Review-Standard-Costing

Standard Costing-Review1.What is the difference between calculating materials price variance and materials quantity variance? a.Price variance requires knowing the standard price of materials, whereas quantity variance requires knowing the actual price of materials. b.Price variance requires knowing the actual price of materials, whereas quantity variance requires knowing the standard quantity of materials. c.Price variance requires knowing the actual quantity of materials, whereas quantity variance requires knowing the actual price of materials. d.Price variance requires knowing the standard quantity of materials, whereas quantity variance requires knowing the actual price of materials. 2.Avalon, Inc.'s static budget shows $40,500 budgeted for direct materials, $54,000 budgeted for direct labor, and $13,500 budgeted for overhead. Avalon's actual direct materials were $42,000, actual direct labor was $51,000, and actual overhead was $13,800. What is the total difference between the static budget and actual, and is the difference favorable or unfavorable? a.$1,200, unfavorable b.$4,800, favorable c.$1,200, favorable d.$4,800, unfavorable 3.If actual results for a period have $400,000 in direct materials (DM) costs and $40,000 in operating income (OI) but the static budget was $500,000 in DM costs and $50,000 in OI, which of the following is true? a.$100,000 favorable DM; $10,000 unfavorable OI. b.$100,000 unfavorable DM; $10,000 favorable OI. c.$100,000 unfavorable DM; $10,000 unfavorable OI. d.$100,000 favorable DM; $10,000 favorable OI. 4.Olive Industries produced 30,000 units this month and used 36,000 machine hours. The company's static budget for manufacturing overhead costs based on 37,500 machine hours is as follows: During the month, Olive's actual costs were $11.80 per machine hour for indirect materials. What is the amount of difference for indirect materials shown on the company's manufacturing overhead flexible budget report? a.$1,440 unfavorableb.$1,500 unfavorable c.$16,200 favorable d.$1,500 favorable 5.Jewel and Sasha were calculating materials variances for the company. Both needed to know the actual quantity and standard price of materials. However, only Jewel needed to know the actual price of the materials, and only Sasha needed to know the standard quantity of materials. Why? a.Jewel was calculating materials price variance, whereas Sasha was calculating materials quantity variance. b.Jewel was calculating materials quantity variance, whereas Sasha was calculating materials quality variance. c.Jewel was calculating materials quality variance, whereas Sasha was calculating materials price variance. d.Jewel was calculating materials quantity variance, whereas Sasha was calculating materials price variance. 6.Fortune Corporation's Marketing Department recently accepted a rush order for a nonstock item from a valued customer. The Marketing Department filed the necessary paperwork with the Production Department, which complained greatly about the lack of time to do the job the right way. Nevertheless, the Production Department accepted the manufacturing commitment and filed the required paperwork with the Purchasing Department for the needed raw materials. A purchasing clerk temporarily misplaced the paperwork. By the time the paperwork was found, it was too late to order from the company's regular supplier. A new supplier was located, and that vendor quoted a very attractive price. The materials arrived and were rushed into production, bypassing the normal inspection processes (as directed by the Production Department supervisor) to make up for lost time. Unfortunately, the goods were of low quality and created considerable difficulty for Fortune's assembly-line personnel. Which of the following best indicates the responsibility for the materials usage variance in this situation? a.Purchasing, Marketing, and Production b.Purchasing and Marketing c.Marketing and Production d.Purchasing 7.Clover Company produced 20,000 units this month and used 24,000 machine hours. Clover's controller prepared the following static budget for manufacturing overhead costs based on 25,000 machine hours.