Ch10_Standard_costing

Ch10_Standard_costing - 1. Ideal standards do not allow for...

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Unformatted text preview: 1. Ideal standards do not allow for machine breakdowns and other normal inefficiencies. Ans: True AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 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. Ans: True AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 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. Ans: True AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 1 Level: Easy 4. In developing a direct material price standard, the expected freight cost on the materials should be included. Ans: True AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 1 Level: Easy 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. Ans: True AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2 Level: Easy 6. Waste on the production line will result in a materials price variance. Ans: False AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2 Level: Medium 7. It is best to isolate the material quantity variance when the materials are purchased. Ans: False AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 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. Ans: False AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2 Level: Easy 9. If improvement in a performance measure on a balanced scorecard should lead to improvement in another performance measure, but does not, then employees must work harder. Ans: False AACSB: Analytic AICPA BB: Critical Thinking; Resource Management AICPA FN: Reporting LO: 5 Level: Medium 10. A manufacturing cycle efficiency (MCE) of greater than one is impossible. Ans: True AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 6 Level: Medium 11. Inspection Time is generally considered to be value-added time. Ans: False AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 6 Level: Easy 12. A manager would generally like to see a trend indicating an increase in setup time. Ans: False AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting LO: 6 Level: Easy 13. A manufacturing cycle efficiency (MCE) of 0.3 means that 70% of throughput time is spent on non-value-added activities....
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Ch10_Standard_costing - 1. Ideal standards do not allow for...

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