Purchase of poor quality materials will generally result in a favorable materials price variance and an unfavorable labor rate variance.
True
False
10 points
QUESTION 2
Usually the production manager is usually held responsible for the labor efficiency variance.
True
False
10 points
QUESTION 3
An investment center is any responsibility center in an organization that controls cost and revenues and invested funds.
True
False
10 points
QUESTION 4
A profit center is any responsibility center in an organization that controls cost.
True
False
10 points
QUESTION 5
A favorable materials price variance coupled with an unfavorable material usage variance would most likely result from the purchase and use of lower than standard quality material.
True
False
10 points
QUESTION 6
A favorable labor rate variance indicates that the standard rate exceeds the actual rate.
True
False
10 points
QUESTION 7
The general model (formula) for calculating a quantity variance is: standard price x (actual quantity of inputs used – standard quantity allowed for output)
True
False
10 points
QUESTION 8
Discover Motor Company uses a standard cost system to collect costs related to the production of its toothpick motors. The direct labor standard for each toothpick motor is 1.25 hours at a standard cost of $9.50 per hour.
During the month of May, Discover’s toothpick motor production used 5,900 direct labor-hours at a total direct labor cost of $54,575. This resulted in production of 4,800 toothpick motors for May. What is Discover’s labor efficiency variance for the month of May?
|
$950 favorable |
|
|
$1,475 favorable |
|
|
$20,000 favorable |
10 points
