What results from implementing standard cost systems in manufacturing environment

.What results from implementing standard cost systems in manufacturing environments emphasize continuous improvement and just-in-time manufacturing and purchasing?

a.The standard cost system enhances the operational control.

b.The materials price variance may encourage the purchasing department to buy in smaller quantities to reduce inventories.

c.Variances can be computed and presented in reports to higher-level managers.

d.The operational level will benefit from the detailed computation of variances.

 

 

 

12.How are costs assigned in a normal cost system?

a.actual direct materials, actual direct labour and budgeted manufacturing overhead

b.actual direct materials, actual direct labour and actual manufacturing overhead

c.budgeted direct materials, standard direct labour and standard manufacturing overhead

d.budgeted direct materials, standard direct labour and standard manufacturing overhead

 

 

 

13.How are costs assigned in a standard cost system?

a.actual direct materials, actual direct labour and budgeted manufacturing overhead

b.actual direct materials, actual direct labour and actual manufacturing overhead

c.standard direct materials, standard direct labour and standard manufacturing overhead

d.budgeted direct materials, standard direct labour and standard manufacturing overhead

 

 

 

14.Which of the following is NOT characteristic of normal costing systems?

a.A normal costing system predetermines overhead costs.

b.A normal costing system assigns direct materials and direct labour to products using a predetermined rate.

c.In a normal costing system overhead is assigned using a budgeted rate and actual activity.

d.A normal costing system has less capacity for control than a standard costing system.

 

 

 

15.Which of the following is NOT an advantage of standard costing over normal costing and actual costing?

a.there is a greater capacity for control

b.the ability to easily distinguish the FIFO and weighted average methods of accounting for beginning inventory costs

c.it is unnecessary to compute a unit cost for each equivalent unit cost category

d.provides for readily available unit cost information

 

 

 

16.Which of the following provides both the production data needed to calculate the standard unit cost and the underlying details for the standard cost per unit?

a.the standard cost sheet

b.the standard production budget

c.the balance sheet

d.the standard work-in-process account

 

 

 

17.Which formula is used to compute standard hours allowed?

a.unit labour standard ? actual output

b.unit labour standard ? standard output

c.unit labour standard ? actual input

d.unit labour standard ? standard input

 

 

 

18.Which formula is used to compute the standard quantity of materials allowed?

a.unit quantity standard ? standard output

b.unit quantity standard ? actual input

c.unit quantity standard ? standard input

d.unit quantity standard ? actual output

 

 

 

19.Mover Company has developed the following standards for one of its products:

Direct materials:7.5 kg ? $8 per kilogram

Direct labour:2 hours ? $12 per hour

 

The following activity occurred during the month of March:

Materials purchased:5,000 kg costing $42,500

Materials used:3,600 kg

Units produced:500 units

Direct labour:1,150 hours at $11.80 per hour

 

The company records materials price variances at the time of purchase. What is the variable standard cost per unit for materials and labour?

a.$38

b.$74

c.$84

d.$98

 

 

 

20.What is the materials price variance?

a.It is the difference between the actual and standard unit price of an input multiplied by the number of inputs used.

b.It is the difference between the actual and standard unit price of an output multiplied by the number of inputs used.

c.It is the difference between the actual and standard unit price of an input multiplied by the number of inputs purchased.

d.It is the difference between the actual and standard unit price of an output multiplied by the number of inputs purchased.