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Chapter 10 Part 1

The document consists of multiple-choice questions (MCQs) related to materials price and quantity variances in cost accounting. It covers concepts such as favorable and unfavorable variances, the calculation of standard cost variances, and the responsibilities of different departments regarding these variances. Additionally, it includes practical examples and calculations for specific companies' material costs and variances.

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8 views

Chapter 10 Part 1

The document consists of multiple-choice questions (MCQs) related to materials price and quantity variances in cost accounting. It covers concepts such as favorable and unfavorable variances, the calculation of standard cost variances, and the responsibilities of different departments regarding these variances. Additionally, it includes practical examples and calculations for specific companies' material costs and variances.

Uploaded by

202101692
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Section 1

MCQ:

1- A materials price variance is favorable if the actual price exceeds the


standard price.
A. True
B. False

2. An unfavorable materials quantity variance occurs when the actual quantity used
in production is less than the standard quantity allowed for the actual output of the
period.
A. True
B. False

3. When computing standard cost variances, the difference between actual and
standard price multiplied by actual quantity yields a(n):
A) combined price and quantity variance.
B) efficiency variance.
C) price variance.
D) quantity variance.
4. The standard price per unit of materials is used in the calculation of which of the
following variances?
Materials price variance Materials Quantity variance
A) No No
B) No Yes
C) Yes No
D) Yes Yes
5. Which of the following would produce a materials price variance?
A) an excess quantity of materials used.
B) an excess number of direct labor-hours worked in completing a job.
C) shipping materials to the plant by air freight rather than by truck.
D) breakage of materials in production.

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6. The variance that is most useful in assessing the performance of the purchasing
department manager is:
A) the materials quantity variance.
B) the materials price variance.
C) the labor rate variance.
D) the labor efficiency variance
7.The production department should generally be responsible for material price
variances that resulted from:
A. purchases made in uneconomical lot-sizes.
B. rush orders arising from poor scheduling.
C. purchase of the wrong grade of materials.
D. changes in the market prices of raw materials.

F-F – C-D- C- B-B-

8.Information on Rex Co.'s direct material costs for May follows:

Actual quantity of direct materials purchased and used. 30,000 pounds


Actual cost of direct materials........................................ $84,000
Unfavorable direct materials quantity variance.............. $3,000
Standard quantity of direct materials allowed for May
production.................................................................... 29,000 pounds

For the month of May, what was Rex's direct materials price variance?

9. Buckler Company manufactures desks with vinyl tops. The standard material
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cost for the vinyl used per Model S desk is $27.00 based on 12 square feet of
vinyl at a cost of $2.25 per square foot. A production run of 1,000 desks in
March resulted in usage of 12,600 square feet of vinyl at a cost of $2.00 per
square foot, a total cost of $25,200. The materials quantity variance
resulting from the above production run was:

$1,350 unfavorable

10. Magno Cereal Corporation uses a standard cost system to collect costs related
to the production of its “crunchy pickle” cereal. The pickle (materials)
standards for each batch of cereal produced are 1.4 pounds of pickles at a
standard cost of $3.00 per pound. During the month of August, Magno
purchased 78,000 pounds of pounds at a total cost of $253,500. Magno used
all of these pickles to produce 60,000 batches of cereal. What is Magno's
materials quantity variance for the month of August?

$18,000 favorable

11. The standards for direct materials in making a certain product are 20 pounds at
$0.75 per pound. During the past period, 56,000 units of product were made
and the material quantity variance was $30,000 U. The number of pounds
of direct material used during the period amounted to:
1,160,000

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