True False Questions: 1. Setting standard costs is relatively simple because it is done entirely by accountants True False 2. In concept, standards and budgets are essentially the same. True False A materials quantity variance is calculated as the difference between the standard direct materials price and the actual direct materials price multiplied by the actual quantity of direct materials used True False An unfavorable labor quantity variance indicates that the actual number of direct labor hours worked was greater than the number of direct labor hours that should have been worked for the output attained True False 5. in using variance reports, top management normally looks carefully at every variance True False Multiple Choice Questions 6. The difference between a budget and a standard is that a. a budget expresses what costs were, while a standard expresses what costs should be b. a budget expresses management's plans, while a standard reflects what actually happened c. a budget expresses a total amount, while a standard expresses a unit amount d. standards are excluded from the cost accounting system, whereas budgets are generally incorporated into the cost accounting system 7. Which of the following is not considered an advantage of using standard costs? a Standard costs can reduce clerical costs b. Standard costs can be useful in setting prices for finished goods c. Standard costs can be used as a means of finding fault with performance d. Standard costs can make employees "cost-conscious 8. Hofburg's standard quantities for 1 unit of product include 2 pounds of materials and 1.5 labor hours. The standard rates are $2 per pound and $7 per hour. The standard overhead rate is $8 per Hirect labor hour. The total standard cost of Hofburg's product is a. b. c. d. $14.50 $17.00 $22.50 $26.50 9. A company developed the following per-unit standards for its product: 2 pounds of direct materials at $4 per pound. Last month, 1,500 pounds of direct materials were purchased for $5,700. The direct materials price variance for last month was a. $5,700 favorable b. $300 favorable c. $150 favorable d. $300 unfavorable 10. A company uses 20.000 pounds of materials for which it paid $6.00 a pound. The materials price variance was $15,000 unfavorable. What is the standard price per pound? a. b. c. d. $0.75 $5.25 $6.00 $6.75 Monster Company produces a product requiring 3 direct labor hours at $16.00 per hour. During January, 2,000 products are produced using 6,300 direct labor hours. Monster's actual payroll during January was $98,280. What is the labor quantity variance? a. $2.280 U b. $4,800 F C. $2,520 F d. $4,800 U 12. The total overhead variance is the difference between the a. actual overhead costs and overhead costs applied based on standard hours allowed b. actual overhead costs and overhead costs applied based on actual hours c. overhead costs applied based on actual hours and overhead costs applied based on standard hours allowed d. the actual overhead costs and the standard direct labor costs 13. The perspectives included in the balanced Scorecard approach include the following except the a internal process perspective b. capacity utilization perspective C. learning and growth perspective d. customer perspective 14. Denmark Corporation's variance report for the purchasing department reports 1,000 units of material A purchased and 2,400 units of material B purchased. It also reports standard prices of $2 for Material A and $3 for Material B. Actual prices reported are $2.10 for Material A and $2.80 for Material B. Denmark should report a total price variance of a. $380 F b. $340 F C. $340 U d. $380 U 15. in using variance reports, management looks for a total assets invested b. significant variances c. competitors' costs in comparison to the company's costs d. more efficient ways of valuing inventories