WorksheetsStandard Costing Part 1
Total questions: 20
Worksheet time: 10mins
Which one of the following terms best describes the rate of output which qualified workers can achieve as an average over the working day or shift, without over-exertion, provided they adhere to the specified method of working and are well motivated in their work?
A. Standard time
B. Standard hours
C. Standard unit
D. Standard performance
1. The best characteristics of a standard cost system is
A. standard can pinpoint responsibility and help motivation
A. all variances from standard should be reviewed
A. all significant unfavorable variances should be reviewed
A. standard cost involves cost control which is cost reduction
1. Standard costs are used for all of the following except:
income determination
controlling costs
measuring efficiencies
forming a basis for price setting
Standard costs are least useful for
Measuring production efficiency
Simplifying costing procedures
Job order production systems
A. Determining minimum inventory levels
1. To which of the following is a standard cost nearly like?
Estimated Cost
Budgeted Cost
Product Cost
Period Cost
A difference between standard costs used for cost control and budgeted costs
A. Can exist because standard costs must be determined after the budget is completed.
A. Can exist because standard costs represent what costs should be while budgeted costs represent expected actual costs.
A. Can exist because budgeted costs are historical costs while standard costs are based on engineering studies.
A. Can exist because establishing budgeted costs involves employee participation and standard costs do not.
1. Normal costing and standard costing differ in that
A. the two systems can show different overhead budget variances.
only normal costing can be used with absorption costing
A. the two systems show different volume variances if standard hours do not equal actual hours.
A. normal costing is less appropriate for multiproduct firms
1. When standard costs are used in a process-costing system, how, if at all, are equivalent units of production (EUP) involved or used in the cost report at standard?
A. Equivalent units are not used.
A. Equivalent units are computed using a special approach.
A. The actual equivalent units are multiplied by the standard cost per unit.
A. The standard equivalent units are multiplied by the actual cost per unit.
1. The type of standard that is intended to represent challenging yet attainable results is:
theoretical standard
flexible budget standard
A. controllable cost standard
normal standard
expected actual standard
1. A company using very tight standards in a standard cost system should expect that
A. Most variances will be unfavorable
No incentive bonus will be paid
A. Costs will be controlled better than if lower standards were used
A. Employees will be strongly motivated to attain the standard
1. A predetermined overhead rate for fixed costs is unlike a standard fixed cost per unit in that a predetermined overhead rate is
A. based on an input factor like direct labor hours and a standard cost per unit is based on a unit of output.
A. based on practical capacity and a standard fixed cost can be based on any level of activity.
used with variable costing while a standard fixed cost is used with absorption costing
A. likely to be higher than a standard fixed cost per unit.
If a company wishes to establish factory overhead budget system in which estimated costs can be derived directly from estimates of activity levels, it should prepare a
Flexible Budget
Fixed Budget
Capital Budget
Discretionary Budget
1. The primary difference between a fixed (static) budget and a variable (flexible) budget is that a fixed budget:
A. cannot be changed after the period begins; while a variable budget can be changed after the period begins
is a plan for a single level of sales (or other measure of activity); while a variable budget consists of several plans, one for each of several levels of sales (or other measure of activity
A. includes only fixed costs; while variable budget includes only variable costs
A. is concerned only with future acquisitions of fixed assets; while a variable budget is concerned with expenses that vary with sales
1. Which of the following term is best identified with a system of standard cost?
Contribution approach
Management by exception.
Marginal costing.
A. Standard accounting system.
Which department is typically responsible for a materials price variance?
Engineering
Production.
Purchasing.
Sales.
1. Under a standard cost system, the materials efficiency variance are the responsibility of
Production and industrial engineering.
Purchasing and industrial engineering.
Purchasing and sales.
Sales and industrial engineering.
1. Which of the following people is most likely responsible for an unfavorable variable overhead efficiency variance?
production supervisor
accountant
supplier
purchasing agent
1. Which variance is LEAST likely to be affected by hiring workers with less skill than those already working?
Material use variance.
Labor rate variance
Material price variance
Variable overhead efficiency variance.
1. Which of the following standard costing variances would be least controllable by a production supervisor?
Overhead volume
Materials usage
Labor efficiency.
Overhead efficiency
1. The variance resulting from obtaining an output different from the one expected on the basis of input is the:
mix variance
usage variance
yield variance
efficiency variance
