Question 1. A "standard cost" is a predetermined amount (e.g., cost) that:

• Should be incurred under relatively efficient operating conditions.

• Will be incurred for an operation or a specific objective.

• Must occur for an operation or a specific objective.

• Cannot be changed once it is established by management.

• Is useful for planning and control but not inventory valuation purposes.

Question 2. Which one of the following is the difference between the actual hourly wage rate and the standard hourly wagerate, multiplied by the actual direct labor hours worked during a period?

• Total direct labor standard cost variance.

• Direct labor efficiency variance.

• Direct labor usage variance.

• Direct labor flexible-budget variance.

• Direct labor rate variance.

Question 3. A flexible-budget variance measures the impact on short-term operating profit of:

• Changes in sales volume.

• Changes in output during the period.

• Differences in sales mix-budgeted versus actual.

• Selling price and cost differences-actual versus budgeted.

• Selling price, but not cost differences-actual versus budgeted.

Question 4. In deciding whether to further investigate a variance, an organization needs to weigh the costs of investigation against the:

• Ongoing time constraints.

• Size of the variance.

• Nature of the variance.

• Difficulty of the investigation.

• Anticipated benefits from the investigation.

Question 5. Which of the following factors is not usually important when deciding whether to investigate a variance?

• Magnitude of the variance.

• Trend of the variance over time.

• Whether the variance is favorable or unfavorable.

• Cost of investigating the variance.

• Likelihood that the variance will recur in the future.