COMMERCE 2AB3 Study Guide - Final Guide: Direct Labor Cost, Management Accounting, Standard Cost Accounting

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 2AB3
• Professor: Karim Karim

Document Summary

True/false: a direct material quantity standard generally includes an allowance for waste. Level: easy lo: 1 ans: t: practical standards allow for normal machine downtime and employee rest periods. Level: easy lo: 1 ans: t: ideal standards can be used in forecasting and planning whereas practical standards cannot be used for such purposes. Level: easy lo: 1 ans: f: most companies compute the materials price variance when materials are placed into production. Level: easy lo: 2 ans: f: a materials price variance is favorable if the actual price exceeds the standard price. Level: easy lo: 2 ans: f: 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. Level: easy lo: 2 ans: f: an unfavorable labor rate variance can occur if workers with high hourly wage rates are assigned to work on products whose standards assume workers with low hourly wage rates.