1. Poor quality materials could have an unfavorable effect on which of the following variances?
Lab efficiency variance Materials quantity Variance
A Yes Yes
b Yes No
c No Yes
d No No
2. Which of the following statements concerning ideal standards is incorrect?
A. Ideal standards generally do not provide the best motivation for workers.
B. Ideal standards do not make allowances for waste, spoilage, and machine breakdowns.
C. Ideal standards are better suited for cash budgeting than practical standards.
D. Ideal standards may be better than practical standards when managers seek continual improvement.
3. Under traditional standard costing, which of the following would commonly be included when setting a standard quantity for direct material?
An allowance for material An allowance for material rejected
wasted during production during production
a YES YES
b YES NO
c NO YES
d NO NO
4. When computing standard cost variances, the difference between actual and standard price multiplied by actual quantity yields a(n)
a Combined price and quantity variance
b Efficiency variance
d Quantity variance
5. Which of the following would produce a materials price variance?
a An excess quantity of materials used
b An excess number of direct labor-hours worked in completing a job
c Shipping materials to the plant by air freight rather than by truck
d Breakage of materials in production