COST Acctg 2 - cost PDF

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21. Principle of exceptions allows managers to focus on correcting variances between standard costs and actual costs. TRUE 22. Because accountants have financial expertise, they are the only ones that are able to set standard costs for the production area. FALSE 23. While setting standards, the managers should never allow for spoilage or machine breakdowns in their calculations. FALSE 24. A budget performance report compares actual results with the budgeted amounts and reports differences for possible investigation. TRUE 25. A favorable cost variance occurs when actual cost is less than budgeted cost at actual volumes. TRUE 26. An unfavorable cost variance occurs when budgeted cost at actual volumes exceeds actual cost. FALSE 27. Standards are designed to evaluate price and quantity variances separately. TRUE 28. If the standard to produce a given amount of product is 2,000 units of direct materials at $12 and the actual was 1,600 units at $13, the direct materials quantity variance was $5,200 favorable. FALSE 29. 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 quantity variance was $2,200 unfavorable. FALSE 30. 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. TRUE...