Managerial Accounting Exam 3 Fall 2017 Date: Class: Name: Busm Lisdon Multiple Choice Circle the letter of the choice that best completes the statement or answers the question. Transfer answers to a green scantron. 1. 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 identify inventory c. Used to plan direct materials, direct labor, and factory overhead d. Used to control costs. 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. 2. 3 The standard price and quantity of direct materials are separated because: GAAP reporting requires this separation a. b. direct materials prices are controlled by the purchasing department, and quantity used is controlled by the production department standard quantities are more difficult to estimate than standard prices c. d. standard prices change more frequently than standard quantities (Refer to the information below for Questions 4 and 5) The following data relate to direct materials costs for November: Actual costs Standard costs 4,700 pounds at $5.40 4,500 pounds at $6.20 What is the direct materials price variance? a. $3,600 favorable b. $160 favorable c. $3,760 favorable d. $3,600 unfavorable 4