Question 1

The sales quantity variance is the same as the sales activity variance on a flexible budget performance report.

Accepted Answer

A) True 
 B)False

Question 2

In a standard cost system,overhead is applied to production on a basis of

Accepted Answer

A) the denominator hours chosen for the period. 
B) the budgeted hours for the normal production level of activity. 
C) the actual hours required to complete the output of the period. 
D) the standard hours allowed to complete the output of the period. 
A) the denominator hours chosen for the period. 
B) the budgeted hours for the normal production level of activity. 
C) the actual hours required to complete the output of the period. 
D) the standard hours allowed to complete the output of the period.

Question 3

If variances are not prorated at the end of the accounting period,they are closed to the Cost of Goods Sold.

Accepted Answer

A) True 
 B)False

Question 4

What was the total actual cost of the direct materials purchased during May?

Accepted Answer

A) $9,000 
B) $11,800 
C) $12,000 
D) $12,200 
A) $9,000 
B) $11,800 
C) $12,000 
D) $12,200

Question 5

What is the sales activity variance for the basic model?

Accepted Answer

A) $1,280,000 
B) $1,600,000 
C) $11,200,000 
D) $12,800,000 
A) $1,280,000 
B) $1,600,000 
C) $11,200,000 
D) $12,800,000

Question 6

The basic variance analysis framework used for manufacturing companies can also be used in service organizations.

Accepted Answer

A) True 
 B)False

Question 7

The Wilbur Company gathered the following information for the year. What is the total sales mix variance?

Accepted Answer

A) $705,600 
B) $403,200 
C) $302,400 
D) $100,800 
A) $705,600 
B) $403,200 
C) $302,400 
D) $100,800

Question 8

The computation of the material yield variance does not require the

Accepted Answer

A) standard material mix. 
B) standard material price. 
C) standard output units. 
D) total material actually used. 
E) total material actually acquired. 
A) standard material mix. 
B) standard material price. 
C) standard output units. 
D) total material actually used. 
E) total material actually acquired.

Question 9

There are several reasons why actual results differ from standards.Which of the following does not represent a reason why a variance might occur?

Accepted Answer

A) Inaccurate information from the accounting system 
B) Increasing the accuracy of a variance report by decreasing its timeliness 
C) Standards which do not reflect the current economic conditions 
D) Operating conditions that are consistently inefficient 
E) Event or transaction that is unexpected and infrequent 
A) Inaccurate information from the accounting system 
B) Increasing the accuracy of a variance report by decreasing its timeliness 
C) Standards which do not reflect the current economic conditions 
D) Operating conditions that are consistently inefficient 
E) Event or transaction that is unexpected and infrequent

Question 10

If raw materials are carried in the Direct Materials Inventory at standard cost,then it is reasonable to assume that the

Accepted Answer

A) price variance is recognized when materials are purchased. 
B) price variance is recognized when materials are placed into production. 
C) company does not follow generally accepted accounting principles. 
D) efficiency variance is recognized when the materials are purchased. 
E) efficiency variance is recognized when the materials are placed into production. 
A) price variance is recognized when materials are purchased. 
B) price variance is recognized when materials are placed into production. 
C) company does not follow generally accepted accounting principles. 
D) efficiency variance is recognized when the materials are purchased. 
E) efficiency variance is recognized when the materials are placed into production.

Question 11

What is the total sales mix variance?

Accepted Answer

A) $12,478.00 
B) $20,815.00 
C) $33,915.00 
D) $40,553.50 
A) $12,478.00 
B) $20,815.00 
C) $33,915.00 
D) $40,553.50

Question 12

Is the materials mix variance favorable or unfavorable?

Accepted Answer

A) favorable. 
B) unfavorable. 
A) favorable. 
B) unfavorable.

Question 13

Is the sales activity variance for the basic model favorable or unfavorable?

Accepted Answer

A) favorable. 
B) unfavorable. 
A) favorable. 
B) unfavorable.

Question 14

Which of the following statements is (are)false? (A)All variances should be prorated to inventories and cost of goods sold at the end of the accounting period.
(B)If the number of units produced exceeds the number of units sold,the full-absorption operating profit will be lower than variable costing operating profit.

Accepted Answer

A) Only A is false. 
B) Only B is false. 
C) Both A and B are false. 
D) Neither A nor B is false. 
A) Only A is false. 
B) Only B is false. 
C) Both A and B are false. 
D) Neither A nor B is false.

Question 15

Using the abbreviations listed below,what is the formula for the industry volume variance? AMS = actual market share
BMS = budgeted market share
BCM = budgeted contribution margin per unit
ACM = actual contribution margin per unit
ATM = actual total market
BTM = budgeted total market

Accepted Answer

A) (ATM - BTM)(BMS)(ACM) 
B) (ATM - BTM)(BMS)(BCM) 
C) (AMS - BMS)(ATM)(ACM) 
D) (AMS - BMS)(ATM)(BCM) 
E) (ATM - BTM)(AMS)(ACM) 
A) (ATM - BTM)(BMS)(ACM) 
B) (ATM - BTM)(BMS)(BCM) 
C) (AMS - BMS)(ATM)(ACM) 
D) (AMS - BMS)(ATM)(BCM) 
E) (ATM - BTM)(AMS)(ACM)

Question 16

Is the total sales price variance favorable or unfavorable?

Accepted Answer

A) favorable. 
B) unfavorable. 
A) favorable. 
B) unfavorable.

Question 17

Is the total material price variance favorable or unfavorable?

Accepted Answer

A) favorable. 
B) unfavorable. 
A) favorable. 
B) unfavorable.

Question 18

Which of the following income statement items is analyzed using the sales mix and the sales quantity variances?

Accepted Answer

A) operating expenses. 
B) cost of goods sold. 
C) gross margin. 
D) contribution margin. 
A) operating expenses. 
B) cost of goods sold. 
C) gross margin. 
D) contribution margin.

Question 19

Two important characteristics to consider when deciding how many variances to review are how large the variance is and the extent to which the variance can be managed.

Accepted Answer

A) True 
 B)False

Question 20

The sales quantity variance would be favorable when a company sells

Accepted Answer

A) relatively fewer of the products bearing contribution margins lower than average. 
B) relatively more of the products bearing contribution margins higher than average. 
C) more total units than budgeted,holding the sales mix constant. 
D) less total units than budgeted,holding the sales mix constant. 
A) relatively fewer of the products bearing contribution margins lower than average. 
B) relatively more of the products bearing contribution margins higher than average. 
C) more total units than budgeted,holding the sales mix constant. 
D) less total units than budgeted,holding the sales mix constant.

The sales quantity variance is the same as the sales activity variance on a flexible budget performance report.

In a standard cost system,overhead is applied to production on a basis of

If variances are not prorated at the end of the accounting period,they are closed to the Cost of Goods Sold.

What was the total actual cost of the direct materials purchased during May?

What is the sales activity variance for the basic model?

The basic variance analysis framework used for manufacturing companies can also be used in service organizations.

The Wilbur Company gathered the following information for the year. What is the total sales mix variance?

The computation of the material yield variance does not require the

There are several reasons why actual results differ from standards.Which of the following does not represent a reason why a variance might occur?

If raw materials are carried in the Direct Materials Inventory at standard cost,then it is reasonable to assume that the

What is the total sales mix variance?

Is the materials mix variance favorable or unfavorable?

Is the sales activity variance for the basic model favorable or unfavorable?

Using the abbreviations listed below,what is the formula for the industry volume variance? AMS = actual market share BMS = budgeted market share BCM = budgeted contribution margin per unit ACM = actual contribution margin per unit ATM = actual total market BTM = budgeted total market

Is the total sales price variance favorable or unfavorable?

Is the total material price variance favorable or unfavorable?

Which of the following income statement items is analyzed using the sales mix and the sales quantity variances?

Two important characteristics to consider when deciding how many variances to review are how large the variance is and the extent to which the variance can be managed.

The sales quantity variance would be favorable when a company sells

Cost Accounting: Information for Decision Making

Fundamentals of Cost-Volume-Profit Analysis

Fundamentals of Cost Analysis for Decision Making

Cost Estimation

Fundamentals of Product and Service Costing

Job Costing

Process Costing

Activity-Based Costing

Service Department and Joint Cost Allocation

Fundamentals of Management Control Systems

Planning and Budgeting

Business Unit Performance Measurement

Transfer Pricing

Fundamentals of Variance Analysis

Nonfinancial and Multiple Measures of Performance

Filters

Exam 17: Additional Topics in Variance Analysis

The sales quantity variance is the same as the sales activity variance on a flexible budget performance report.

In a standard cost system,overhead is applied to production on a basis of

If variances are not prorated at the end of the accounting period,they are closed to the Cost of Goods Sold.

What was the total actual cost of the direct materials purchased during May?

What is the sales activity variance for the basic model?

The basic variance analysis framework used for manufacturing companies can also be used in service organizations.

The Wilbur Company gathered the following information for the year. What is the total sales mix variance?

The computation of the material yield variance does not require the

There are several reasons why actual results differ from standards.Which of the following does not represent a reason why a variance might occur?

If raw materials are carried in the Direct Materials Inventory at standard cost,then it is reasonable to assume that the

What is the total sales mix variance?

Is the materials mix variance favorable or unfavorable?

Is the sales activity variance for the basic model favorable or unfavorable?

Using the abbreviations listed below,what is the formula for the industry volume variance? AMS = actual market share BMS = budgeted market share BCM = budgeted contribution margin per unit ACM = actual contribution margin per unit ATM = actual total market BTM = budgeted total market

Is the total sales price variance favorable or unfavorable?

Is the total material price variance favorable or unfavorable?

Which of the following income statement items is analyzed using the sales mix and the sales quantity variances?

Two important characteristics to consider when deciding how many variances to review are how large the variance is and the extent to which the variance can be managed.

The sales quantity variance would be favorable when a company sells

Cost Accounting: Information for Decision Making

Fundamentals of Cost-Volume-Profit Analysis

Fundamentals of Cost Analysis for Decision Making

Cost Estimation

Fundamentals of Product and Service Costing

Job Costing

Process Costing

Activity-Based Costing

Service Department and Joint Cost Allocation

Fundamentals of Management Control Systems

Planning and Budgeting

Business Unit Performance Measurement

Transfer Pricing

Fundamentals of Variance Analysis

Nonfinancial and Multiple Measures of Performance

Filters