61. The budgeted variable factory overhead is the standard variable overhead for the actual units produced.
62. An unfavorable cost variance means that actual cost is greater than standard cost.
63. Which of the following conditions normally would not indicate that standard costs should be revised?
A. The engineering department has revised product specifications in responding to customer suggestions.
B. The company has signed a new union contract which increases the factory wages on average by $2.00 an hour.
C. Actual costs differed from standard costs for the preceding week.
D. The world price of raw materials increased.
64. Standards that represent levels of operation that can be attained with reasonable effort are called:
A. theoretical standards
B. ideal standards
C. variable standards
D. normal standards
65. Manufacturing companies use standard costs for the following except:
A. Variable costs
B. Direct Materials
C. Direct Labor
D. Factory Overhead
66. Standard costs are used in companies for a variety of reasons. Which of the following is not one of the benefits for using standard costs?
A. Used to indicate where changes in technology and machinery need to be made.
B. Used to value inventory
C. Used to plan direct materials, direct labor, and factory manufacturing cost.
D. Used to control costs.
67. The principle of exceptions allows managers to
A. focus on correcting variances between standard costs and actual costs.
B. focus on correcting variances between variable costs and actual costs.
C. focus on correcting variances between competitor’s costs and actual costs.
D. focus on correcting variances between competitor’s costs and standard costs.
68. Several people play an essential part in setting standards. Which of the following is incorrect as to setting standards?
A. Accountants expresses judgement in dollars and cents.
B. Engineers identify material, labor, and machine requirements.
C. Human resource managers provide personnel information.
D. Quality managers provide quality measures that will be used to evaluate rejects.
69. Periodic comparisons between planned objectives and actual performance are reported in:
A. zero-base reports
B. budget performance reports
C. master budgets
D. budgets
70. The standard price and quantity of direct materials are separated because:
A. GAAP reporting requires this separation
B. direct materials prices are controlled by the purchasing department, and quantity used is controlled by the production department
C. standard quantities are more difficult to estimate than standard prices
D. standard prices change more frequently than standard quantities