KA2e_SelfStudy_Ch22

KA2e_SelfStudy_Ch22 -...

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File: ch22, Chapter 22: Standard Costs and Balanced Scorecard Multiple Choice 1. Standards differ from budgets in that: a) budgets but not standards may be used in valuing inventories. b) budgets but not standards may be journalized and posted. c) budgets are a total amount and standards are a unit amount. d) only budgets contribute to management planning and control. Ans: c Response A: Standards, not budgets may be used in valuing inventories. Response B: Standards, not budgets may be journalized and posted. Response C: Correct! Budgets are expressed in total amounts and standards are expressed in unit amounts. Response D: Both budgets and standards contribute to management planning and control. 2. The advantages of standard costs include all of the following except: a) management by exception may be used. b) management planning is facilitated. c) they may simplify the costing of inventories. d) management must use a static budget. Ans: d Response A: This is an advantage of using standard costs. Response B: This is an advantage of using standard costs. Response C: This is an advantage of using standard costs. Response D: Correct! Management uses a flexible budget, not a static budget when using standard costs. 3. The setting of standards is: a) a managerial accounting decision. b) a management decision. c) a worker decision. d) preferably set at the ideal level of performance. Ans: b Response A: Setting standards requires input from managerial accountants, but the final decision is made by management. Response B: Correct! Standards are set by management. Response C: Setting standards may require input from workers, but the final decision is made by management. Response D: Setting standards at the ideal level of performance is uncommon because of the perceived negative effect on worker morale. 4. Each of the following formulas is correct except: a) Labor price variance = (Actual hours X EA ctual rate) - (Actual hours X âS tandard rate). b)
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This note was uploaded on 04/22/2009 for the course BCOR 2000 taught by Professor Brush during the Spring '07 term at Colorado.

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KA2e_SelfStudy_Ch22 -...

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