Accounting Exam 4

1. 1Ideal standards

   1. Ado not allow for machine breakdowns, slack, or lack of still (even momentarily)
   2. Bdemand maximum efficiency
   3. Ccan be achieved only if everything operates perfectly
   4. Dall of these
   5. Enone of these
2. 2The standard cost system differs from the actual cost systems in the assignments of

   1. Adirect materials
   2. Bdirect labor
   3. Coverhead
   4. Dall of the manufacturing inputs
   5. Enone of the manufacturing inputs
3. 3James Company manufactures t-shirts. During the year, it manufactured 250,000 t-shirts, using 2 hours of direct labor at a rate of $8.50 per hour. The materials and labor standards for manufacturing the t-shirts are:
   
   Direct materials (6 yards of fabric @ $3 per yard) $18
   Direct labor (2.4 hours @ $8 per hour) 17
   
   It took James 1,400,000 yards at $2.50 per yard to make the 250,000 t-shirts.
   
   What is James' materials price variance assuming that materials purchased equals materials used?

   1. A$750,000 F
   2. B$700,000 F
   3. C$700,000 U
   4. D$750,000 U
4. 4James Company manufactures t-shirts. During the year, it manufactured 250,000 t-shirts, using 2 hours of direct labor at a rate of $8.50 per hour. The materials and labor standards for manufacturing the t-shirts are:
   
   Direct materials (6 yards of fabric @ $3 per yard) $18
   Direct labor (2.4 hours @ $8 per hour) 17
   
   It took James 1,400,000 yards at $2.50 per yard to make the 250,000 t-shirts.
   
   What is James materials usage variance?

   1. A$250,000 F
   2. B$300,000 F
   3. C$300,000 U
   4. D$250,000 U
5. 5Bortello Corporation produces high-quality leather boots. The company has a standard cost system and has set the following standards for materials and labor.
   
   Leather (12 strips @ $20) $240
   Direct labor (10 hors @ $12) $120
   Total prime cost $360
   
   During the year Bortello produced 125 books. Actual leather purchased was 1,700 strips, at $16 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 1,500 hours at $15 per hour.
   
   Calculate the labor rate variance and the labor efficiency variance, respectively.

   1. A$4,500 U and $3,000 U
   2. B$4,500 F and $3,000 F
   3. C$4,500 U and $3,000 F
   4. D$4,500 F and $3,000 U
6. 6Seaside Company produces picture frames. During the year 190,000 picture frames were produced. Materials and labr standards for producing the picture frames are as follows:
   
   Direct materials (2 pieces of wood @$2.25) $4.50
   Direct labor (2 hours @ $10) $20.00
   
   Seaside purchased and used 400,000 pieces of wood at $2.00 each and its actual labor hours were 360,000 hours at a wage rate of $10.50.
   
   What is Seaside's total labor variance?

   1. A$20,000 F
   2. B$20,000 U
   3. C$112,500 F
   4. D$120,000 U
7. 7Kaizen costing involves

   1. Achanging the standards frequently
   2. Bchanging management
   3. Coutsourcing processes
   4. Dmajor ad campaigns
8. 8The materials price variance is computed using the equation

   1. A(Actual price X actual quantity) - (standard price x standard quantity)
   2. B(standard price x actual quantity) - (actual price x actual quantity)
   3. C(standard price x standard quantity) - (actual price x actual quantity)
   4. D(actual price x actual quantity) - (standard price x actual quantity)
   5. Enone of these
9. 9A budget that allows the determination of expected costs for various levels of activity is a(n)

   1. Aoperational budget
   2. Bsales budget
   3. Cproduction budget
   4. Dfinancial budget
   5. Eflexible budget

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Quiz on Accounting Exam 4, created by benrudrachel on 16/12/2015.

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