Given below is a portion of Swinging Tunes, Inc.'s management performance report: $\begin{array}{llll} &\underline{\text { Budget }}&\underline{\text { Actual }}&\underline{\text {Difference }}\\ \text { Contribution margin } & \$ 1,040,000 & \$ 1,020,000 & \$ 20,000 \\ \text { Controllable fixed costs } & 430,000 & 420,000 & 10,000 \end{array}$ Which statement is true about the manager's overall performance?

A) The manager's performance is above expectations. B) The manager's performance is below expectations. C) The manager was under budget on all controllable and uncontrollable amounts. D) The manager's overall performance cannot be determined from information given. A) The manager's performance is above expectations. B) The manager's performance is below expectations. C) The manager was under budget on all controllable and uncontrollable amounts. D) The manager's overall performance cannot be determined from information given.

Use the following information to answer questions EKPN Company prepared the following data in its static budget based on 150,000 machine hours: \[\begin{array} { l l } \text { Direct Materials } & \$ 4 5 0 , 0 0 0 \\ \text { Direct Labour } & 2 2 5 , 0 0 0 \\ \text { Variable Overhead } & 1,125,000 \\ \text { Fixed Overhead } & \mathbf { 2 } , 100,000 \end{array}\] \[\begin{array} { l l } \text { Actual Results: } & \\ \text { Machine Hours } & 160,000 \text { hours } \\ \text { Direct Materials } & \$ 475,000 \\ \text { Direct Labaur } & 2 4 5 , 000 \\ \text { Variable Overhead } & 1,150,000 \\ \text { Fixed Overhead } & \mathbf { 2 } , 110,000 \end{array}\] -What possible reason could explain the difference between the actual fixed overhead costs and the budgeted fixed overhead costs?

A) EKPN Company's actual machine hours were greater than the budgeted amount. B) EKPN Company's actual machine hours were less than the budgeted amount. C) EKPN Company spent more on fixed costs than it expected. D) EKPN Company spent less on fixed costs than expected. A) EKPN Company's actual machine hours were greater than the budgeted amount. B) EKPN Company's actual machine hours were less than the budgeted amount. C) EKPN Company spent more on fixed costs than it expected. D) EKPN Company spent less on fixed costs than expected.

A) is one that is geared to the most profitable level of activity for a company. B) is a projection of budget data at various levels of activity. C) considers that actual activity is often different from the level of activity expected. D) is a projection of budget data at one level of activity. A) is one that is geared to the most profitable level of activity for a company. B) is a projection of budget data at various levels of activity. C) considers that actual activity is often different from the level of activity expected. D) is a projection of budget data at one level of activity.

A) rarely generate revenues by selling products. B) generate a return on operating assets. C) are not often associated with product lines and subsidiary companies. D) are solely evaluated on the rate of return earned on the funds invested. A) rarely generate revenues by selling products. B) generate a return on operating assets. C) are not often associated with product lines and subsidiary companies. D) are solely evaluated on the rate of return earned on the funds invested.

A) is not as useful in evaluating a manager's performance as a static budget. B) can be prepared for each of the types of budgets included in the master budget. C) relies on the assumption that unit fixed costs will remain constant within the relevant range of activity. D) reflects budget data for one level of activity only. A) is not as useful in evaluating a manager's performance as a static budget. B) can be prepared for each of the types of budgets included in the master budget. C) relies on the assumption that unit fixed costs will remain constant within the relevant range of activity. D) reflects budget data for one level of activity only.