acc topic 11

What are the performance goals used by manufacturers?

• Direct materials, Direct labor, Factory overhead

• Ideal standards, Theoretical standards, Normal standards

• Direct materials, Direct labor, Variable overhead

• Direct materials, Direct labor, Fixed overhead

What is the purpose of a standard cost system?

• To measure the difference between actual cost and standard cost

• To focus only on efficiency improvements

• To limit operating improvements

• To determine actual cost and cost variances

What is the main criticism of using standards?

• Workers focus on their own operations

• Workers focus on efficiency improvements

• Workers focus on the organization's objectives

• Workers lose sight of larger objectives

What is the purpose of a budget performance report?

• To review and revise standards

• To summarize actual costs and standard amounts

• To calculate direct materials variances

• To measure the difference between actual cost and standard cost

What is the formula to calculate direct materials price variance?

• Actual Quantity x Actual Price

• Standard Price x Actual Quantity

• Standard Price (Actual Quantity – Standard Quantity)

• Actual Quantity (Actual Price – Standard Price)

What is the formula to calculate direct materials quantity variance?

• Standard Price (Actual Quantity – Standard Quantity)

• Actual Quantity (Actual Price – Standard Price)

• Standard Price x Actual Quantity

• Actual Quantity x Actual Price

What is the interpretation of an unfavorable fixed factory overhead volume variance?

• The company used its fixed overhead resources efficiently

• The company used its fixed overhead resources more than expected

• The company used its fixed overhead resources less than expected

• The company used its fixed overhead resources at normal capacity

What is the purpose of a factory overhead cost variance report?

• To control factory overhead costs

• To summarize actual costs and standard amounts

• To measure direct labor variances

• To calculate standard costs

What is the variable factory overhead controllable variance used to indicate?

• The ability to keep factory overhead costs within budget limits

• The difference between actual and budgeted variable overhead

• The use of fixed overhead resources

• The budgeted fixed overhead at 100% of normal capacity

What is the main purpose of setting standards for businesses?

• To determine performance goals

• To focus only on efficiency improvements

• To limit operating improvements

• To measure the difference between actual cost and standard cost