Accounting_203_Chapter_8_Test

Accounting_203_Chapter_8_Test - ACCOUNTING 203 Chapter 8...

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ACCOUNTING 203 Chapter 8 Practice Test True and False Questions 1. Standards are set for units; budgets are expressed in total dollars. 2. The standard quantity per unit for direct materials should not include an allowance for waste, spoilage and other inefficiencies. 3. Ideal standards should be used for forecasting and planning. 4. In general, the purchasing agent is responsible for the material price variance. 5. When more hours of labor time are necessary to complete a job than the standard allows, the labor rate variance is unfavorable. Multiple Choice Questions 6. An unfavorable material quantity variance indicates that: A) actual usage of material exceeds the standard material allowed for output. B) standard material allowed for output exceeds the actual usage of material. C) actual material price exceeds standard price. D) standard material price exceeds actual price. 7. The materials price variance should be computed: A) when materials are purchased. B) when materials are used in production. C) based upon the amount of materials used in production when only a portion of materials purchased is actually used. D) based upon the difference between the actual quantity of inputs and the standard quantity allowed for output times the standard price. 8. Which department should usually be held responsible for an unfavorable material usage variance would most likely result from: A) labor efficiency problems. B)
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This note was uploaded on 05/17/2011 for the course ACCT 203 taught by Professor Mac during the Spring '11 term at Chicago State.

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Accounting_203_Chapter_8_Test - ACCOUNTING 203 Chapter 8...

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