Accounting Final R

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ACC 256 - Review for Final

Comprehensive Multiple Choice

1. If a company follows a practice of isolating variances at the earliest point in time, what would be the appropriate time to isolate and recognize a direct material price variance? A. When material is issued. B. When material is purchased. C. When material is used in production. D. When production is completed.

2. Which of the following is the most probable reason a company would experience an unfavorable labor rate variance and a favorable labor efficiency variance? A. The mix of workers assigned to the particular job was heavily weighted towards the use of higher paid, experienced individuals. B. The mix of workers assigned to the particular job was heavily weighted towards the use of new relatively low paid, unskilled workers. C. Because of the production schedule, workers from other production areas were assigned to assist this particular process.
D. Defective materials caused more labor to be used in order to produce a standard unit.

3. The Reedy Company uses a standard costing system. The following data are available for November: Actual direct labor hours worked | 5,800 hours | Standard direct labor rate | $9 per hour | Labor rate variance | $1,160 favorable |
The actual direct labor rate for November is:
A. $9.20
B. $8.80
C. $8.90
D. $9.00

Use the following information for questions 4 & 5. Barrick Company has established a flexible budget for manufacturing overhead based on direct labor-hours. Total budgeted costs at 200,000 direct labor-hours are as follows:

Variable costs (total): | | Packing supplies | $120,000 | Indirect labor | $180,000 | Fixed costs (total): | | Utilities | $100,000 | Rent | $ 40,000 | Insurance | $ 20,000 |

4. At an activity level of 170,000 direct labor-hours, the…...

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