1. Which of the following statements concerning ideal standards is incorrect?

A) Ideal standards generally do not provide the best motivation for workers.
B) Ideal standards do not make allowances for waste, spoilage, and machine breakdowns.
C) Ideal standards are better suited for cash budgeting than practical standards.
D) Ideal standards may be better than practical standards when managers seek continual improvement.
Source: CMA, adapted
Level: Medium LO: 1 Ans: C

2. Under traditional standard costing, which of the following would commonly be included when setting a
standard quantity for direct material?

A) A above
B) B above
C) C above
D) D above
Level: Medium LO: 1 Ans: A

3. When computing standard cost variances, the difference between actual and standard price multiplied
by actual quantity yields a(n):
A) combined price and quantity variance.
B) efficiency variance.
C) price variance.
D) quantity variance.
Source: CMA, adapted
Level: Easy LO: 2,3 Ans: C