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Cpa Review School of The Philippines: Theory

The document provides a series of multiple choice questions related to standard costing and variance analysis concepts. Specifically, it tests understanding of key terms like standard time, characteristics of an effective standard cost system, uses of standard costs, differences between standard and budgeted costs, how standard costing compares to normal costing, and how equivalent units are involved in standard cost reporting for process costing systems.

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151 views

Cpa Review School of The Philippines: Theory

The document provides a series of multiple choice questions related to standard costing and variance analysis concepts. Specifically, it tests understanding of key terms like standard time, characteristics of an effective standard cost system, uses of standard costs, differences between standard and budgeted costs, how standard costing compares to normal costing, and how equivalent units are involved in standard cost reporting for process costing systems.

Uploaded by

Hannah Corpuz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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CPA REVIEW SCHOOL OF THE PHILIPPINES

Manila

MANAGEMENT ADVISORY SERVICES

STANDARD COSTING & VARIANCE ANALYSIS

THEORY
1. Which one of the following terms best describes the rate of output which qualified workers can
achieve as an average over the working day or shift, without over-exertion, provided they adhere to
the specified method of working and are well motivated in their work?

A. Standard time B. Standard hours C. Standard unit D. Standard performance

2. The best characteristics of a standard cost system is

A. standard can pinpoint responsibility and help motivation

B. all variances from standard should be reviewed

C. all significant unfavorable variances should be reviewed

D. standard cost involves cost control which is cost reduction

3. Standard costs are used for all of the following except:

A. income determination C. measuring efficiencies

B. controlling costs D. forming a basis for price setting

4. Standard costs are least useful for


A. Measuring production efficiency C. Job order production systems

B. Simplifying costing procedures D. Determining minimum inventory levels

5. To which of the following is a standard cost nearly like?

A. Estimated cost. B. Budgeted cost. C. Product cost. D. Period cost.


6. A difference between standard costs used for cost control and budgeted costs

A. Can exist because standard costs must be determined after the budget is completed.

B. Can exist because standard costs represent what costs should be while budgeted costs
represent expected actual costs.

C. Can exist because budgeted costs are historical costs while standard costs are based on
engineering studies.

D. Can exist because establishing budgeted costs involves employee participation and standard
costs do not.

7. Normal costing and standard costing differ in that

A. the two systems can show different overhead budget variances.

B. only normal costing can be used with absorption costing.

C. the two systems show different volume variances if standard hours do not equal actual hours.

D. normal costing is less appropriate for multiproduct firms

8. When standard costs are used in a process-costing system, how, if at all, are equivalent units of
production (EUP) involved or used in the cost report at standard?

A. Equivalent units are not used.

B. Equivalent units are computed using a special approach.

C. The actual equivalent units are multiplied by the standard cost per unit.

D. The standard equivalent units are multiplied by the actual cost per unit.

9. The type of standard that is intended to represent challenging yet attainable results is:
A. theoretical standard D. normal standard

B. flexible budget standard E. expected actual standard

C. controllable cost standard

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