true or fasle chapter 8

Question 1

A static budget is prepared for only one level of sales volume.

Answer 1

true

Question 2

A favorable variance reflects a decrease in operating income.

Answer 2

false

Question 3

A variance is the difference between an actual amount and the budgeted amount.

Answer 3

true

Question 4

A standard cost system is an accounting system that uses standards for product costs

Answer 4

true

Question 5

A standard is a sales price, cost, or quantity that is expected under normal conditions

Answer 5

true

Question 6

In a standard costing system, each input of direct materials, direct labor, and manufacturing overhead has a cost standard and an efficiency standard.

Answer 6

true

Question 7

Only substantial unfavorable variances should be investigated to determine their causes.

Answer 7

false

Question 8

Only favorable variances should be evaluated.

Answer 8

false