multiple choice questions 1 the total budget variance is give 372867

Multiple Choice Questions

1. The total (budget) variance is given by the equation

a. (AP A? AQ) – (SP A? SQ)P.

b. (SP A? AQ) – (AP A? SQ)P.

c. (SP A? AQ) – (SP A? SQ)P.

d. (AP A? SP) – (AQ A? SQ)P.

e. None of the above.

2 Investigating variances from standard is

a. Always done.

b. Done if the variance is outside of an acceptable range.

c. Not done if the variance is expected to recur.

d. Done if the variance is less than 10 percent of standard cost.

e. None of the above.

3. Responsibility for the materials price variance typically belongs to

a. Production.

b. Marketing.

c. Purchasing.

d. Personnel.

e. The chief executive officer (CEO).

4 The materials price variance is usually computed

a. When materials are purchased.

b. When materials are issued to production.

c. When goods are finished.

d. After suppliers are paid.

e. None of the above.

5 Responsibility for the materials usage variance is usually assigned to

a. Production.

b. Marketing.

c. Purchasing.

d. Personnel.

e. The CEO.

6 Responsibility for the labor rate variance typically is assigned to

a. Labor unions.

b. Labor markets.

c. Personnel.

d. Production.

e. Engineering.

7 Responsibility for the labor efficiency variance typically is assigned to

a. Labor unions.

b. Personnel.

c. Production.

d. Engineering.

e. Outside trainers.

8 Which of the following items describes practices surrounding the recording of variances?

a. All inventories are typically carried at standard.

b. Unfavorable variances appear as debits.

c. Favorable variances appear as credits.

d. Immaterial variances are typically closed to Cost of Goods Sold.

e. All of the above.

9 (Appendix) Which of the following is true concerning significantly large labor variances?

a. They are prorated among Work in Process, Finished Goods, and Cost of Goods Sold.

b. They are closed to Cost of Goods Sold.

c. They are prorated among Materials, Work in Process, Finished Goods, and Cost of Goods Sold.

d. They are reported on the balance sheet at the end of the year.

e. All of the above.