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Exam 29: Controlling Manufacturing Costs: Standard Costs

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Question 31

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A budget performance report compares actual costs for a period with the budgeted costs for that period.

A) True
B) False

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Question 32

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The cost of utilities consumed in the factory is a good example of

A) a variable cost.
B) a fixed cost.
C) a semi-variable cost.
D) a standard cost.

E) A) and D)
F) B) and C)

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Question 33

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The manufacturing cost budget will include both variable and fixed manufacturing costs.

As the level of activity increases,the total fixed costs for the period

The purchasing department can determine the standard quantity per unit of each type of raw material required to manufacture a product.

Petersen Company produces a single product with the following production and average cost data: The best estimate of the monthly fixed cost is:

Weaver Corporation has a three-year contract with a security firm that sets hourly wage rates for the firm at $10 per hour.At 7,000 units of output,factory security costs were $14,000.With an expected increase in production next year to a level of 10,000 units,the anticipated security costs are expected to remain the same.The security costs are an example of fixed factory costs.

A flexible budget that is prepared based on the actual activity level achieved in a period provides a more precise measure of efficiency and control when evaluating actual costs.

As the level of activity increases,the fixed cost per unit of activity

A material usage variance is calculated as:

A price variance for an item is the difference between its actual price and its standard price multiplied by the standard quantity.

Better Blankets,Inc.makes a SnuggieBlank using flannel material and trim binding.They have instituted a successful JIT system and thus no longer have to stock inventory prior to their production need.The Standard Cost Card for The SnuggieBlank model is shown. The company reported the following results concerning January results: The material price variance for Flannel used in January is:

Regression analysis is a more sophisticated technique than the high-low method,and often leads to higher confidence in the projected costs.

The price variance for an item is the difference between its actual price and its standard price,multiplied by the ____________________ quantity.

Budgeting for manufacturing overhead is the simplest of total product costs to compute as its cost behavior is fixed.

A fixed budget is one that shows only one level of activity.

Better Blankets,Inc.makes a SnuggieBlank using flannel material and trim binding.They have instituted a successful JIT system and thus no longer have to stock inventory prior to their production need.The Standard Cost Card for The SnuggieBlank model is shown. The company reported the following results concerning January results: The material quantity variance for Trim used in January is:

Reelmates manufactures fishing poles.In a recent month,the company budgeted production of 2,000 poles.Actual production was 2,200.According to the standard cost card,each pole requires 3 feet of fiberglass rod at a cost of $9 per foot.Reelmates used 6,500 feet of rod at a net cost of $65,000 for the period. The material usage variance was:

The salary of the factory supervisor is a good example of

Efficiency and cost control can be evaluated by comparing actual overhead costs with the budget for the actual level of operations with the