The following describes the ideal standards, except

a.currently attainable standard

b.theoretical or maximum-efficiency standards
c.make no allowance for waste, machine downtime, and spoilage
d.perfection standards
Answer: A

Which of the following does not describe practical standards?

a.Currently attainable standards
b.Can be used for product costing and cash budgeting
c.Performance that is reasonably expected to be achieved with an allowance for
normal spoilage, waste and downtime
d.Negate the need to adjust standards if working conditions change
Answer: D

The difference between the actual time used and the amount of the time that should
have been used for actual production, multiplied by the standard labor rate per time is
called
a.Efficiency variance
b.Price variance
c.Spending variance
d.Rate variance
Answer: A

The difference between the actual price or rate paid and the standard price or rate that
should have been paid, multiplied by the actual quantity or actual time is called
a.Efficiency variance
b.Quantity variance
c.Time variance
d.Spending variance
Answer: D

The most common treatment of the underapplied overhead at the end of the year
would be to:
a.carry it as a deferred charges on the balance sheet
b.report it as a miscellaneous expense on the income statement
c.debit it to Cost of Goods Sold
d.prorate between Work in Process Inventory and Finished Goods Inventory
Answer: C