Standard Costs

Question 1

T/F Standard costs eliminate the need for subjective judgement

Answer 1

FALSE - they do NOT eliminate need for judgement

Question 2

T/F Standard costs are NOT intended to determine production levels

Answer 2

TRUE

Question 3

T/F Standard costs contribute more accurate cost allocation

Answer 3

FALSE - they do NOT contribute more accurate cost allocation

Question 4

T/F Standard costs are intended to provide support for cost control

Answer 4

TRUE

Question 5

Rate variances relate to the amount __________

Answer 5

paid or received

Question 6

A favorable rate variance for direct labor indicates?

Answer 6

less was paid per hour on average than standard rate

Question 7

Direct labor rate variance equation

Answer 7

(standard labor rate - actual labor rate) x actual hours worked

Question 8

standard cost equation

Answer 8

standard rate x standard quantity

Question 9

actual cost equation

Answer 9

actual rate x actual quantity

Question 10

Cost: quantity (usage, efficiency) variance equation

Answer 10

(standard quantity - actual quantity) x standard rate

Question 11

Cost: rate (price) variance equation

Answer 11

(standard rate - actual rate) x actual quantity

Question 12

Total COST variance equation

Answer 12

(standard quantity X standard rate) - (actual quantity X actual rate)

Question 13

Marketing/revenue: quantity (usage, efficiency) variance equation

Answer 13

(actual quantity - standard quantity) x standard rate

Question 14

Marketing/revenue: rate (price) variance equation

Answer 14

(actual rate - standard rate) x actual quantity

Question 15

Marketing/revenue: Total COST variance equation

Answer 15

(actual quantity X actual rate) - (standard quantity X standard rate)