Question 1

In the general model,a price variance is calculated as

Accepted Answer

A) (AP $\times$ AQ)- (AP $\times$ SQ) 
B) (AP $\times$ SQ)- (SP $\times$ SQ) 
C) (AP $\times$ AQ)- (SP $\times$ AQ) 
D) (AP $\times$ AQ)- (SP $\times$ SQ) 
A) (AP $\times$ AQ)- (AP $\times$ SQ) 
B) (AP $\times$ SQ)- (SP $\times$ SQ) 
C) (AP $\times$ AQ)- (SP $\times$ AQ) 
D) (AP $\times$ AQ)- (SP $\times$ SQ)

Question 2

Blue Company produces Trivets.Based on its master budget,the company should produce 1,000 Trivets each month,working 2,500 direct labor hours.During May,only 900 Trivets were produced.The company worked 2,400 direct labor hours.The standard hours allowed for May production would be

Accepted Answer

A) 2,500 hours. 
B) 2,400 hours. 
C) 2,250 hours. 
D) 1,800 hours. 
A) 2,500 hours. 
B) 2,400 hours. 
C) 2,250 hours. 
D) 1,800 hours.

Question 3

Variance analysis for fixed production costs is virtually the same as for variable production costs.

Accepted Answer

A) True 
 B)False

Question 4

Variances are the difference between actual results and budgeted results.

Accepted Answer

A) True 
 B)False

Question 5

The most fundamental variance analysis compares

Accepted Answer

A) standard material prices with actual material prices. 
B) standard direct labor rates with actual direct labor rates. 
C) budgeted sales revenue with actual sales revenue. 
D) budgeted operating income with actual operating income. 
A) standard material prices with actual material prices. 
B) standard direct labor rates with actual direct labor rates. 
C) budgeted sales revenue with actual sales revenue. 
D) budgeted operating income with actual operating income.

Question 6

The budget (or spending)variance for fixed production costs is the difference between the actual fixed costs and the budgeted fixed costs on the master budget.

Accepted Answer

A) True 
 B)False

Question 7

What is the production volume variance for May?

Accepted Answer

A) $2,000 
B) $3,000 
C) $6,000 
D) $8,000 
E) $9,000 
A) $2,000 
B) $3,000 
C) $6,000 
D) $8,000 
E) $9,000

Question 8

The budget for the month of May was for 9,000 units at a direct materials cost of $15 per unit.Direct labor was budgeted at 45 minutes per unit for a total of $81,000.Actual output for the month was 8,500 units with $127,500 in direct materials and $77,775 in direct labor expense.The direct labor standard of 45 minutes was obtained throughout the month.Variance analysis of the performance for the month of May would show a(n)(CMA adapted)

Accepted Answer

A) Favorable materials efficiency (quantity)variance of $7,500. 
B) Favorable direct labor efficiency variance of $1,275. 
C) Unfavorable direct labor efficiency variance of $1,275. 
D) Unfavorable direct labor price (rate)variance of $1,275. 
A) Favorable materials efficiency (quantity)variance of $7,500. 
B) Favorable direct labor efficiency variance of $1,275. 
C) Unfavorable direct labor efficiency variance of $1,275. 
D) Unfavorable direct labor price (rate)variance of $1,275.

Question 9

What were the actual quantity of materials used during the month?

Accepted Answer

A) 2,156. 
B) 2,100. 
C) 2,225. 
D) 1,975. 
A) 2,156. 
B) 2,100. 
C) 2,225. 
D) 1,975.

Question 10

Which of the following variances will always be favorable when actual sales exceeds budgeted sales?

Accepted Answer

A) variable cost 
B) fixed cost 
C) sales activity 
D) operating profit 
E) contribution margin 
A) variable cost 
B) fixed cost 
C) sales activity 
D) operating profit 
E) contribution margin

Question 11

Which of the following statements regarding variances is (are)false? (A)In general and holding all other things constant,an unfavorable variance decreases operating profits.
(B)A favorable variance is not always good,and an unfavorable variance is not always bad.

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 12

Is the direct materials price variance favorable or unfavorable?

Accepted Answer

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

Question 13

Is the fixed overhead spending (budget)variance favorable or unfavorable?

Accepted Answer

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

Question 14

What is the flexible budget contribution margin?

Accepted Answer

A) $39,000. 
B) $45,000. 
C) $52,000. 
D) $58,000. 
A) $39,000. 
B) $45,000. 
C) $52,000. 
D) $58,000.

Question 15

When a manager is concerned with monitoring total cost,total revenue,and net profit conditioned upon the level of productivity,an accountant should normally recommend (CPA adapted)

Accepted Answer

A) a 
B) b 
C) c 
D) d 
A) a 
B) b 
C) c 
D) d

Question 16

Both the actual material used and the standard quantity allowed for material is based on the actual output attained.

Accepted Answer

A) True 
 B)False

Question 17

When using a flexible budget,what will happen to variable costs on a per-unit basis as production increases within the relevant range?

Accepted Answer

A) Decrease. 
B) Increase. 
C) Remain unchanged. 
D) Fixed costs are not considered in flexible budgeting. 
A) Decrease. 
B) Increase. 
C) Remain unchanged. 
D) Fixed costs are not considered in flexible budgeting.

Question 18

Tub Company uses a standard cost system.The following information pertains to direct labor for product B for the month of October: What were the actual hours worked for the month of October?

Accepted Answer

A) 1,800 
B) 1,810 
C) 2,190 
D) 2,200 
A) 1,800 
B) 1,810 
C) 2,190 
D) 2,200

Question 19

It is possible to have a favorable direct material price variance and an unfavorable direct material efficiency variance.

Accepted Answer

A) True 
 B)False

Question 20

If the budgeted activity level is greater than the actual activity level,then the total budgeted costs of the master budget will be greater than the total budgeted costs of the flexible budget.

Accepted Answer

A) True 
 B)False

In the general model,a price variance is calculated as

Blue Company produces Trivets.Based on its master budget,the company should produce 1,000 Trivets each month,working 2,500 direct labor hours.During May,only 900 Trivets were produced.The company worked 2,400 direct labor hours.The standard hours allowed for May production would be

Variance analysis for fixed production costs is virtually the same as for variable production costs.

Variances are the difference between actual results and budgeted results.

The most fundamental variance analysis compares

The budget (or spending)variance for fixed production costs is the difference between the actual fixed costs and the budgeted fixed costs on the master budget.

What is the production volume variance for May?

What were the actual quantity of materials used during the month?

Which of the following variances will always be favorable when actual sales exceeds budgeted sales?

Which of the following statements regarding variances is (are)false? (A)In general and holding all other things constant,an unfavorable variance decreases operating profits. (B)A favorable variance is not always good,and an unfavorable variance is not always bad.

Is the direct materials price variance favorable or unfavorable?

Is the fixed overhead spending (budget)variance favorable or unfavorable?

What is the flexible budget contribution margin?

When a manager is concerned with monitoring total cost,total revenue,and net profit conditioned upon the level of productivity,an accountant should normally recommend (CPA adapted)

Both the actual material used and the standard quantity allowed for material is based on the actual output attained.

When using a flexible budget,what will happen to variable costs on a per-unit basis as production increases within the relevant range?

Tub Company uses a standard cost system.The following information pertains to direct labor for product B for the month of October: What were the actual hours worked for the month of October?

It is possible to have a favorable direct material price variance and an unfavorable direct material efficiency variance.

If the budgeted activity level is greater than the actual activity level,then the total budgeted costs of the master budget will be greater than the total budgeted costs of the flexible budget.

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

Additional Topics in Variance Analysis

Nonfinancial and Multiple Measures of Performance

Filters

Exam 16: Fundamentals of Variance Analysis

In the general model,a price variance is calculated as

Blue Company produces Trivets.Based on its master budget,the company should produce 1,000 Trivets each month,working 2,500 direct labor hours.During May,only 900 Trivets were produced.The company worked 2,400 direct labor hours.The standard hours allowed for May production would be

Variance analysis for fixed production costs is virtually the same as for variable production costs.

Variances are the difference between actual results and budgeted results.

The most fundamental variance analysis compares

The budget (or spending)variance for fixed production costs is the difference between the actual fixed costs and the budgeted fixed costs on the master budget.

What is the production volume variance for May?

What were the actual quantity of materials used during the month?

Which of the following variances will always be favorable when actual sales exceeds budgeted sales?

Which of the following statements regarding variances is (are)false? (A)In general and holding all other things constant,an unfavorable variance decreases operating profits. (B)A favorable variance is not always good,and an unfavorable variance is not always bad.

Is the direct materials price variance favorable or unfavorable?

Is the fixed overhead spending (budget)variance favorable or unfavorable?

What is the flexible budget contribution margin?

When a manager is concerned with monitoring total cost,total revenue,and net profit conditioned upon the level of productivity,an accountant should normally recommend (CPA adapted)

Both the actual material used and the standard quantity allowed for material is based on the actual output attained.

When using a flexible budget,what will happen to variable costs on a per-unit basis as production increases within the relevant range?

Tub Company uses a standard cost system.The following information pertains to direct labor for product B for the month of October: What were the actual hours worked for the month of October?

It is possible to have a favorable direct material price variance and an unfavorable direct material efficiency variance.

If the budgeted activity level is greater than the actual activity level,then the total budgeted costs of the master budget will be greater than the total budgeted costs of the flexible budget.

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

Additional Topics in Variance Analysis

Nonfinancial and Multiple Measures of Performance

Filters