1. There are several reasons why actual results differ from standards. Which of
ID: 2459653 • Letter: 1
Question
1. There are several reasons why actual results differ from standards. Which of the following does not represent a reason why a variance might occur?
A. Standards which do not reflect the current economic conditions.
B. Event or transaction that is unexpected and infrequent.
C. Increasing the accuracy of a variance report by decreasing its timeliness.
D. Operating conditions that are consistently inefficient.
E. Inaccurate information from the accounting system.
2. Arrow Industries employs a standard cost system in which direct materials inventory is carried at standard cost. Arrow has established the following standards for the prime costs of one unit of product.
During November, Arrow purchased 150,800 pounds of direct materials at a total cost of $306,400. The total factory wages for November were $27,900, 90% of which were for direct labor. Arrow manufactured 10,000 units of product during November using 81,100 pounds of direct materials and 2,600 direct labor hours.
A. $900 unfavorable.
B. $2,610 unfavorable.
C. $1,000 unfavorable.
D. $2,900 unfavorable.
3.
Arrow Industries employs a standard cost system in which direct materials inventory is carried at standard cost. Arrow has established the following standards for the prime costs of one unit of product.
During November, Arrow purchased 189,800 pounds of direct materials at a total cost of $385,900. The total factory wages for November were $46,800, 90% of which were for direct labor. Arrow manufactured 20,000 units of product during November using 143,500 pounds of direct materials and 5,090 direct labor hours.
A $6,300 favorable.
B $5,670 favorable.
C $65,700 favorable.
D $73,000 favorable.
1. There are several reasons why actual results differ from standards. Which of the following does not represent a reason why a variance might occur?
Explanation / Answer
1)
Variance occuring reasons:
Standards which do not reflect the current economic conditions.
Event or transaction that is unexpected and infrequent.
Operating conditions that are consistently inefficient.
Inaccurate information from the accounting system.
Therefore, option C is correct.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.