Accounting SmartBook Practice Test
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About this Exam
Prepare with the Accounting SmartBook Practice Test practice quiz. This question bank includes 10 questions covering overhead, standard, direct, data, and variance. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.
Sample Questions
Question
1
Using the same direct labor data, what is the direct labor rate variance?
Explanation:
Direct labor rate variance shows how much more (or less) you paid per hour for direct labor than the standard rate, multiplied by the actual hours worked. An unfavorable variance means actual hourly pay was higher than planned. In this case, the data yield a $1,000 unfavorable variance, meaning the actual rate exceeded the standard rate enough to generate a $1,000 shortfall. For illustration, paying $1 more per hour for 1,000 hours would create a $1,000 unfavorable variance, or paying $2 more per hour for 500 hours would do the same. The other options would require paying less than the standard rate (favorable) or no difference at all, which doesn’t align with the given data.
Question
2
XYZ Company presents the following materials data: AQ × AP = $150,000; AQ × SP = $145,000; SQ × SP = $152,000. Compute the direct materials quantity variance.
Explanation:
Direct materials quantity variance shows whether actual material usage was more or less than the standard amount for the actual production, valued at the standard price. It is calculated as (AQ − SQ) × SP, which you can compute using the given products: AQ × SP and SQ × SP. AQ × SP = 145,000 and SQ × SP = 152,000, so DMQV = 145,000 − 152,000 = −7,000. A negative result means you used less material than planned, which is favorable. Therefore, the direct materials quantity variance is 7,000 favorable.
Question
3
In the standard costing income statement, favorable variances are accounted for as a deduction from cost of goods sold at standard cost. Which statement best describes this treatment?
Explanation:
In standard costing, you price and report COGS using a standard cost, then adjust for how actual costs compare to that standard. A favorable variance means actual costs were lower than the standard, so the amount is subtracted from the standard COGS to reflect the lower expense on the income statement. For example, if standard COGS is 100,000 and the favorable variance is 5,000, the COGS reported would be 95,000. If the variance were unfavorable, you would add it to COGS, increasing the expense. So the best description is that the favorable variance is subtracted from COGS.
Question
4
Compute the direct labor variance given production of 35,000 units, standard of 1 hour at $10 per hour, and actual of 36,000 hours at $374,400.
Explanation:
Direct labor variance shows how much actual labor cost differs from the standard cost allowed for the actual output, and it can be broken into rate and efficiency variances. Standard hours for actual output = 35,000 units × 1 hour = 35,000 hours. Standard cost = 35,000 × $10 = $350,000. Actual cost = $374,400 for 36,000 hours. Total direct labor variance = 374,400 − 350,000 = $24,400 (unfavorable). Decomposing: - Rate variance = (Actual rate − Standard rate) × Actual hours = (374,400/36,000 − 10) × 36,000 = $14,400 (unfavorable). - Efficiency variance = (Actual hours − Standard hours) × Standard rate = (36,000 − 35,000) × $10 = $10,000 (unfavorable). The sum of rate and efficiency variances equals the total direct labor variance: 14,400 + 10,000 = 24,400 unfavorable.
Question
5
The fixed overhead spending variance is derived from these data: Actual fixed overhead cost incurred $21,000; Budgeted fixed overhead $20,000; Applied fixed overhead $24,000.
Explanation:
Fixed overhead spending variance shows whether actual fixed overhead costs came in higher or lower than what was budgeted, focusing only on actual vs budgeted costs rather than how much overhead was allocated to production. Here, actual fixed overhead incurred is 21,000 and budgeted fixed overhead is 20,000. The difference is 1,000, and because actual costs exceed the budget, it’s unfavorable. So the spending variance is 1,000 U. The applied fixed overhead of 24,000 relates to the volume variance (how much overhead was allocated to production) and is not part of the spending variance.
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Accounting SmartBook Practice Test
This practice set contains 10 questions from the matching question bank and focuses on overhead, standard, direct, data, and variance. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.
This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.
Frequently Asked Questions
This quiz contains a total of 10 practice questions carefully selected to test your knowledge on this subject.
Yes, you will have exactly 0 minutes to complete the exam. A countdown timer will be visible once you start.
Yes, you can retake this practice test as many times as you need. The questions and options may be randomized on subsequent attempts to ensure comprehensive learning.
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