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Standard v budget, optimum levels, variances, WIP

Question 1

Consider the following statements.

Statement A: A standard is a unit amount.
Statement B: A budget is a total amount.

Option 1: Statement A is true and Statement B is false
Option 2: Statement A is false and Statement B is true
Option 3: Both Statements A and B are true
Option 4: Both Statements A and B are false

Question 2

___________ contribute to management control by providing basis for evaluation of cost control.

Option 1: Standard costs
Option 2: Budget

Question 3

Which of the following standards represent optimum levels of performance under perfect operating conditions?

Option 1: Ideal standard
Option 2: Normal standard

Question 4

The following options are the causes of which of the given variances?
 paying workers higher wages than expected.
 Misallocation of workers.

Option 1: Labor price variance
Option 2: Direct Labor variance
Option 3: Material variance

Question 5

Which of the following costs are applied to work in process on the basis of the standard hours allowed for the work done?

Option 1: Fixed costs
Option 2: Manufacturing overhead costs
Option 3: Variable costs

Question 6

Which of the following types of incremental analysis assumes that sales of products in other markets are not affected by special order?

Option 1: Accept an order at a special price
Option 2: Sell or process further
Option 3: Allocate limited resources

Question 7

Which of the following options is defined as difference between actual overhead costs and overhead costs applied to work done?

Option 1: Total Overhead Variance
Option 2: Manufacturing overhead Variance
Option 3: Material Variance

Question 8

Eliminate an Unprofitable Segment does not include which of the following options?

Option 1: It focus on relevant costs profit entities.
Option 2: It considers effect on related product lines.
Option 3: It obtains additional business by making a major price concession to a specific customer.

Question 9

Which of the following techniques is based directly on accounting data?

Identify the correct option to fill in the given blank.

Option 1: Cash Payback
Option 2: Annual Rate of Return
Option 3: Discounted Cash Flow

Question 10

Consider the following statements.

Statement A: Financial information includes revenues and costs as well as their effect on overall profitability.
Statement B: Non-financial information includes effect on employee turnover, the environment, or overall company image.

Option 1: Statement A is true and Statement B is false
Option 2: Statement A is false and Statement B is true
Option 3: Both Statements A and B are true
Option 4: Both Statements A and B are false

Solution Preview

Question 1

Consider the following statements.

Statement A: A standard is a unit amount.
Statement B: A budget is a total amount.

Both can be per unit and total amount.

Option 4: Both Statements A and B are false

Question 2

___________ contribute to management control by providing basis for evaluation of cost control.

Option 1: Standard costs
It provides benchmarks for comparison

Question 3

Which of the following standards represent optimum levels of performance under perfect operating ...

Solution Summary

The response discusses the Standard versus budget, optimum levels, variances, work in progress, overhead costs.

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