Midterm Examination - Strategic

Cost Management
Points:
71/100
Incorrect
0/1 Points
1.Idol Inc. adds materials at the beginning of the process in Assembly
Department.  Conversion costs were 70% complete as to the 9,500 work in
process units on September 1 and 40% incomplete as to the 7,000 work in
process units on September 30. During September, 12,000 units were completed
and transferred to the next department. An analysis of the cost relating to work in
process on September 1 and to production activity for September is as follows:
Work in process, September 1

             Materials (costs)                                 10,000

             Conversion costs                                  7,500

Costs incurred during September

             Materials (costs)                                 42,750

             Conversion costs                                52,525

The total cost per equivalent unit for September under FIFO and Average
10; 6.49, respectively
11.84; 5.49, respectively
10; 5.49, respectively
11.84; 6.49, respectively
Correct
1/1 Points
2.An equivalent unit of material or conversion cost is equal to:

the prime cost

 the amount of material or conversion cost necessary to complete one unit of production
a unit of work in process inventory
the amount of material or conversion cost necessary to start a unit of production into work in
process
Correct
1/1 Points
3.The variance resulting from obtaining an output different from the one
expected on the basis of input is the:
mix variance
output variance
usage variance
yield variance
Correct
1/1 Points
4.If the normal spoilage is detected at an inspection point within the process, the
cost of that spoilage should be
Allocated to ending work in process and units transferred out based on their relative values.
Included with the cost of the units completed in that department during the period.
Included with the cost of the units sold during the period.
Allocated to the good units that have passed the inspection point.
Incorrect
0/1 Points
5.During March, Quig Company's Department Y equivalent unit product costs,
computed under the average cost method, were as follows:
·         Materials                    P1
·         Conversion                  3
·         Transferred-in             5
Materials are introduced at the end of the process in Department Y. There were
4,000 units (40% complete as to conversion costs) in work in process at March 31.
The total costs assigned to the March 31 work in process inventory should be:

P36,000
P28,800
P27,200
 P24,800
Correct
1/1 Points
6.Standard costs are least useful for
Measuring production efficiency.
Simplifying costing procedures.
Estimating future costs.
Determining minimum inventory levels.
Incorrect
0/1 Points
7.If the actual direct labor rate is lower than the standard direct labor rate, the
journal entry to record the variance will include
Debit to direct labor efficiency variance.
Credit to direct labor efficiency variance.
Debit to direct labor rate variance.
Credit to direct labor rate variance.
Correct
1/1 Points
8.Beginning work in process was 60% complete as to conversion costs, and
ending work in process was 45% complete as to conversion costs. The amount of
the conversion cost included in ending work in process (using the average cost
method) is determined by multiplying the average unit conversion costs by what
percentage of the total units in ending work in process?

60%
55%
45%
52%
Correct
1/1 Points
9.Rainbow Company uses a standard cost system for its production   process.
Rainbow Company applies overhead based on direct labor hours. The following
information available for July:
Standard:
Direct labor hours per unit                                            2.20
Variable overhead per hour                                        ₱2.50
Fixed overhead per hour (Based on 11,990 DLHs)   ₱3.00

Actual:
Units produces                                                            4,400
Direct labor hours                                                       8,800
Variable overhead                                                   ₱29,950
Fixed overhead                                                       ₱42,300
Using the four-variance approach, what is the variable overhead spending
variance?

25 F
7,950 U
7,975 U
10,590 U
Correct
1/1 Points
10.What are transferred-in costs as used in a process costing system?
Labor that is transferred from another department within the same plant instead if hiring
temporary workers from the outside
Cost of the production of a previous internal process that is subsequently used in a succeeding
internal process
Supervisory salaries that are transferred from an overhead cost center to a production cost
center
Ending work in process inventory of a previous process that will be used in a succeeding process
Correct
1/1 Points
11.Suppose a standard cost system is being used. What do you call the various in
the use of materials which can be calculated by comparing the record of
materials withdrawn with the standard consumption?
Volume variance
Quantity variance
Efficiency variance
Price variance
Incorrect
0/1 Points
12.LMN Company Co. uses a FIFO process costing system. The company had
5,000 units that were 60% complete as to conversion costs at the beginning of
the month. The company started 22,000 units this period and had 7,000 units in
ending Work in Process inventory that were 35% complete as to conversion costs.
What are the equivalent units for materials, if materials are added at the end of
the process?

18,000
20,000
22,000
27,000
Correct
1/1 Points
13.Materials and labor cost standards are generally based on:
expected actual conditions, anticipated prices, and desired efficiency levels
theoretical conditions, present price levels, and desired efficiency levels
capacity conditions, anticipated prices, and desired efficiency levels
normal conditions, present price levels, and desired efficiency levels
Correct
1/1 Points
14.A characteristic of a process costing system is that:

costs are accumulated by order

it is used by a company manufacturing custom machinery
it requires a lot more detailed accounting than does a job order system
work in process inventory is restated in terms of completed units
Correct
1/1 Points
15.The type of standard that is intended to represent challenging yet attainable
results is:
theoretical standard
flexible budget standard
 controllable cost standard
normal standard
Correct
1/1 Points
16.Gyro Products transferred 10,000 units to one department. An additional 3,000
units of materials were added in the department. At the end of the month, 7,000
units were transferred to the next department. There was no beginning inventory.
The costs for units transferred in would be effectively allocated over:
17,000 units
13,000 units
10,000 units
7,000 units
Correct
1/1 Points
17.Yram’s direct labor costs for the month of January 2020 were as follows:
Standard direct labor costs                                  42,000
Actual direct labor hours                                      40,000
Direct labor rate variance, Favorable                    8,400
Standard direct labor rate per hour                          6.50
What was Yram’s direct labor payroll for the month of January 2020?

243,000
244,000
251,600
260,000
Correct
1/1 Points
18.Which is irrelevant in determining the Equivalent Unit of Production of FIFO
method?
EUP of ending inventory.
Beginning inventory units.
EUP of completed units.
Cost of beginning inventory.
Correct
1/1 Points
19.XYZ Company uses a weighted average process costing system and started
30,000 units this month. XYZ had 12,000 units that were 4/5 incomplete as to
conversion costs in beginning Work in Process inventory and 3,000 units that
were 40% complete as to conversion costs in ending Work in Process inventory.
What are equivalents units for conversion costs?
37,800
40,200
40,800
42,000
Correct
1/1 Points
20.One-way of analyzing the fixed FOH variance is breaking it down into
Fixed overhead spending and volume variances.
Fixed overhead and spending and budget variances.
Fixed overhead efficiency and volume variances.
Fixed overhead efficiency and capacity variances.
Incorrect
0/1 Points
21.An equivalent unit of material or conversion cost is equal to
The amount of material or conversion cost necessary to complete one unit of production
A unit of work in process inventory
The amount of material or conversion cost necessary to start a unit of production into work in
process
Fifty percent of the material or conversion cost of a unit of finished goods inventory
Correct
1/1 Points
22.LMN Company’s direct labor costs for the month of January were as follows:
Actual direct labor hours                                        20,000
Standard direct labor hours                                   21,000
Direct labor rate variance – unfavorable               ₱3,000
Total payroll                                                         126,000
What was LMN’s direct labor efficiency variance?
 6,000 Favorable
6,150 Favorable
6,300 Favorable
6,450 Favorable
Correct
1/1 Points
23.Forrest Company uses a standard cost system to its production process and
applies overhead based on direct labor hours. The following information is
available in August when Forrest made 4,500 units:
Standard:

 DLH per unit                                                       2.50

 Variable overhead per DLH                                ₱1.75
 Fixed overhead per DLH                                    ₱3.10
 Budgeted variable overhead                           ₱21,875
 Budgeted fixed overhead                               ₱38,750

Actual:

 Direct labor hours                                             10,000

 Variable overhead                                           ₱26,250
 Fixed overhead                                               ₱38,000

Using the two-variance approach, what is the controllable variance?

4,375.00 U
4,375.00 F
5,812.50 U
5,812.50 F
Incorrect
0/1 Points
24.Jameson Corp. has provided the following standard direct labor cost for its
product:
·         Standard direct labor is 2 hours per unit of the product.
·         Standard rate is ₱15 per direct labor hours.
During the year, the company produced 1,000 units of the product through 1,800
direct labor hours at a total labor cost of ₱36,000.
The journal entry to record the labor variances will include

Debit to direct labor rate variance of ₱9,000.

Debit to direct labor efficiency variance of ₱3,000.
Credit to salaries payable of ₱30,000
Debit to work in process of ₱36,000
Correct
1/1 Points
25.Which of the following statements are true?
Statement 1 – The weighted average method or process costing is
computationally simpler
than the FIFO method of process costing
Statement 2 – Manufacturing companies that use process costing would usually,
have more
products than manufacturing companies that use job-order costing.
Statement 3 – The production report prepared by companies using process
costing will
indicate the cost and quantity of materials purchased during the period.

I only
II only
I and III only
I, II, and III
Correct
1/1 Points
26.Goode Manufacturing has three producing departments in its factory. The
ending inventory in the Milling Department consisted of 3,000 units. These units
were 60% complete with respect to labor and factory overhead. Materials are
applied at the end of the milling process. Unit costs for the complete process in
the Milling Department are:  materials, P1; labor, P2; and factory overhead, P3.
The appropriate unit cost for each unit in the ending inventory is:
 P2
P5
P3
P6
Incorrect
0/1 Points
27.LMN Company Co. uses a average costing system. The company had 5,000
units that were 60% complete as to conversion costs at the beginning of the
month. The company started 22,000 units this period and had 7,000 units in
ending Work in Process inventory that were 35% complete as to conversion costs.
What are the equivalent units for labor and overhead?

22,450
20,000
19,450
27,000
Correct
1/1 Points
28.P Company uses a standard cost system and prepared the following budget at
normal capacity for March:
Direct labor hours                                                     24,000
Variable OH                                                                     ₱  48,000
Fixed OH                                                                         ₱108,000
Total OH per DLH                                                            ₱      6.50
Actual data for March were as follows:
Direct labor hours worked                                                   22,000
Total OH                                                                          ₱147,000
Standard DLHs allowed for capacity attained                     21,000
Using the two-way analysis of overhead variances, what is the controllable
variance for March?

₱3,000 F
₱5,000 F
₱9,000 F
₱10,500 U
Incorrect
0/1 Points
29.The following information pertains to the month of July for Michelle Company:

 Beginning work in process inventory – P17,500 (10,000 units; 100%

complete for
materials, and 60% complete for conversion cost)
 Units completed – 60,000 units
 Cost per equivalent units; Materials – P2.50; Conversion Cost, P2

Based on the above information, the cost of units transferred out during the July
is
P260,000
P242,500
P254,500
P250,500
Correct
1/1 Points
30.Which of the following accounts is credited when abnormal spoilage is written
off in an actual cost system?
Miscellaneous revenue.
Loss from spoilage.
Finished goods.
Work in process.
Incorrect
0/1 Points
31.A continuous loss
Occurs evenly throughout the production process.
Never occurs during the production process.
Always occurs at the same place in a production process.
All of the above.
Correct
1/1 Points
32.Which of the following is not relevant in determining weighted average unit
cost in process costing?
Cost of beginning inventory.
Equivalent unit production in beginning inventory.
Equivalent unit production in ending inventory.
Units completed.
Correct
1/1 Points
33.Che Company uses the weighted average method. It had P8,000 of conversion
cost in the beginning Work in Process Inventory and added P64,000 of
conversion cost during the year. The company completed 40,000 equivalent units
for conversion costs during the year. The Company had 10,000 units in the
Ending Work in Process Inventory that were 30% complete as to conversion. The
amount of conversion cost assigned to the unit in process
P12,600
P11,200
P5,400
P4,800
Correct
1/1 Points
34.In a standard cost system, when production is greater than the estimated unit
or denominator level, there will be
An unfavorable capacity variance
A favorable materials and labor usage variance
A favorable volume variance
A favorable budget variance
Correct
1/1 Points
35.LMN uses standard costing. The following data are available for October:
Actual quantity of direct material used                            23,500 lbs.
Standard price of direct materials                                   ₱2 per lb.
Material quantity variance                                               ₱1,000 U
What is the standard quantity of materials allowed for October production?
 23,000 lbs.
24,000 lbs.
24,500 lbs.
25,000 lbs.
Correct
1/1 Points
36.The four-variance method reconciles to the two-variance method by
combining which of the following to get the controllable variance?

fixed efficiency variance and idle capacity variance

spending variance and fixed efficiency variance
spending variance and idle capacity variance
spending variance and variable efficiency variance
Incorrect
0/1 Points
37.A Manufacturer of radios purchases components from subcontractors for
assembly into complete radios. Each radio requires three units each of part X,
which has a standard cost of ₱2.90 per unit. During June, the company had the
following experience with respect to part X:
Purchases (₱36,000)                               12,000 units
Consumed in manufacturing                   10,000 units
Radio manufactured                                  3,000
During June, the company incurred a material purchase price variance of

900 F
900 U
1,200 F
1,200 U
Correct
1/1 Points
38.Moonpools Corporation’s standard wage rate is ₱12.20 per direct labor hour
(DLH) ad according to the standards, each unit of output requires 3.9 DLHs. In
April, 5,200 units were produced, the actual wage rate was ₱12.10 per DLH, and
the actual hours were 24,150 DLHs.
The labor rate variance for April would be recorded as

Credit of ₱2,028.
Credit of ₱2,415.
Debit of ₱2,028.
Debit of ₱2,415.
Incorrect
0/1 Points
39.Information on Julius Corp. direct material costs are as follows:
Standard unit price                                                             3.60
Actual quantity purchased                                               1,600
Standard quantity allowed for actual production             1,450
Materials purchase price variance, favorable                    240
What was the actual purchase price per unit, rounded to the nearest centavo?

3.06
3.11
3.45
3.75
Correct
1/1 Points
40.ABC Inc. is employing standard costing for its product. For the year ended
December 31, 20x1, it provided the following data:

 During the year, the company acquired 1,500 units of direct materials at
a total cost of ₱15,000.
 The journal entry to record the material variance during the year
includes a credit to material usage variance in the amount of ₱700.
 The standard direct material is 5 per product.
 The company manufactured 200 units of product using 900 direct
materials.

The journal entry to record the material price variance will include a

Debit to material price variance of ₱4,500.

 Debit to material price variance of ₱2,700.
Credit to material price variance of ₱10,500.
Credit to material price variance of ₱6,300
Correct
1/1 Points
41.The equivalent units for conversion costs is 47,500 units. The beginning
inventory consisted of 15,000 units, 60% complete. The ending inventory
consisted of 10,000 units, 75% complete. Assuming a FIFO basis of computing
equivalent units, the number of units started during the month was
34,000 units
31,000 units
44,000 units
41,500 units
Correct
1/1 Points
42.When computing variances from standard costs, the difference between actual
and standard price multiplied by the actual quantity yields a
Combined price-quantity variance
Price variance
Volume variance
Mix variance
Correct
1/1 Points
43.The most effective standards are set following a careful study of products and
operating conditions by the:
Accounting Department, central management, and the Industrial Engineering Department
central management and the employees whose performance is being evaluated
Accounting Department and engineering staff
Industrial Engineering Department and the employees whose performance is being evaluated
Incorrect
0/1 Points
44.The labor efficiency variance is computed as:
the difference between standard and actual rates, multiplied by standard hours
 the difference between standard and actual hours, multiplied by standard rate
the difference between standard and actual rates, multiplied by actual hours
the difference between standard and actual hours, multiplied by the difference between
standard and actual rates
Correct
1/1 Points
45.Which of the following is true of standard costing?
It uses predetermined overhead rates times a standard base
It uses actual rates times a standard base
It uses an actual base times a predetermined rate
It uses actual rates exclusively
Incorrect
0/1 Points
46.Which one of the following statements is true concerning standard costs?
Standard costs are estimates of costs attainable only under the most ideal conditions, but rarely
practicable.
Standard costs are difficult to use with a process-costing system.
If properly used, standards can help motivate employees.
Unfavorable variances, material in amount, should be investigated, but large favorable variances
need not be investigated.
Correct
1/1 Points
47.DEF’s direct labor information for Product C for the month of October is as
follows:
Standard rate                                                                   ₱6.10 per hour
Actual rate                                                                        ₱6.00 per hour
Standard hours allowed for actual production                 1,500 hours
Labor efficiency variance                                                            ₱600 U
What is the actual hours worked?

1,400
1,402
1,598
1,600
Correct
1/1 Points
48.Chicago Processing Co. uses the average costing method and reported a
beginning inventory of 5,000 units that were 20% complete with respect to
materials in one department. During the month, 11,000 units were started; 8,000
units were finished; ending inventory amounted to 8,000 units that were 60%
complete with respect to materials. Total materials cost during the period for
work in process should be spread over:
12,800 units
16,000 units
11,200 units
13,200 units
Incorrect
0/1 Points
49.NGO Company has the following information available for October when
3,500 units were produced (round answers to the nearest peso).
Standards:

      Material                       3.5 pounds per unit @ ₱4.50 per pound

      Labor                           5.0 hours per unit @ ₱10.25 per hour

 Actual:

      Material purchased                 12,300 pounds @ 4.25

      Material used                          11,750 pounds
      17,300 direct labor hours @ ₱10.20 per hour

What is the labor rate variance?

865 U
865 F
875 U
875 F
Correct
1/1 Points
50.To determine the EUP using the FIFO method of process costing, work for the
current period must be stated in units
Completed during the period and units in ending inventory.
Completed from beginning inventory, units started and completed during the period, and units
partially completed in ending inventory.
Started during the period and units transferred out during the period.
Processed during the period and units completed during the period.
Incorrect
0/1 Points
51.John Ben and Ben Inc. analyzes manufacturing overhead in the production of
its only one product, CD. The following set of information applies to the month of
May, 2026:
Budgeted

 Units produced                                         40,000              

 Variable manufacturing OH                     ₱4/DLH      
 Fixed manufacturing overhead               ₱20/DLH    
 Direct labor hours                                    6 min/unit       

Actual

 Units produced                                       38,000
 Variable manufacturing OH                    ₱16,400     
 Fixed manufacturing overhead               ₱88,000     
 Direct labor hours                                   4,200 hr

What is the volume variance?

4,000 F
4,000 U
8,000 F
8,000 U
Incorrect
0/1 Points
52.The following data relate to direct labor costs for the current period:
Standard cost                               10,000 hours at ₱20
Actual costs                                   9,800 hours at ₱19.50
What was the direct labor efficiency variance?

3,600 U
3,600 F
4,000 U
4,000 F
Correct
1/1 Points
53.A primary purpose of using a standard cost system is
to make things easier for managers in the production facility.
to provide a distinct measure of cost control.
to minimize the cost per unit of production.
b and c are correct
Correct
1/1 Points
54.Which of the following variances is least helpful for control purposes?
Material efficiency variance
Variable overhead controllable variance
Production volume variance
Labor rate variance
Correct
1/1 Points
55.Dover Corporation's production cycle starts in the Mixing Department. The
following information is available for April:
·        Work in process, April 1 (50% complete) – 40,000 Units
·        Started in April – 240,000 Units
·        Work in process, April 30 (60% complete) – 25,000 Units
Materials are added at the beginning of the process in the Mixing Department.
Using the average cost method, what are the equivalent units of production of
conversion cost for the month of April?
 275,000
280,000
305,000
270,000
Incorrect
0/1 Points
56.The FIFO method of process costing differs from the average cost method of
process costing in that FIFO:
allocates costs based on whole units, but the average cost method uses equivalent units
considers the stage of completion of beginning work in process in computing equivalent units of
production, but the average cost method does not
does not consider the stage of completion of beginning work in process in computing
equivalent units of production, but the average cost method does
is applicable only to those companies using the FIFO inventory pricing method, but the average
cost method may be used with any inventory pricing methodThe first-in, first-out method of process
costing will produce the same cost of goods manufactured amount as the average cost method
when:
Correct
1/1 Points
57.LMN Company Co. uses a FIFO process costing system. The company had
5,000 units that were 60% complete as to conversion costs at the beginning of
the month. The company started 22,000 units this period and had 7,000 units in
ending Work in Process inventory that were 35% complete as to conversion costs.
What are the equivalent units for materials, if materials are added at the
beginning of the process?
18,000
20,000
22,000
27,000
Correct
1/1 Points
58.Which of the following is a purpose of standard costing?
To replace budgets and budgeting.
To simplify costing procedures and expedite cost reports.
 To eliminate under/over applied FOH at the end of the period.
To use them as a basis for product costing for external reporting purposes.
Correct
1/1 Points
59.What type of direct material variances for price and efficiency result if actual
number of pounds of material used exceeds overhead pounds allowed but actual
cost per pound was less than standard cost per pound?
Efficiency – Favorable; Price – Favorable
Efficiency – Favorable; Price – Unfavorable
Efficiency – Unfavorable; Price – Favorable
Efficiency – Unfavorable; Price – Unfavorable
Incorrect
0/1 Points
60.Marie’s operations for April disclosed the following data relating to direct
labor:
Actual cost                                                           ₱10,000
Rate variance (favorable)                                        1,000
Efficiency variance (unfavorable)                           1,500
Standard cost                                                         ₱9,500
Actual direct labor hours for April amounted to 2,000. What was the standard
direct labor hourly rate?

5.50
5.00
4.75
4.50
Correct
1/1 Points
61.In its reports to management, a company disclosed the presence of a fixed
spending variance.  The procedure used to analyze variances was the:
four-variance method
mix and yield variances method
two-variance method
alternative three-variance method
Correct
1/1 Points
62.If a company follows the practice of isolating variances at the earliest point in
time, what would be the appropriate time to isolate and recognize a direct
material price variance?
When a material is issued to the requesting department or division.
When material is purchased.
When material is used in production.
When a purchase order is originated.
Incorrect
0/1 Points
63.The direct labor standards for producing a unit of a product are two hours at
P10 per hour.  Budgeted production was 1,000 units.  Actual production was 900
units, and direct labor cost was P19,000 for 2,000 direct labor hours.  The direct
labor efficiency variance was:
P1,000 favorable
P1,000 unfavorable
P2,000 favorable
P2,000 unfavorable
Correct
1/1 Points
64.Assuming that there was no beginning in process inventory and the ending
work in process inventory is 100% complete as to material costs, the number of
equivalent units as to materials costs would be
The same as units placed in process
The same as the units completed
Less than the units placed in process
Less than the units completed
Correct
1/1 Points
65.AE Company uses a standard cost system. The following information pertains
to direct labor for production B for the month of October:
Standard hours allowed for actual production                 2,000
Actual rate per hour                                                         ₱8.40
Standard rate per hour                                                     ₱8.00
Labor efficiency variance                                                  ₱1,600 debit
What were the actual hours worked?

1,800
1,810
2,190
2,200
Correct
1/1 Points
66.ABC's budgeted fixed FOH cost is P50,000 per month plus a variable FOH rate
of P4 per direct labor hour. The standard direct labor hours allowed for October
production was 18,000. An analysis of the FOH indicates that in October, ABC had
an unfavorable budget (controllable) variance of P1.000 and an unfavorable
volume variance of P500. ABC uses a two-way analysis of FOH variance. What is
the actual FOH measured in October?

121,000
122,000
122,300
123,000
Incorrect
0/1 Points
67.Information on ABC Corp. direct materials cost is as follows:
Actual units of Direct materials used                                 20,000
Actual direct material costs                                             ₱40,000
Standard price per unit of direct materials                            2.10
Direct material quantity variance, favorable                     ₱3,000
What was the ABC’s materials price variance?

1,000 F
1,000 U
2,000 F
2,000 U
Correct
1/1 Points
68.In accounting for beginning inventory costs, the method that allows the
addition of beginning inventory costs with costs incurred during the period is
referred to as:

first-in, first-out
addition
last-in, first-out
average
Correct
1/1 Points
69.A purpose of standard costing is to:
allocate cost with more accuracy
eliminate the need for subjective decisions by management
determine the "break-even" production level
control costs
Correct
1/1 Points
70.LMN Company Co. uses a FIFO process costing system. The company had
5,000 units that were 60% complete as to conversion costs at the beginning of
the month. The company started 22,000 units this period and had 7,000 units in
ending Work in Process inventory that were 35% complete as to conversion costs.
What are the equivalent units for labor and overhead?

18,000
20,000
19,450
27,000
Incorrect
0/1 Points
71.Emote Inc. purchased 80,000 ounces of materials needed to produce its
perfume at a cost of ₱5 per ounce. During April, Emote used 70,000 ounces to
produce 3,500 bottles of perfume. The standard price of the materials used is
₱4.75 per ounce and Emote expects to use 15 ounces of the material to produce
1 bottle of perfume. How much is the (1) material price variance and (2) material
quantity variance, respectively?

20,000 U; 83,125 U
20,000 F; 130,625 U
20,000 U; 130,625 F
17,500 U; 83,125 U
Incorrect
0/1 Points
72.Chartreuse Inc.'s capacity for a month is 38,000 machine hours. Overhead is
40% variable and 60% fixed. During October 2030, Chartreuse inc. produced
4,300 units of its product and incurred 39,200 machine hours. Each unit of a
product requires 11 machine hours. Favorable volume variance for the month of
October is ₱18,000. What Is the company's total predetermined overhead rate?

3.00
4.00
5.00
7.50
Correct
1/1 Points
73.Which of the following characteristics applies in process costing but not to job
order costing?
Identifiable batches of production
Equivalent units of production
Averaging process
Use of standard cost
Correct
1/1 Points
74.If raw materials are carried in the raw materials inventory at standard costs,
then it is reasonable to assume that
The price variance is recognized when materials are purchased
The price variance is recognized when materials are placed into production
The company does not follow generally accepted accounting principles
 The raw materials inventory account is overvalued
Correct
1/1 Points
75.Using the following symbols, which formula represents the calculation of the
labor rate variance?
AH = Actual hours
SH = Standard hours allowed for actual production
AR = Actual rate
SR = Standard rate

SR(AH - SH)
AR(AH - SH)
AH(AR - SR)
SH(AR - SR)
Correct
1/1 Points
76.Of the following variances, the one that is most useful in assessing the
performance of the Purchasing Department is the:
idle capacity variance
overhead price variance
materials purchase price variance
materials price usage variance
Correct
1/1 Points
77.In a standard cost system, the materials price variance is obtained by
multiplying the
Actual price by the difference between the actual quantity purchased and standard quantity
used.
Actual quantity purchased by the difference between the actual price and standard price.
Standard price by the difference between standard quantity purchased and standard quantity
used.
Standard quantity purchased by the difference actual price and standard price.
Correct
1/1 Points
78.Assuming that there was no beginning work in process inventory and the
ending work in process inventory is 50% complete as to conversion costs, the
number of equivalent units as to conversion costs would be:
less than the units completed
more than the units completed
less than the units placed in process
the same as the units completed
Correct
1/1 Points
79.DEF Corporation manufactures tables with glass tops. The standard material
cost of the glass used per table is ₱7.80 based on six square feet of vinyl at a cost
of ₱1.30 per square foot. A production run of 1,000 tables in 2020 resulted to
usage of 6,400 sq. ft. of vinyl at a cost of ₱1.20 per sq. ft. a total cost of ₱7,680.
What was the material usage variance from the above production run?

120 F
480 U
520 U
640 F
Correct
1/1 Points
80.What does a credit balance in a direct labor efficiency variance account
indicate?
The average wage rate paid to direct labor employees was less than the standard rate
The standard hours allowed for the units produced were greater than actual direct labor hours
used.
Actual total direct labor costs incurred were less than standard direct labor costs allowed for the
units produced
The number of units produced was less than the number of units budgeted for the period.
Correct
1/1 Points
81.Which department is customarily held responsible for a material usage
variance?
Quality control
 Purchasing
Engineering
Production
Incorrect
0/1 Points
82.In order to compute equivalent units of production using the FIFO method of
process costing, work for the period must be broken down to units:

started and completed during the period

completed during the period and units in ending inventory
completed from beginning inventory, started and completed during the month, and units in
ending inventory
started during the period and units transferred out during the period
Incorrect
0/1 Points
83.Standard costing will produce the same results as actual or conventional
costing when standard costs variances are allocated to
Cost of goods sold and inventories
A balance sheet account
An income and expense account
None of the above
Correct
1/1 Points
84.The main difference between FIFO and weighted average methods of process
costing is
In the treatment of beginning Work in Process inventory.
In the treatment of current period production costs.
In the treatment of lost units.
In the treatment of ending Work in Process inventory.
Correct
1/1 Points
85.Information on ABC's FOH costs of the January 2020 production activity is as
follows:
Budgeted fixed FOH                                                                    ₱75,000
Standard fixed FOH rate per DL hr.                                                     ₱3
Standard variable FOH rate per DL hr.                                                ₱6
Standard direct labor hours allowed for actual production             24,000
Actual total FOH                                                                          220,000
ABC has a standard absorption and a flexible budget system and uses the two
variance method for FOH variances. What is the volume variance for January
2020?

3,000 U
3,000 F
4,000 U
4,000 F
Incorrect
0/1 Points
86.Which variance is most likely affected by buying a more expensive material
that produces less waste and is easier to handle?
Labor rate variance.
Direct labor efficiency variance.
Variable FOH spending variance.
Fixed FOH budget variance.
Incorrect
0/1 Points
87.TM Company’s capacity for a month is 40,000 machine hours. Overhead is
40% variable and 60% fixed. During October 20x1, TM Company produced 3,500
units of its product and incurred 38,000 machine hours. Each unit of a product
requires 12 machine hours. Unfavorable non-controllable variance for the month
of October is ₱28,500. What is the company’s variable overhead rate?

9.50
14.25
19.75
23.75
Correct
1/1 Points
88.Standard costs are used for all of the following except:
 income determination
controlling costs
measuring efficiencies
forming a basis for price setting
Correct
1/1 Points
89.In analyzing factory overhead variances, the volume variance is the difference
between the:
actual amount spent for overhead items during the period and the amount applied during the
period
variable efficiency variance and fixed efficiency variance
amount shown in the flexible budget and the amount shown in the master budget
budget allowance based on standard hours allowed for actual production for the period and the
amount of applied factory overhead during the period
Correct
1/1 Points
90.The average and FIFO process costing methods differ in that the average
method:
can be used under any cost flow assumption
is much more difficult to apply than the FIFO method
requires that ending work in process inventory be stated in terms of equivalent units of
production
does not consider the degree of completion of beginning work in process inventory when
computing equivalent units of production
Correct
1/1 Points
91.Dover Corporation's production cycle starts in the Mixing Department. The
following information is available for April:
·        Work in process, April 1 (50% complete) – 40,000 Units
·        Started in April – 240,000 Units
·        Work in process, April 30 (60% complete) – 25,000 Units
Materials are added at the beginning of the process in the Mixing Department.
Using the average cost method, what are the equivalent units of production of
materials for the month of April?
275,000
 280,000
305,000
270,000
Correct
1/1 Points
92.The first-in, first-out method of process costing will produce the same cost of
goods manufactured amount as the average cost method when:

there is no beginning inventory

there is no ending inventory
beginning and ending inventories are each 50% complete
beginning inventories are 100% complete as to materialsIn order to compute equivalent units of
production using the FIFO method of process costing, work for the period must be broken down to
units:
Incorrect
0/1 Points
93.In a FIFO process costing system, which of the following are assumed to be
completed first in the current period?
Units started this period.
Units started last period.
Units transferred out.
Units still in process.
Incorrect
0/1 Points
94.LMN Company Co. uses a FIFO process costing system. The company had
5,000 units that were 60% incomplete as to conversion costs at the beginning of
the month. The company started 22,000 units this period and had 7,000 units in
ending Work in Process inventory that were 35% complete as to conversion costs.
What are the equivalent units for labor and overhead?

18,000
20,000
19,450
20,450
Correct
1/1 Points
95.A Manufacturer of radios purchases components from subcontractors for
assembly into complete radios. Each radio requires three units each of part X,
which has a standard cost of ₱2.90 per unit. During June, the company had the
following experience with respect to part X:
Purchases (₱36,000)                               12,000 units
Consumed in manufacturing                   10,000 units
Radio manufactured                                  3,000
During June, the company incurred a material purchase efficiency variance of

2,900 U
2,900 F
8,700 U
8,700 F
Correct
1/1 Points
96.In the computation of manufacturing cost per equivalent unit, the weighted
average method of process costing considers
Current costs only
Current cost plus cost of ending work in process inventory
Current cost plus cost of beginning work in process inventory
Current cost less cost of beginning work in process inventory
Correct
1/1 Points
97.Under the two-variance method for analyzing factory overhead, the
controllable (budget) variance is the difference between the:

actual fixed factory overhead and the budgeted fixed overhead

budget allowance based on standard hours allowed and the factory overhead applied to
production
budget allowance based on standard hours allowed and the budget allowance based on actual
hours worked
actual factory overhead and the budget allowance based on standard hours allowed
Correct
1/1 Points
98.Read, Inc. instituted a new process in October. During October, 10,000 units
were started in Department A. Of the units started, 7,000 were transferred to
Department B, and 3,000 remained in work in process at October 31. The work in
process at October 31 was 100% complete as to material costs and 50%
complete as to conversion costs. Materials costs of P27,000 and conversion costs
of P39,950 were charged to Department A in October. What were the total costs
transferred to Department B?

P46,900
P53,600
P51,800
P57,120
Incorrect
0/1 Points
99.LMN Company Co. uses a FIFO process costing system. The company had
5,000 units that were 60% complete as to conversion costs at the beginning of
the month. The company started 22,000 units this period and had 7,000 units in
ending Work in Process inventory that were 35% complete as to conversion costs.
What are the equivalent units for materials, if materials are added at the end of
the process?

18,000
20,000
22,000
27,000
Correct
1/1 Points
100. Materials usage variances are normally chargeable to the:

Production Department
Purchasing Department
Finished Goods Department
Materials Storage Department