The standard quantity or standard hours allowed refers to the amount of the input that should have been used to produce the actual output of the period. (Points : 2)
2. Material price variances are often isolated at the time materials are purchased, rather than when they are placed into production, to facilitate earlier recognition of variances. (Points : 2)
3. If improvement in a performance measure on a balanced scorecard should lead to improvement in another performance measure, but does not, then employees must work harder. (Points : 2)
4. Inspection time is generally considered to be value-added time. (Points : 2)
5. The variance that is most useful in assessing the performance of the purchasing department manager is: (Points : 2)
the materials quantity variance.
the materials price variance.
the labor rate variance.
the labor efficiency variance.
6. Persechino Corporation is developing standards for its products. One product requires an input that is purchased for $82.00 per kilogram from the supplier. By paying cash, the company gets a discount of 2% off this purchase price. Shipping costs from the supplier's warehouse amount to $6.55 per kilogram. Receiving costs are $0.47 per kilogram. The standard price per kilogram of this input should be: (Points : 2)
7. Grefrath Corporation is developing direct labor standards. A particular product requires 0.71 direct labor-hours per unit. The allowance for breaks and personal needs is 0.04 direct labor-hours per unit. The allowance for cleanup, machine downtime, and rejects is 0.12 direct labor-hours per unit. The standard direct labor-hours per unit should be: (Points : 2)
8. Information on Rex Co.'s direct material costs for May follows:
For the month of May, what was Rex's direct materials price variance? (Points : 2)
9. Magno Cereal Corporation uses a standard cost system to collect costs related to the production of its "crunchy pickle" cereal. The pickle (materials) standards for each batch of cereal produced are 1.4 pounds of pickles at a standard cost of $3.00 per pound. During the month of August, Magno purchased 78,000 pounds of pounds at a total cost of $253,500. Magno used all of these pickles to produce 60,000 batches of cereal. What is Magno's materials quantity variance for the month of August? (Points : 2)
10. The standards for direct materials in making a certain product are 20 pounds at $0.75 per pound. During the past period, 56,000 units of product were made and the material quantity variance was $30,000 U. The number of pounds of direct material used during the period amounted to: (Points : 2)
11. A small component is purchased for the use in the production of a major product. The standard price of the component is $0.85. During a recent period, 6,800 units of the small component were purchased and the materials price variance was $544 unfavorable. The standard number of units of the small component allowed for the actual output of the period was 5,440 units. What was the actual purchase price per unit? (Points : 2)
12. Zanny Electronics Company uses a standard cost system to collect costs related to the production of its water ski radios. The direct labor standard for each radio is 0.9 hours. The standard direct labor cost per hour is $7.20.
During the month of August, Zanny's water ski radio production used 6,600 direct labor-hours at a total direct labor cost of $48,708. This resulted in produ Edit