Exam 8: Budgetary Control and Variance Analysis

PVC Pro produces PVC pipe in 12 foot lengths. The following information was provided concerning its labor and materials How much is the materials price variance?

(Multiple Choice)

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Question 41

Small variances probably indicate random factors at work while large variances could signal a permanent change in the operating environment.

(True/False)

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Question 42

The controller for Navia, Inc. created a budget prior to the current period. At the end of the period, the controller compared the budget with the actual results. For what purpose is the controller using budgets? a. Coordination B) Control C) Variances D) Planning

(Short Answer)

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Question 43

The formula for calculating an input price variance is:

(Multiple Choice)

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Question 44

Cost variance analysis in a single-product company differs significantly from a multi-product company.

(True/False)

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Question 45

The primary limitations of variance analysis pertain to relevance and feedback.

(True/False)

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Question 46

For what purpose is a flexible budget used? a. To provide various possible outcomes for management to consider. B) To adjust input prices so that future variances are eliminated. C) To insure that profit does not drop below a predetermined level. D) To identify the sources of variances.

(Short Answer)

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Question 47

Which of the following is not a general rule to follow in a variance investigation? a. Adjust budgeted amounts to agree with actual amounts. B) Investigate all significant variances, whether favorable or unfavorable. C) Examine trends. D) Consider the total picture. E) All of the above are general rules to follow.

(Short Answer)

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Question 48

A good plan is the foundation for effective control.

(True/False)

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Question 49

Any profit difference between the master and flexible budgets is due solely to the difference between budgeted and actual sales.

(True/False)

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Question 50

Sales Volume Variance = (Actual Sales Quantity - Budgeted Sales Quantity) x Actual Unit Contribution Margin

(True/False)

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Question 51

The following material budgets have been developed for the Criders Company. If the company purchased 16,000 units, the actual price per pound of material purchased must have been:

(Multiple Choice)

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Question 52

In comparison to financial measures, nonfinancial measures tend to be? a. Less timely, less specific. B) More timely, less specific. C) Less timely, more specific. D) More timely, more specific.

(Short Answer)

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Question 53

The purpose of creating a flexible budget is to:

(Multiple Choice)

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Question 54

The Parsons Company has budgeted to capture 25% of the market in which they operate which currently contains 1,000 stores. The budgeted contribution margin per unit sold is $4.50. If they were actually able to capture only 20% of the market, but their actual contribution margin was $5.00 per unit, their market share variance was:

(Multiple Choice)

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Question 55

A company may experience a favorable labor rate variance but an unfavorable labor efficiency variance when:

(Multiple Choice)

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Question 56

Showing 41 - 56 of 56

PVC Pro produces PVC pipe in 12 foot lengths. The following information was provided concerning its labor and materials How much is the materials price variance?

Small variances probably indicate random factors at work while large variances could signal a permanent change in the operating environment.

The controller for Navia, Inc. created a budget prior to the current period. At the end of the period, the controller compared the budget with the actual results. For what purpose is the controller using budgets? a. Coordination B) Control C) Variances D) Planning

The formula for calculating an input price variance is:

Cost variance analysis in a single-product company differs significantly from a multi-product company.

The primary limitations of variance analysis pertain to relevance and feedback.

For what purpose is a flexible budget used? a. To provide various possible outcomes for management to consider. B) To adjust input prices so that future variances are eliminated. C) To insure that profit does not drop below a predetermined level. D) To identify the sources of variances.

A good plan is the foundation for effective control.

Any profit difference between the master and flexible budgets is due solely to the difference between budgeted and actual sales.

Sales Volume Variance = (Actual Sales Quantity - Budgeted Sales Quantity) x Actual Unit Contribution Margin

The following material budgets have been developed for the Criders Company. If the company purchased 16,000 units, the actual price per pound of material purchased must have been:

In comparison to financial measures, nonfinancial measures tend to be? a. Less timely, less specific. B) More timely, less specific. C) Less timely, more specific. D) More timely, more specific.

The purpose of creating a flexible budget is to:

A company may experience a favorable labor rate variance but an unfavorable labor efficiency variance when:

Accounting: Information for Decision Making

Identification and Estimating Costs and Benefits

Cost Flows and Cost Terminology

Techniques for Estimating Fixed and Variable Costs

Cost-Volume-Profit Analysis

Decision Making in the Short Term

Operating Budgets: Bridging Planning and Control

Cost Allocations: Theory and Applications

Activity-Based Costing and Management

Managing Long-Lived Resources: Capital Budgeting

Performance Evaluation in Decentralized Organizations

Strategic Planning and Control

Job Costing

Process Costing

Support Activity and Dual Rate Allocations

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