Reference no: EM132514977

Question 1. What is the primary benefit of a standard costing system?

a. It records costs at what should have been incurred.

b. It allows for a comparison of differences between actual and standard costs.

c. It is easy to implement

d. It is inexpensive and easy to use.

Question 2. Which of the following is not a way to develop a standard cost?

a. By using a fixed rate that is higher every period.

b. By performing time and motion studies.

c. By analyzing past data.

d. By using what is specified in engineering plans.

Question 3. Which of the following statements correctly describes an unfavourable material price variance?

a. Too much material was purchased.

b. A higher price was paid for material purchases compared with the standard price.

c. More material was used than called for by the standard.

d. Less material was used than called by the standard.

Question 4. What does a favourable labor efficiency variance mean?

a. Labor rates were higher than called for by standards.

b. Inexperienced labor was used, causing the rate to be lower than standard.

c. More labor was used than called for by standards.

d. Less labor was used than called for by standards.

Question 5. What does an unfavourable overhead volume variance mean?

a. Overhead costs are out of control.

b. Overhead costs are in control.

c. Production was greater than anticipated.

d. Production was less than anticipated.