Misc. Accounting Questions
1. Value-added costs equal standard quantity times
currently attainable standards
2. As a general rule, an investigation of a variance should be undertaken only if the
anticipated benefits are greater than zero
anticipated benefits are greater than the expected costs
variance is negative
variance is positive
3. Which of the following statements is true regarding a long-range quality report?
This report measures trends of quality costs over time
This report measures interim progress towards the zero-defect goal.
This report measures actual costs of quality compared to budgeted costs of quality for a period of time.
This report measures actual costs of quality versus what quality costs would be at an ideal or targeted zero-defect standard
4. Which of the following equations measures the total budget variance?
AQ ? (AP – SP)
SP ? (AQ – SQ)
SQ ? (AP – SP)
(AQ ? AP) – (SQ ? SP)
5. An activity output measure is:
the number of outputs from a process
the cost of the activity measured
the effort expended to identify root causes
the number of times an activity is performed
6. An example of a prevention cost is:
7. Which of the following is an example of a non-value-added manufacturing activity?
8. A quality report that compares current actual quality costs with budgeted quality costs for the future is the:
interim quality performance report
one-year quality performance report
multiple-period quality trend report
long-range quality performance report
9. The number of units that can be produced in a given period of time is called:
10. Which of the following is a value-added activity?
11. Price/rate variances focus on the differences between
actual and standard inputs multiplied by actual prices.
actual and standard unit prices of an input multiplied by the actual quantity of inputs
actual and standard inputs multiplied by standard prices
actual and standard unit prices of an input multiplied by the budgeted quantity of inputs
12. For non-value-added activities that are unnecessary, the standard quantity is:
actual quantity minus standard price
actual quantity plus standard price
13. The costs of a consumer complaint department are:
external failure costs
internal failure costs
14. At the beginning of 2011, Peters Company installed a JIT purchasing and manufacturing system. The following information has been gathered about one of the company's products:
Theoretical annual capacity 2,000
Actual production 1,800
Production hours available 500
Actual conversion cost per hour $7
1) The theoretical velocity per hour is:
2) What is the ideal conversion cost per unit?
15. Bender Corporation produced 100 units of Product AA. The total standard and actual costs for materials and direct labor for the 100 units of Product AA are as follows:
Materials: Standard Actual
Standard: 200 pounds at $3.00 per pound $600
Actual: 220 pounds at $2.85 per pound $627
Standard: 400 hours at $15.00 per hour 6,000
Actual: 368 hours at $16.50 per hour 6,072
1)What is the material usage variance for Bender Corporation?
2) What is the material price variance for Bender Corporation?
16. At the beginning of the year, Grant Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years:
Preceding Year Current Year
Sales $3,000,000 $3,000,000
Quality training 3,000 4,500
Material inspections 7,500 12,000
Scrap 60,000 45,000
Rework 120,000 75,000
Product inspection 15,000 30,000
Product warranty 105,000 82,500
1)For the current year, prevention costs are what percentage of sales?
2) For the current year, appraisal costs are what percentage of sales?
3) For the current year, internal failure costs are what % of sales?
4)For the current year, external failure cost are what % of sales?