Site MapHelpFeedbackTrue or False
True or False
(See related pages)

1
A standard cost is a budget for the production of one unit of product or service.
A)True
B)False
2
Any difference between actual costs and budgeted or standard costs is called a cost variance.
A)True
B)False
3
The concept of management by exception is based on the notion that recurring variances or variances with relative magnitude (significance) should be investigated first, before lesser exceptions.
A)True
B)False
4
Using task analysis to set standards shifts the emphasis from historical costs (what costs were) to determining what costs should be.
A)True
B)False
5
Based on the relevance of historical cost data in setting cost standards, the managerial accountant should rely heavily using them.
A)True
B)False
6
Task analysis sets standards by analyzing the production process.
A)True
B)False
7
Managerial accountants usually rely on either an analysis of historical data for setting cost standards or the task analysis for setting cost standards, but seldom use both.
A)True
B)False
8
When a firm uses perfection standards, the variances for direct materials and direct labor will most likely always be favorable.
A)True
B)False
9
Another term for perfection standard is ideal standard
A)True
B)False
10
The cost expected under normal operating conditions is called an ideal standard.
A)True
B)False
11
Most behavioral theorists believe that perfection standards encourage more positive and productive employee attitudes than do practical standards.
A)True
B)False
12
The direct-material price variance may be determined by multiplying the difference between the actual unit price and the standard unit price times the number of units purchased.
A)True
B)False
13
The standard direct-material quantity is the total amount of direct material normally required to produce a finished product.
A)True
B)False
14
The standard direct-labor rate excludes fringe benefits.
A)True
B)False
15
The direct-material price variance occurs at the time the direct materials are issued to work-in-process.
A)True
B)False
16
If the standard quantity allowed is 26,000 units of material, the standard price is $4.50 per unit, and the direct-material quantity variance is an unfavorable variance of $900, then the actual quantity used is 26,200 units.
A)True
B)False
17
If the quantity of material purchased is 15,000 units, the actual price is $3.40, and the direct-materials price variance is a favorable variance of $1,500, then the standard price is $3.30.
A)True
B)False
18
The formula of AH(AR - SR) yields the direct-labor rate variance.
A)True
B)False
19
When the direct-labor efficiency variance is unfavorable, the standard rate for direct labor was exceeded.
A)True
B)False
20
The formula of PQ(AP - SP) yields the purchase price variance.
A)True
B)False
21
The formula of SR(AH - SH) yields the direct-labor rate variance.
A)True
B)False
22
When the direct-labor rate variance is unfavorable, the direct-labor efficiency variance will be unfavorable.
A)True
B)False
23
If the total direct-labor variance is an unfavorable variance of $2,000 and the direct-labor rate variance is a favorable variance of $400, then the direct-labor efficiency variance must be an unfavorable variance of $2,400.
A)True
B)False
24
When a company budgets 60,000 units of output, but achieves 58,000 units of output the variances should be measured against the standards of the 60,000-unit output level.
A)True
B)False
25
If 500 board-feet of oak is required to complete good output of 23 wood desks, each of which contains 20 board feet of oak, the standard materials allowed for good output of 36 desks is 804 board-feet of oak.
A)True
B)False
26
One of several methods of determining the significance of cost variances is the recurrence of the variance.
A)True
B)False
27
One of several methods of determining the significance of cost variances is the size of the variance.
A)True
B)False
28
The extent to which managers are able to control or influence a cost or cost variance is called controllability.
A)True
B)False
29
It is less important to investigate a significant favorable variance than a significant unfavorable variance.
A)True
B)False
30
A decision whether to investigate a cost variance is a cost-benefit decision.
A)True
B)False
31
A statistical control chart is used to determine which variances warrant investigation.
A)True
B)False
32
A direct-material price variance is most influenced by the production supervisor.
A)True
B)False
33
The production supervisor is usually most responsible for the direct-labor rate variance and the direct-labor efficiency variance.
A)True
B)False
34
Production engineers may be partially responsible for material quantity variances.
A)True
B)False
35
A direct-materials quantity variance may be related to the direct-labor efficiency variance.
A)True
B)False
36
If the quality of the final product is acceptable, the purchasing manager should continue to purchase the off-standard materials.
A)True
B)False
37
A significant unfavorable cost variance is always not in the best interest of the organization.
A)True
B)False
38
A costing system in which variances are computed and production costs are entered into Work-in-Process Inventory at their standard amounts is called a standard-costing system.
A)True
B)False
39
In an actual-costing or normal-costing system, the actual costs of direct materials and direct labor are charged to the Work-in-Process Inventory.
A)True
B)False
40
Providing a means to motivate employees is one advantage of standard costing.
A)True
B)False
41
A standard costing system is generally more expensive than an actual or normal costing system.
A)True
B)False
42
The use of standard costs in product costing results in more stable product costs than if actual production costs are used.
A)True
B)False
43
As today's manufacturing environment of JIT production, JIT inventory management systems, and computer-integrated manufacturing (CIM) becomes moreprevalent, labor standards and variances will have reduced importance.
A)True
B)False
44
A key objective of a cost management system (CMS) is the elimination of non-value-added costs.
A)True
B)False
45
The continual search for the most effective method of accomplishing a task, by comparing existing methods and performance levels with those of other organizations, is called benchmarking
A)True
B)False
46
Customer acceptance is one the measures of the operational performance of production and delivery.
A)True
B)False
47
Manufacturing cycle efficiency (MCE) is one of the measures of the operational performance of production and delivery.
A)True
B)False
48
The percentage of sales from new products is one of the measures of the operational performance of inventory.
A)True
B)False
49
Manufacturing cycle efficiency (MCE) may be defined as processing time divided by the combined total of processing time, inspection time, waiting time, and move time.
A)True
B)False
50
Total output divided by total input equals aggregate productivity.
A)True
B)False
51
Customer complaints, the number of warranty claims, and the number of products returned are examples of in-process-quality control issues.
A)True
B)False
52
A bottleneck operation is one that limits the productive capacity of the entire facility.
A)True
B)False
53
Manufacturing cycle time (MCE) is the average time between the receipt of a customer order and delivery of the goods.
A)True
B)False
54
An incentive plan that specifies a formula by which the cost savings from productivity gains achieved by a company are shared with the workers who helped accomplish the improvements is called a gain-sharing plan.
A)True
B)False
55
A quality audit program is an example of an in-process quality control procedure.
A)True
B)False
56
The ratio of process time to the sum of processing time, inspection time, waiting time, and move time is called manufacturing cycle efficiency.
A)True
B)False
57
Total output (in dollars) divided by the cost of a particular input is called component or aggregate productivity.
A)True
B)False
58
Velocity is defined as the number of units produced in a given time period.
A)True
B)False
59
A company's profit and cash flow is a lead indicator.
A)True
B)False
60
The balanced scorecard perspective that addresses the question of "In which activities the company must excel?" is the financial perspective.
A)True
B)False
61
The balanced scorecard perspective that addresses the question of "How can we continually improve and create value?" is the learning and growth perspective.
A)True
B)False
62
The balanced scorecard perspective that addresses the question of "How do we look to the firm's owners?" is the financial perspective.
A)True
B)False
63
The whole idea of the balanced scorecard is to use lead indicators to communicate with, motivate, and evaluate individuals with the expectation that their current actions will result in improvements in the company's important lag indicators.
A)True
B)False
64
In concluding the chapter presentation on standard costing and performance measures, it should be noted that managers of most successful organizations rely exclusively on financial performance.
A)True
B)False





To learn more about the book this website supports, please visit its Information Center.
(c)2009 Tata McGraw-Hill
Any use is subject to the Terms of Use and Privacy Policy.
Tata McGraw-Hill is one of the many fine businesses ofThe McGraw-Hill Companies.


Hilton (SIE)Online Learning Center

Home > Chapter 10 > True or False