41. An unfavorable labor rate variance could most likely result from all of the following except:
A. Producing at levels of output which exceed normal output levels.
B. Using highly skilled laborers to perform tasks normally performed by unskilled laborers.
C. Having laborers work excessive overtime hours.
D. Using outdated standard cost figures.
42. An unfavorable overhead volume variance results from:
A. An unfavorable overhead spending variance.
B. Poor decisions made by the production manager.
C. Producing at levels of output which exceed normal output levels.
D. Producing at levels of output which fall short of normal output levels.
43. In a standard cost system, finished goods are reported in:
A. The balance sheet at standard cost.
B. The balance sheet at actual cost.
C. The income statement at standard cost.
D. The income statement at actual cost.
44. EJB Company used a "normal" production level of 10,000 units to determine the standard per-unit cost of manufacturing overhead. Which of the following is not true?
A. There is no overhead volume variance for a given month if actual production that month is 10,000 units.
B. When actual production exceeds 10,000 units, use of standard costs results in a favorable overhead volume variance.
C. When actual production is less than 10,000 units, use of standard costs results in an unfavorable total overhead variance.
D. Overhead variances arising as a result of producing more or less than 10,000 units do not indicate either strong or poor performance by the Production Department.
45. The total overhead variance is the difference between:
A. Budgeted overhead and applied overhead.
B. Actual overhead and budgeted overhead.
C. Actual overhead and applied overhead.
D. Applied overhead and budgeted overhead.
46. Which of the following is not an advantage of using a standard cost system?
A. It eliminates the need for analysis of variances.
B. It facilitates establishing an effective system of responsibility accounting.
C. It requires an analysis of all aspects of operations.
D. It helps management control costs.
47. An important advantage of a standard cost system is that standard costs:
A. Cause financial statements to be more comparable because different companies cost their inventories in the same manner.
B. Can be determined with great precision so that inventories are valued with complete accuracy.
C. Cause a lower net income, resulting in lower income taxes.
D. Focus attention on trouble spots and facilitate prompt corrective action.
48. Standard costs:
A. May be used in job order cost systems but not in process cost accounting systems.
B. Should be revised upward when actual costs are higher than expected because of waste and inefficiency.
C. Are the same for all companies in a given industry.
D. Are the costs that should be incurred to produce a product under normal conditions.
49. Factory overhead variances are usually recorded when:
A. Overhead is applied to work-in-process.
B. Goods are finished and transferred to finished goods inventory.
C. Goods are sold.
D. Actual factory overhead costs are incurred.
50. A large favorable variance from standard costs at the end of the year should be:
A. Carried forward to the next fiscal year.
B. Shown as other income in the income statement.
C. Added to cost of goods sold in the income statement.
D. Allocated between ending inventories and cost of goods sold.