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STANDARD COSTS mcq homework

39.What is a standard cost?
a. The
total number of units times the budgeted amount expected
b. Any
amount that appears on a budget
c. The
total amount that appears on the budget for product costs
d. The
amount management thinks should be incurred to produce a good or
service

40. A standard cost is
a. a
cost which is paid for a group of similar products.
b. the
average cost in an industry.
c. a
predetermined cost.
d. the
historical cost of producing a product last year.

41. The difference between a budget and a
standard is that
a. a
budget expresses what costs were, while a standard expresses what costs should
be.
b. a
budget expresses management’s plans, while a standard reflects what actually
happened.
c. a
budget expresses a total amount, while a standard expresses a unit amount.
d. standards
are excluded from the cost accounting system, whereas budgets are generally
incorporated into the cost accounting system.

42. Standard costs may be used by
a. universities.
b. governmental
agencies.
c. charitable
organizations.
d. all
of these.

43. Which of the following statements is false?
a. A
standard cost is more accurate than a budgeted cost.
b. A
standard is a unit amount.
c. In
concept, standards and budgets are essentially the same.
d. The
standard cost of a product is equivalent to the budgeted cost per unit of
product.

44. Budget data are not journalized in cost
accounting systems with the exception of
a. the
application of manufacturing overhead.
b. direct
labor budgets.
c. direct
materials budgets.
d. cash
budget data.

45. It is possible that a company’s financial
statements may report inventories at
a. budgeted
costs.
b. standard
costs.
c. both
budgeted and standard costs.
d. none
of these.

46. A standard differs from a budget because a
standard
a. is
a predetermined cost.
b. contributes
to management planning and control.
c. is a unit amount.
d. none
of the above; a standard does not differ from a budget.

47. Marburg Co. expects direct materials cost of $6 per unit for
100,000 units (a total of $600,000 of direct materials costs). Marburg’s
standard direct materials cost and budgeted direct materials cost is
Standard Budgeted
a. $6
per unit $600,000 per
year
b. $6 per unit $6
per unit
c. $600,000 per year $6
per unit
d. $600,000 per year $600,000
per year

48. Using
standard costs
a. makes
employees less “cost-conscious.”
b. provides
a basis for evaluating cost control.
c. makes
management by exception more difficult.
d. increases
clerical costs.

49. Using standard costs
a. can
make management planning more difficult.
b. promotes
greater economy.
c. does
not help in setting prices.
d. weakens
management control.

50. If standard costs are incorporated into the
accounting system,
a. it
may simplify the costing of inventories and reduce clerical costs.
b. it
can eliminate the need for the budgeting process.
c. the
accounting system will produce information which is less relevant than the
historical cost accounting system.
d. approval
of the shareholders is required.

51. Standard costs
a. may
show past cost experience.
b. help
establish expected future costs.
c. are
the budgeted cost per unit in the present.
d. all
of these.

52. Which of the following statements about
standard costs is false?
a. Properly
set standards should promote efficiency.
b. Standard
costs facilitate management planning.
c. Standards
should not be used in “management by exception.”
d. Standard
costs can simplify the costing of inventories.

53. Which of the following is not considered an
advantage of using standard costs?
a. Standard
costs can reduce clerical costs.
b. Standard
costs can be useful in setting prices for finished goods.
c. Standard
costs can be used as a means of finding fault with performance.
d. Standard
costs can make employees “cost-conscious.”

54. If a company is concerned with the
potential negative effects of establishing standards, it should
a. set
loose standards that are easy to fulfill.
b. offer
wage incentives to those meeting standards.
c. not
employ any standards.
d. set
tight standards in order to motivate people.

55. A standard which represents an efficient
level of performance that is attainable under expected operating conditions is
called a(n)
a. ideal
standard.
b. loose
standard.
c. tight
standard.
d. normal
standard.

56. Ideal standards
a. are
rigorous but attainable.
b. are
the standards generally used in a master budget.
c. reflect
optimal performance under perfect operating conditions.
d. will
always motivate employees to achieve the maximum output.

57. The final decision as to what standard
costs should be is the responsibility of
a. the
quality control engineer.
b. the
managerial accountants.
c. the
purchasing agent.
d. management.

58. The labor time requirements for standards
may be determined by the
a. sales
manager.
b. product
manager.
c. industrial
engineers.
d. payroll
department manager.

59. The two levels that standards may be set at
are
a. normal
and fully efficient.
b. normal
and ideal.
c. ideal
and less efficient.
d. fully
efficient and fully effective.

`*
60. The most rigorous of all standards is the
a. normal
standard.
b. realistic
standard.
c. ideal
standard.
d. conceivable
standard.

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