The standard price per unit for direct materials should reflect the final, delivered cost of the materials.

true

In general, the production manager is responsible for the materials price variance.

true

If skilled workers with high hourly rates of pay are given duties that require little skill and call for lower hourly rates of pay, this will result in a favorable labor rate variance.

false

The labor efficiency variance is labeled favorable (F) if the actual hours used is less than the standard hours allowed for the actual output.

true

The variable overhead efficiency variance does not actually measure how efficiently variable manufacturing overhead resources were used.

true

An unfavorable materials quantity variance occurs when the actual quantity used in production is less than the standard quantity allowed for the actual output of the period.

false

The general model for calculating a quantity variance is:

Standard price × (Actual quantity of inputs used − Standard quantity allowed for output)

If the actual hourly rate is greater than the standard hourly rate, the labor rate variance is labeled unfavorable (U).

true

Waste on the production line will result in an unfavorable materials price variance.

false

If variable manufacturing overhead is applied on the basis of direct labor-hours and the variable overhead rate variance is favorable, then:

the standard variable overhead rate exceeded the actual rate

The variable overhead efficiency variance measures the difference between the actual level of activity and the standard activity allowed for the actual output, multiplied by the fixed part of the predetermined overhead rate

false

When the materials price variance is recorded at the time of purchase, raw materials are recorded as inventory at standard cost.

true

A favorable labor rate variance indicates that

the standard rate exceeds the actual rate

The standard quantity or standard hours allowed refers to the amount of the input that should have been used to produce the actual output of the period.

true

An unfavorable materials quantity variance indicates that:

actual usage of material exceeds the standard material allowed for output.

Variable manufacturing overhead is applied to products on the basis of standard direct labor-hours. If the labor efficiency variance is favorable, the variable overhead efficiency variance will be:

favorable

Poorly trained workers could have an unfavorable effect on which of the following variances?

Labor Rate Variance Materials Quantity Variance
A) Yes Yes
B) Yes No
C) No Yes
D) No No

C

The production department should generally be responsible for materials price variances that resulted from:

rush orders arising from poor scheduling.

If variable manufacturing overhead is applied based on direct labor-hours, it is impossible to have a favorable labor rate variance and unfavorable variable overhead rate variance for the same period.

false

The variable overhead efficiency variance measures the difference between the actual level of activity and the standard activity allowed for the actual output, multiplied by the variable part of the predetermined overhead rate.

true