1.

A company developed the following per-unit standards for its product: 2 pounds of direct materials at
$4 per pound. Last month, 1,000 pounds of direct materials were purchased for $3,800. The direct
materials price variance for last month was
a. $3,800 favorable.
b. $200 favorable.
c. $100 favorable.
d. $200 unfavorable.

2. The per-unit standards for direct materials are 2 gallons at $4 per gallon. Last month, 2,800 gallons of
direct materials that actually cost $10,600 were used to produce 1,500 units of product. The direct
materials quantity variance for last month was
a. $800 favorable.
b. $600 favorable.
c. $800 unfavorable.
d. $1,400 unfavorable.

3. The purchasing agent of the Skateboard Company ordered materials of lower quality in an effort to
economize on price. What variance will most likely result?
a. Favorable materials quantity variance
b. Favorable total materials variance
b. Unfavorable materials price variance
d. Unfavorable labor quantity variance

4. The per-unit standards for direct labor are 2 direct labor hours at $15 per hour. If in producing 1,200
units, the actual direct labor cost was $32,000 for 2,000 direct labor hours worked, the total direct labor
variance is
a. $1,200 unfavorable.
b. $4,000 favorable.
c. $2,500 unfavorable.
d. $4,000 unfavorable.

5. The standard rate of pay is $15 per direct labor hour. If the actual direct labor payroll was $88,200 for
6,000 direct labor hours worked, the direct labor price (rate) variance is
a. $1,800 unfavorable.
b. $1,800 favorable.
c. $2,250 unfavorable.
d. $2,250 favorable.

6. The standard number of hours that should have been worked for the output attained is 6,000 direct
labor hours and the actual number of direct labor hours worked was 6,300. If the direct labor price
variance was $3,150 unfavorable, and the standard rate of pay was $9 per direct labor hour, what was
the actual rate of pay for direct labor?
a. $8.50 per direct labor hour
b. $7.50 per direct labor hour
c. $9.50 per direct labor hour
d. $9.00 per direct labor hour

7. Which one of the following statements is true?

a. If the materials price variance is unfavorable, then the materials quantity variance must also be
unfavorable.
b. If the materials price variance is unfavorable, then the materials quantity variance must be favorable.
c. Price and quantity variances move in the same direction. If one is favorable, the others will be as well.
d. There is no correlation of favorable or unfavorable for price and quantity variances.

8. Variances from standards are

a. expressed in total dollars.
b. expressed on a per-unit basis.
c. expressed on a percentage basis.
d. all of these.

9. A favorable variance
a. is an indication that the company is not operating in an optimal manner.
b. implies a positive result if quality control standards are met.
c. implies a positive result if standards are flexible.
d. means that standards are too loosely specified.

10. The total materials variance is equal to the

a. materials price variance.
b. difference between the materials price variance and materials quantity variance.
c. product of the materials price variance and the materials quantity variance.
d. sum of the materials price variance and the materials quantity variance.

11. The total overhead variance is equal to the

a. sum of the total materials variance and the total labor variance.
b. difference between the total materials variance and the total labor variance.
c. sum of the controllable variance and the volume variance.
d. total variance minus the controllable variance and the volume variance.

12. The total variance is $25,000. The total materials variance is $10,000. The total labor variance is
twice the total overhead variance. What is the total overhead variance?
a. $2,500
b. $5,000
c. $7,500
d. $10,000

13. A company developed the following per-unit standards for its product: 2 gallons of direct materials at
$6 per gallon. Last month, 3,000 gallons of direct materials were purchased
for $17,100. The direct materials price variance for last month was
a. $17,100 favorable.
b. $450 favorable.
c. $900 favorable.
d. $900 unfavorable.

14. The per-unit standards for direct materials are 2 pounds at $4 per pound. Last month, 11,200 pounds
of direct materials that actually cost $42,400 were used to produce 6,000 units of product. The direct
materials quantity variance for last month was
a. $3,200 favorable.
b. $2,400 favorable.
c. $3,200 unfavorable.
d. $5,600 unfavorable.

15. The per-unit standards for direct labor are 1.5 direct labor hours at $12 per hour. If in producing
2,400 units, the actual direct labor cost was $36,800 for 3,000 direct labor hours worked, the total direct
labor variance is
a. $1,920 unfavorable.
b. $6,400 favorable.
c. $4,000 unfavorable.
d. $6,400 unfavorable.

16. The standard rate of pay is $10 per direct labor hour. If the actual direct labor payroll was $39,200 for
4,000 direct labor hours worked, the direct labor price (rate) variance is
a. $800 unfavorable.
b. $800 favorable.
c. $1,000 unfavorable.
d. $1,000 favorable.

17. The standard number of hours that should have been worked for the output attained is 10,000 direct
labor hours and the actual number of direct labor hours worked was 10,500. If the direct labor price
variance was $10,500 unfavorable, and the standard rate of pay was $15 per direct labor hour, what was
the actual rate of pay for direct labor?
a. $14 per direct labor hour
b. $12 per direct labor hour
c. $16 per direct labor hour
d. $15 per direct labor hour