These are true/false questions. ____ 16. If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12, the direct materials price variance was $800 unfavorable. ____ 17. A cost that will not be affected by later decisions is termed an opportunity cost. ____ 18. When manufactured goods are sold, their costs are transferred from Work in Process to Finished Goods. ____ 19. In preparing a master budget, once the sales budget is prepared, the production budget is normally prepared next. ____ 20. Currently attainable standards do not allow for reasonable production difficulties.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
These are true/false questions.
____ 16. If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12, the direct materials price variance was $800 unfavorable.
____ 17. A cost that will not be affected by later decisions is termed an opportunity cost.
____ 18. When manufactured goods are sold, their costs are transferred from Work in Process to Finished Goods.
____ 19. In preparing a
____ 20. Currently attainable standards do not allow for reasonable production difficulties.
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