Acc 560 Wk 8 Hw Ch12 - Exercises 3, 6, 7,11; Problems 1 and 3

ACC 560 WK 8 Quiz 11 - All Possible Questions

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ACC 560 WK 8 Quiz 11 - All Possible Questions

TRUE-FALSE STATEMENTS

    1.     Inventories cannot be valued at standard cost in financial statements.

    2.     Standard cost is the industry average cost for a particular item.

    3.     A standard is a unit amount, whereas a budget is a total amount.

    4.     Standard costs may be incorporated into the accounts in the general ledger.

    5.     An advantage of standard costs is that they simplify costing of inventories and reduce clerical costs.

    6.     Setting standard costs is relatively simple because it is done entirely by accountants.

    7.     Normal standards should be rigorous but attainable.

    8.     Actual costs that vary from standard costs always indicate inefficiencies.

    9.     Ideal standards will generally result in favorable variances for the company.

  10.     Normal standards incorporate normal contingencies of production into the standards.

  11.     Once set, normal standards should not be changed during the year.

   12.     In developing a standard cost for direct materials, a price factor and a quantity factor must be considered.

  13.     A direct labor price standard is frequently called the direct labor efficiency standard.

  14.     The standard predetermined overhead rate must be based on direct labor hours as the standard activity index.

  15.     Standard cost cards are the subsidiary ledger for the Work in Process account in a standard cost system.

  16.     A variance is the difference between actual costs and standard costs.

  17.     If actual costs are less than standard costs, the variance is favorable.

  18.     A materials quantity variance is calculated as the difference between the standard direct materials price and the...