Question 1. Several people play an essential part in setting standards. Which of the following is incorrect as to setting standards?
- Accountants express judgment in dollars and cents.
- Engineers identify material, labor, and machine requirements.
- Human resource managers provide personnel information.
- Quality managers provide quality measures that will be used to evaluate rejects.
Question 2. If the wage rate paid per hour differs from the standard wage rate per hour for direct labor, the variance is termed ________.
- variable variance
- rate variance
- quantity variance
- volume variance
Question 3. The Joyner Corporation had 8,000 actual direct labor hours at an actual rate of $12.20 per hour. Original production had been budgeted for 1,100 units, but only 1,000 units were actually produced. Labor standards were 7.5 hours per completed unit at a standard rate of $13 per hour.
Compute the labor rate variance.
- 6,400U
- 6,400F
- 6,500U
- 6,500F
Question 4. Which of the following is not a reason for a direct materials quantity variance?
- Malfunctioning equipment
- Purchasing of inferior raw materials
- Material requiring rework
- Spoilage of materials