance method for analyzing factory overhead, the budget or spending variance is the difference between the actual factory overhead costs incurred and the
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385746582-Instructions

Course: Accountancy (Act 101)

5 Documents
Students shared 5 documents in this course

University: Kingswood University

Was this document helpful?
MULTIPLE CHOICE:
1. Which of the following statements concerning standard costs is false?
a. If properly used, standards can help motivate employees.
b. All variances, whether favorable or unfavorable, should be investigated.
c. Standard costs should be attainable under conditions of efficient
operation.
d. A standard cost system may be used with a process costing system or a
job order costing system.
2. Standard costing is used to isolate the variances between standards costs and
actual costs. It allows management to measure performance and correct
inefficiencies, thereby helping to
a. Allocate costs accurately.
b. Determine the break-even point.
c. Control costs.
d. Eliminate management’s need for subjective decisions.
3. Both standard costs and budgeted costs are used for controlling costs. However,
the two terms are not the same. Standard costs differ from budgeted costs in the
standard costs
a. Are based on the engineering studies while budgeted costs are historical
costs.
b. Costs that were incurred for actual production, while budgeted costs are
costs that should have been incurred for such production.
c. Are costs that should have been incurred for actual production, while
budgeted costs are costs that should be incurred for budgeted or planned
production.
d. Are always expressed in total amounts, while budgeted costs are always
expressed in per-unit amounts.
4. The difference between actual costs and standard cost is called
a. Favorable variance c. variance
b. Unfavorable variance d. variable
5. Which of the following statements is correct?
a. A standard costs system can never be used in both the job order and
process costing systems.
b. Standard costing can be used in job order costing, but not in process
costing system.

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