Question 1

A variance is the difference between a budgeted amount and a forecasted amount.

Accepted Answer

A) True 
 B)False

Question 2

Total Profit Variance = Actual Profit - Master Budget Profit.

Accepted Answer

A) True 
 B)False

Question 3

Sales commissions for the Grant Company are budgeted based on a percent of sales.The sales department budgeted sales of $150,000 for total commissions of $4,500.If actual sales totaled $170,000 the flexible budget will show total commissions of:

Accepted Answer

A) $24,500 
B) $5,100 
C) $4,500 
D) $15,500 
A) $24,500 
B) $5,100 
C) $4,500 
D) $15,500

Question 4

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

Accepted Answer

Budgeted Sales Quant

Question 5

Which of the following statements is not true?

Accepted Answer

A) If actual sales are greater than budgeted sales, the result is a favorable variance. 
B) If actual cost is greater than budgeted cost, the result is an unfavorable variance. 
C) If budgeted sales are greater than actual sales, the result is an unfavorable variance. 
D) If budgeted cost is greater than actual cost, the result is an unfavorable variance. 
E) If actual cost is less than budgeted cost, the result is a favorable variance. 
A) If actual sales are greater than budgeted sales, the result is a favorable variance. 
B) If actual cost is greater than budgeted cost, the result is an unfavorable variance. 
C) If budgeted sales are greater than actual sales, the result is an unfavorable variance. 
D) If budgeted cost is greater than actual cost, the result is an unfavorable variance. 
E) If actual cost is less than budgeted cost, the result is a favorable variance.

Question 6

The lack of timeliness and specificity in financial variances force organizations to use primarily non-financial controls to ensure that they are meeting organizational objectives.

Accepted Answer

A) True 
 B)False

Question 7

A budget reconciliation is a report that uses variances to reconcile the difference between master budget profit and actual profit.

Accepted Answer

A) True 
 B)False

Question 8

The formula for the sales volume variance is:

Accepted Answer

A) (Actual Sales Quantity - Budgeted Sales Quantity) x Actual Unit Contribution Margin 
B) (Budgeted Sales Quantity - Actual Sales Quantity) x Total Profit Variance 
C) Flexible Budget Profit - Master Budget Profit. 
D) (Budgeted Sales Quantity - Actual Sales Quantity) ÷ Total Profit Variance 
E) (Actual Sales Quantity - Budgeted Sales Quantity) ÷ Actual Unit Contribution Margin 
A) (Actual Sales Quantity - Budgeted Sales Quantity) x Actual Unit Contribution Margin 
B) (Budgeted Sales Quantity - Actual Sales Quantity) x Total Profit Variance 
C) Flexible Budget Profit - Master Budget Profit. 
D) (Budgeted Sales Quantity - Actual Sales Quantity) ÷ Total Profit Variance 
E) (Actual Sales Quantity - Budgeted Sales Quantity) ÷ Actual Unit Contribution Margin

Question 9

Many firms use process control charts and statistical control methods to help employees track performance on a real-time basis.

Accepted Answer

A) True 
 B)False

Question 10

For most organizations, a budget is the benchmark for evaluating actual performance.

Accepted Answer

A) True 
 B)False

Question 11

Thurston Company's budget allows for one pound of material to be used for each unit produced.The budget indicates that the material costs $2.50 per pound.Actual units produced totaled 8,000.The company used a total of 8,200 pounds of material at an actual cost of $2.40 per pound.There were no beginning or ending inventories of raw materials.The input price and input quantity variances, respectively, would be: $\begin{array}{ll}
&\text { Input Price } & \text { Input Quantity } \
A.&\text { Favorable } & \text { Favorable } \
B.&\text { Unfavorable } & \text { Favorable } \
C.&\text { Unfavorable } & \text { Unfavorable } \
D.&\text { Favorable } & \text { Unfavorable }
\end{array}$

Accepted Answer

The answer of Thurston Company's budget allows for one pound...

Question 12

Given the following data, what is the sales mix variance for Rizzo Company? $$\begin{array} { l r } 
\text { Actual total sales } & \$ 7,475 \
\text { Budgeted total sales } & \$ 7,500 \
\text { Weighted unit contribution margin in the flexible budget } & \$ 12 \
\text { Weighted unit contribution margin in the master budget } & \$ 8
\end{array}$$

Accepted Answer

A) 200 Favorable. 
B) 200 Unfavorable. 
C) 29,900 Favorable. 
D) 29,900 Unfavorable. 
E) 300 Unfavorable. 
A) 200 Favorable. 
B) 200 Unfavorable. 
C) 29,900 Favorable. 
D) 29,900 Unfavorable. 
E) 300 Unfavorable.

Question 13

If the labor efficiency variance is $1,000unfavorable, then:

Accepted Answer

A) Budgeted labor rate exceeded actual labor rate. 
B) Actual labor rate exceeded budgeted labor rate. 
C) Budgeted labor input exceeded actual labor input. 
D) Actual labor input exceeded budgeted labor input. 
E) None of the above. 
A) Budgeted labor rate exceeded actual labor rate. 
B) Actual labor rate exceeded budgeted labor rate. 
C) Budgeted labor input exceeded actual labor input. 
D) Actual labor input exceeded budgeted labor input. 
E) None of the above.

Question 14

Firms use non-financial measures to:

Accepted Answer

A) Identify problems with their processes. 
B) Help align goals. 
C) Provide on-going feedback to employees. 
D) Evaluate employees. 
E) All of the above. 
A) Identify problems with their processes. 
B) Help align goals. 
C) Provide on-going feedback to employees. 
D) Evaluate employees. 
E) All of the above.

Question 15

PVC Pro produces PVC pipe in 12 foot lengths.The following information was provided concerning its labor and materials $$\begin{array} { | l | c | } 
\hline  { \text { Actual Data } } \
\hline \text { Produced } & 12,200 \text { units } \
\hline \text { Materials used } & \text { 4,650 lbs. @ \$7.00 per pound } \
\hline \text { Labor worked } & 7,450 \text { hrs. costing \$80,460 } \
\hline
\end{array}$$ $$\begin{array} { | l | r | } 
\hline  { \text { Budget Data } } \
\hline \text { Budgeted units } & 12,000 \text { units } \
\hline \text { Budgeted materials per pipe } & 0.40 \mathrm { lb } . \mid @ \$ 7.10 \text { per pound } \
\hline \text { Budgeted labor per pipe } & 0.60 \text { hours @ } \$ 11.00 \text { per hour } \
\hline
\end{array}$$
How much is the materials price variance?

Accepted Answer

A) $1,530 F 
B) $465 F 
C) $1,050 F 
D) $1,065 F 
A) $1,530 F 
B) $465 F 
C) $1,050 F 
D) $1,065 F

Question 16

If a materials input price is higher than budgeted, the result is an unfavorable materials efficiency variance.

Accepted Answer

A) True 
 B)False

Question 17

The purpose of creating a flexible budget is to:

Accepted Answer

A) Determine how much of the difference between actual and budgeted profits was due strictly to the difference between budgeted and actual sales. 
B) Determine how much of the difference between actual and budgeted profits was due strictly to the difference between budgeted and actual variable costs. 
C) Determine how much of the difference between actual and budgeted profits was due strictly to the difference between budgeted and actual fixed costs. 
D) Determine which department is responsible for the overall budget variance. 
A) Determine how much of the difference between actual and budgeted profits was due strictly to the difference between budgeted and actual sales. 
B) Determine how much of the difference between actual and budgeted profits was due strictly to the difference between budgeted and actual variable costs. 
C) Determine how much of the difference between actual and budgeted profits was due strictly to the difference between budgeted and actual fixed costs. 
D) Determine which department is responsible for the overall budget variance.

Question 18

A spending variance results when there is a difference between actual and budgeted:

Accepted Answer

A) Fixed costs 
B) Variable costs 
C) Sales Revenue 
D) Unit sales 
A) Fixed costs 
B) Variable costs 
C) Sales Revenue 
D) Unit sales

Question 19

In comparison to financial measures, nonfinancial measures tend to be?

Accepted Answer

A) Less timely, less specific. 
B) More timely, less specific. 
C) Less timely, more specific. 
D) More timely, more specific. 
A) Less timely, less specific. 
B) More timely, less specific. 
C) Less timely, more specific. 
D) More timely, more specific.

Question 20

Which of the following items would differ in amount when comparing the master and flexible budgets for a freight company in which actual sales resulted in $2,500,000 based on 8,000 shipments during a period that 7,800 shipments were budgeted?

Accepted Answer

A) Total sales revenue. 
B) Equipment costs. 
C) Rent. 
D) All of the above will differ. 
A) Total sales revenue. 
B) Equipment costs. 
C) Rent. 
D) All of the above will differ.

A variance is the difference between a budgeted amount and a forecasted amount.

Total Profit Variance = Actual Profit - Master Budget Profit.

Sales commissions for the Grant Company are budgeted based on a percent of sales.The sales department budgeted sales of $150,000 for total commissions of $4,500.If actual sales totaled $170,000 the flexible budget will show total commissions of:

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

Which of the following statements is not true?

The lack of timeliness and specificity in financial variances force organizations to use primarily non-financial controls to ensure that they are meeting organizational objectives.

A budget reconciliation is a report that uses variances to reconcile the difference between master budget profit and actual profit.

The formula for the sales volume variance is:

Many firms use process control charts and statistical control methods to help employees track performance on a real-time basis.

For most organizations, a budget is the benchmark for evaluating actual performance.

Given the following data, what is the sales mix variance for Rizzo Company? Actual total sales \ 7,475 Budgeted total sales \ 7,500 Weighted unit contribution margin in the flexible budget \ 12 Weighted unit contribution margin in the master budget \ 8

If the labor efficiency variance is $1,000unfavorable, then:

Firms use non-financial measures to:

If a materials input price is higher than budgeted, the result is an unfavorable materials efficiency variance.

The purpose of creating a flexible budget is to:

A spending variance results when there is a difference between actual and budgeted:

In comparison to financial measures, nonfinancial measures tend to be?

Which of the following items would differ in amount when comparing the master and flexible budgets for a freight company in which actual sales resulted in $2,500,000 based on 8,000 shipments during a period that 7,800 shipments were budgeted?

Accounting: Information for Decision Making

Identifying 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

Activity-Based Costing Management

Capital Budgeting

Performance Evaluation in Decentralized Organizations

Strategic Planning and Control

Job-Costing Systems

Process-Costing Systems

Refining Systems: Support Activity

Filters

Exam 8: Budgetary Control and Variance Analysis

A variance is the difference between a budgeted amount and a forecasted amount.

Total Profit Variance = Actual Profit - Master Budget Profit.

Sales commissions for the Grant Company are budgeted based on a percent of sales.The sales department budgeted sales of $150,000 for total commissions of $4,500.If actual sales totaled $170,000 the flexible budget will show total commissions of:

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

Which of the following statements is not true?

The lack of timeliness and specificity in financial variances force organizations to use primarily non-financial controls to ensure that they are meeting organizational objectives.

A budget reconciliation is a report that uses variances to reconcile the difference between master budget profit and actual profit.

The formula for the sales volume variance is:

Many firms use process control charts and statistical control methods to help employees track performance on a real-time basis.

For most organizations, a budget is the benchmark for evaluating actual performance.

Given the following data, what is the sales mix variance for Rizzo Company? Actual total sales \ 7,475 Budgeted total sales \ 7,500 Weighted unit contribution margin in the flexible budget \ 12 Weighted unit contribution margin in the master budget \ 8

If the labor efficiency variance is $1,000unfavorable, then:

Firms use non-financial measures to:

If a materials input price is higher than budgeted, the result is an unfavorable materials efficiency variance.

The purpose of creating a flexible budget is to:

A spending variance results when there is a difference between actual and budgeted:

In comparison to financial measures, nonfinancial measures tend to be?

Which of the following items would differ in amount when comparing the master and flexible budgets for a freight company in which actual sales resulted in $2,500,000 based on 8,000 shipments during a period that 7,800 shipments were budgeted?

Accounting: Information for Decision Making

Identifying 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

Activity-Based Costing Management

Capital Budgeting

Performance Evaluation in Decentralized Organizations

Strategic Planning and Control

Job-Costing Systems

Process-Costing Systems

Refining Systems: Support Activity

Filters