ACC 536 Exam III Review

A standard cost is the per-unit cost incurred under:

• Normal, but efficient operating conditions.

• Perfect operating conditions.

• Ideal operating conditions.

• Minimally acceptable operating conditions.

Which of the following is not a strategy of the learning and growth perspective of a balanced scorecard?

• Increase cross-training of employees

• Improve customer relations

• Improve employee retention

• Improve employee productivity

Capital investment projects include proposals for all of the following except:

• Expansion of R&D facilities.

• Expansion of existing product offerings.

• Acquisition of pollution control equipment.

• Refinancing existing working capital agreements.

The net present value of a proposed investment is positive; therefore, the expected rate of return on the project must be:

• Less than the discount rate.

• Less than the risk-free rate.

• Greater than the discount rate.

• Greater than the firm's cost of equity.

Amounts charged to Work in Process during production are recorded at the standard costs for the number of units produced.

• True

• False

When management considers an investment, they look for the payback period to be:

• Short.

• Long.

• Profitable.

• Useful.

In establishing standard costs for labor, management must look at all of the following except:

• Time allowed to produce each product.

• Direct labor requirements for each product.

• The wage rate of a direct laborer.

• The quantity of materials for each product.

Controlling the materials quantity variance is usually the responsibility of:

• The cost accountant.

• The purchasing agent.

• The marketing director.

• The production supervisor.

There will be a favorable materials price variance if:

• The standard price per unit is less than the actual price per unit.

• The standard price per unit is greater than the actual price per unit.

• The actual quantity purchased is greater than expected.

• The actual quantity purchased is less than expected.

Excessive overtime hours worked by direct labor workers often results in:

• An unfavorable labor rate variance.

• A favorable labor rate variance.

• A favorable materials price variance.

• An unfavorable materials price variance.