Shared Flashcard Set

Details

ACG 3331 Test 3
Review Questions
11
Accounting
Undergraduate 4
11/11/2009

Additional Accounting Flashcards

 


 

Cards

Term

 

What is the order of the budgets?

    

 

Definition

 

  1. Sales 
  2. Production
  3. Direct Materials
  4. Direct Labor
  5. Manufacturing OH
  6. Selling and Admin
  7. Cash Budget
  8. Budgeted Financial Statements
Stupid Problems Drag Down My Selfish Core Blatantly

 

Term

 Ignore your answers to the four problems above.  Assume that you calculated a favorable direct material price variance, an unfavorable direct materials quantity variance, an unfavorable direct labor rate variance, and an unfavorable direct labor efficiency variance. Which of the following statements could be a plausible explanation for some of the above variances?

a.Inferior materials were purchased that were difficult to work with.

b.The mix of workers assigned to the particular

job was heavily weighted towards the use of

higher paid, experienced individuals.

c.Poor maintenance of production equipment.

d.Due to the production schedule, workers from

other production areas were assigned to assist in

 this particular job.

e.both (a) and (b) could not be plausible explanations. 

Definition

a.Inferior materials were purchased that were difficult to work with.

c.Poor maintenance of production equipment.

d.Due to the production schedule, workers from

other production areas were assigned to assist in

 this particular job.

e.both (a) and (b) could not be plausible explanations. 

 

 

Term

Assume that Valley View Hospital decides to use a standard costing system and that direct labor hours will be used as the activity base for applying variable factory overhead costs.  Further, assume that the standard direct labor rate is twice the variable factory overhead rate.  If Valley View Hospital has an unfavorable labor efficiency variance, one can conclude that the variable overhead efficiency variance was:

a.       cannot be determined, because the labor efficiency variance and the variable overhead efficiency variance  are not related.

b.      favorable and half the labor efficiency variance.

c.       unfavorable and twice the labor efficiency variance.

d.      favorable and twice the labor efficiency variance.

     e.       unfavorable and half the labor efficiency variance. 

Definition

a.       cannot be determined, because the labor efficiency variance and the variable overhead efficiency variance  are not related.

b.      favorable and half the labor efficiency variance.

c.       unfavorable and twice the labor efficiency variance.

d.      favorable and twice the labor efficiency variance.

     e.       unfavorable and half the labor efficiency variance. 

Term

Tower Company planned to produce 3,000 units of its single product, Titactium, during  November.  The standards for one unit of Titactium specify six pounds of materials at $.30 per pound.  Actual production in November was 3,100 units of Titactium.  There was a favorable materials price variance of $380 and an unfavorable materials quantity variance of $120.  Based on these variances, one could conclude that:

         a.   more materials were purchased than were used.

         b.   more materials were used than were purchased.

         c.   the actual cost per pound for materials was less than the standard cost per pound.

         d.   the actual usage of materials was less than the standard allowed.

Definition

 a.   more materials were purchased than were used.(No Variance for this)

 b.   more materials were used than were purchased.(No Variance for this)

 c.   the actual cost per pound for materials was less than the standard cost per pound.

 d.   the actual usage of materials was less than the standard allowed.(This would lead to a unfavorable Usage Variance)

Term

A direct labor efficiency variance cannot be caused by:

         a.   inexperienced employees.

         b.   poor quality raw materials.

         c.   employee inefficiency.

         d.   an out-of-date labor time standard.

         e.   producing fewer finished units than originally planned.

Definition

a.   inexperienced employees.

b.   poor quality raw materials.

c.   employee inefficiency.

d.   an out-of-date labor time standard.

e.   producing fewer finished units than originally planned.

Term

A company uses a standard cost system and applies variable manufacturing overhead to products on the basis of standard direct labors. Which of the following situations cannot occur together during the same accounting period?

         a.   Unfavorable labor rate variance and favorable labor efficiency variance.

         b.   Unfavorable labor efficiency variance and favorable materials quantity variance.

         c.   Favorable labor rate variance and unfavorable total labor variance.

         d.   Favorable labor efficiency variance and favorable materials quantity variance.

         e.   Favorable labor efficiency variance and unfavorable variable overhead efficiency variance. 

Definition

   a.   Unfavorable labor rate variance and favorable labor efficiency variance.

b.   Unfavorable labor efficiency variance and favorable materials quantity variance.

c.   Favorable labor rate variance and unfavorable total labor variance.

d.   Favorable labor efficiency variance and favorable materials quantity variance.

e.   Favorable labor efficiency variance and unfavorable variable overhead efficiency variance. 

Term

 Variable overhead is applied on the basis of direct labor hours.  If the labor efficiency variance is unfavorable, then the variable overhead efficiency variance:

         a.   cannot be determined, because the labor efficiency variance and the variable overhead efficiency are not related.

         b.   will be favorable.

         c.   will be the same amount as the labor efficiency variance.

         d.  will be unfavorable.

         

Definition

a.   cannot be determined, because the labor efficiency variance and the variable overhead efficiency are not related.

b.   will be favorable.

c.   will be the same amount as the labor efficiency variance.

d.  will be unfavorable.

         

Term

Gathersburg Retail has three stores in Maryland.  Which of the following costs would likely be excluded when computing the profit (segment) margin controllable by store No. 3’s manager?    

         a.   Hourly labor costs incurred by personnel at Store No.3.

         b.   Property taxes attributable to Store No.3 

         c.   The salary of Gathersburg’s president.

         d.   The salary of Store No.3’s manager.

   

Definition

 

a.   Hourly labor costs incurred by personnel at Store No.3.

b.   Property taxes attributable to Store No.3 

c.   The salary of Gathersburg’s president.

d.   The salary of Store No.3’s manager.

 

Term

Which of the following is a common fixed cost to the sales departments in a department store?

         a.   Salaries of store security personnel.

         b.   Salaries of sales department managers.

         c.   Cost of goods sold.

         d.   Depreciation on fixtures used exclusively in a specific sales department.

Definition

a.   Salaries of store security personnel.

b.   Salaries of sales department managers.

c.   Cost of goods sold.

d.   Depreciation on fixtures used exclusively in a specific sales department.

Term

All other things being equal, if a division’s traceable fixed costs increase:

        a.   the division’s contribution margin ratio will decrease.

        b.   the division’s segment margin ratio will remain the same.

        c.   the division’s segment margin will decrease.

        d.   the overall company profit will remain the same.  

Definition

a.   the division’s contribution margin ratio will decrease.

b.   the division’s segment margin ratio will remain the same.

c.   the division’s segment margin will decrease.

d.   the overall company profit will remain the same.  

Term

.   An example of a common fixed cost which normally could not be assigned to specific products on a segmented income statement would be: 

         a.   product advertising       

         b.   the product manager’s salary

         c.   direct materials

         d.   salary of a corporation president

         e.   direct labor

Definition

a.   product advertising       

b.   the product manager’s salary

c.   direct materials

d.   salary of a corporation president

e.   direct labor

Supporting users have an ad free experience!