Unit 7 - Practice for Review

Unit 7 - Practice for Review - Unit 7: Performance...

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Unit 7: Performance Evaluation Using Variances from Standard Costs - Practice for Review
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1. The difference between the standard cost of a product and its actual cost is called a variance. (Points: 1) True False 2. Standards are performance goals used to evaluate and control operations. (Points: 1) True False 3. Standards are set for only direct labor and direct materials. (Points: 1) True False 4. Principle of exceptions allows managers to focus on correcting variances between standard costs and actual costs. (Points: 1) True False 5. Because accountants have financial expertise, they are the only ones that are able to set standard costs for the production area. (Points: 1) True False 6. While setting standards, managers should never allow for spoilage or machine breakdowns in their calculations. (Points: 1) True False 7. A budget performance report compares actual results with the budgeted amounts and reports differences for possible investigation. (Points: 1) True False 8. A favorable cost variance occurs when actual cost is less than budgeted cost at actual volumes. (Points: 1)
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This note was uploaded on 10/05/2010 for the course ACCOUNTING n/a taught by Professor N/a during the Summer '09 term at Kaplan University.

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Unit 7 - Practice for Review - Unit 7: Performance...

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