chap008(3) - Chapter 008, Standard Costs True / False...

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Unformatted text preview: Chapter 008, Standard Costs True / False Questions 1. Ideal standards do not allow for machine breakdowns and other normal inefficiencies. TRUE AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting Learning Objective: 1 Level: Easy 2. The standard price per unit for direct materials should reflect the final, delivered cost of the materials, net of any discounts taken. TRUE AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting Learning Objective: 1 Level: Easy 3. The standard quantity or standard hours allowed refers to the amount of the input that should have been used to produce the actual output of the period. TRUE AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting Learning Objective: 1 Level: Easy 4. In developing a direct material price standard, the expected freight cost on the materials should be included. TRUE AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting Learning Objective: 1 Level: Easy 8-1 Chapter 008, Standard Costs 5. Material price variances are often isolated at the time materials are purchased, rather than when they are placed into production, to facilitate earlier recognition of variances. TRUE AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting Learning Objective: 2 Level: Easy 6. Waste on the production line will result in a materials price variance. FALSE AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting Learning Objective: 2 Level: Medium 7. It is best to isolate the material quantity variance when the materials are purchased. FALSE AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting Learning Objective: 2 Level: Hard 8. When the material price variance is recorded at the time of purchase, raw materials are recorded as inventory at actual cost. FALSE AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting Learning Objective: 2 Level: Easy 8-2 Chapter 008, Standard Costs 9. (Appendix) If standard costs exceed actual costs, a credit entry would be made in the appropriate variance account to record the variance. TRUE AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting Learning Objective: 5 Level: Medium 10. (Appendix) If a favorable variance is recorded in the accounting records, it will be recorded as a credit. TRUE AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting Learning Objective: 5 Level: Easy 8-3 Chapter 008, Standard Costs Multiple Choice Questions 11. To measure controllable production inefficiencies, which of the following is the best basis for a company to use in establishing the standard hours allowed for the output of one unit of product?...
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chap008(3) - Chapter 008, Standard Costs True / False...

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