Question 1

Which of the following informs management whether units sold were more or less than expected?

Accepted Answer

A)  Sales price variance 
B)  Sales volume variance 
C)  Market share variance 
D)  Industry volume variance 
A)  Sales price variance 
B)  Sales volume variance 
C)  Market share variance 
D)  Industry volume variance B

Question 2

The difference between standard hours and actual hours multiplied by the standard rate is the:

Accepted Answer

A)  Materials quantity variance 
B)  Overhead efficiency variance 
C)  Labor efficiency variance 
D)  Materials price variance 
A)  Materials quantity variance 
B)  Overhead efficiency variance 
C)  Labor efficiency variance 
D)  Materials price variance C

Question 3

Costs that a manager can control are called:

Accepted Answer

A)  Indirect costs 
B)  Product costs 
C)  Controllable costs 
D)  Managed costs 
A)  Indirect costs 
B)  Product costs 
C)  Controllable costs 
D)  Managed costs C

Question 4

Return on investment is equal to profit margin:

Accepted Answer

A)  Times asset turnover 
B)  Divided by asset turnover 
C)  Plus asset turnover 
D)  Minus asset turnover 
A)  Times asset turnover 
B)  Divided by asset turnover 
C)  Plus asset turnover 
D)  Minus asset turnover

Question 5

If the budgeted amount for fixed manufacturing overhead is less than the standard hours allowed for the actual output times the standard rate, the result is:

Accepted Answer

A)  A favorable fixed overhead budget variance 
B)  An unfavorable fixed overhead budget variance 
C)  A favorable volume variance 
D)  An unfavorable volume variance 
A)  A favorable fixed overhead budget variance 
B)  An unfavorable fixed overhead budget variance 
C)  A favorable volume variance 
D)  An unfavorable volume variance

Question 6

Exhibit 19-5 Ridgeline Corporation has the following operating data for the year:
  
-Refer to Exhibit 19-5. Given the above data for Ridgeline Company, what is the ROI assuming the minimum rate of return on assets is 10%?

Accepted Answer

A)  15% 
B)  24.4% 
C)  36.7% 
D)  55.9% 
A)  15% 
B)  24.4% 
C)  36.7% 
D)  55.9%

Question 7

Which of the following is a true statement?

Accepted Answer

A)  When actual price is greater than expected price, a favorable variance results 
B)  When expected price is greater than actual price, a favorable variance results 
C)  When expected price is equal to actual price, a favorable variance results 
D)  None of these are true statements 
A)  When actual price is greater than expected price, a favorable variance results 
B)  When expected price is greater than actual price, a favorable variance results 
C)  When expected price is equal to actual price, a favorable variance results 
D)  None of these are true statements

Question 8

Standard costs are generally based on:

Accepted Answer

A)  Desired production costs for the period 
B)  The actual production costs for the period 
C)  The sales price expected for the period 
D)  The estimated average production costs for the period 
A)  Desired production costs for the period 
B)  The actual production costs for the period 
C)  The sales price expected for the period 
D)  The estimated average production costs for the period

Question 9

Managers with the most costs to control are found:

Accepted Answer

A)  At the lowest level 
B)  At the middle level 
C)  At the highest level 
D)  Not enough information available 
A)  At the lowest level 
B)  At the middle level 
C)  At the highest level 
D)  Not enough information available

Question 10

A segment margin income statement is a measure of performance in which type of responsibility center?

Accepted Answer

A)  Cost center 
B)  Profit center 
C)  Mail center 
D)  Investment center 
A)  Cost center 
B)  Profit center 
C)  Mail center 
D)  Investment center

Question 11

Matsuma Manufacturing Company uses standard direct labor hours to apply variable manufacturing overhead to Work-in-Process Inventory. The following data were taken from the records:

Accepted Answer

The answer of Matsuma Manufacturing Company uses standard direct labor...

Question 12

Exhibit 19-1 The following information relates to Almira's operations for the month of August:
  
-Refer to Exhibit 19-1. Given the information above, the materials price variance is:

Accepted Answer

A)  $8,800 unfavorable 
B)  $8,800 favorable 
C)  $24,000 unfavorable 
D)  $24,000 favorable 
A)  $8,800 unfavorable 
B)  $8,800 favorable 
C)  $24,000 unfavorable 
D)  $24,000 favorable

Question 13

Exhibit 19-11 The following data is known for Carlin, Inc.:
  Standards:
  Refer to Exhibit 19-11. Using the information above, compute the volume variance for Carlin, Inc.

Accepted Answer

A)  $14,000 favorable 
B)  $14,000 unfavorable 
C)  $18,000 favorable 
D)  $18,000 unfavorable 
A)  $14,000 favorable 
B)  $14,000 unfavorable 
C)  $18,000 favorable 
D)  $18,000 unfavorable

Question 14

Which of the following will cause the ROI to decrease?

Accepted Answer

A)  Decreasing costs 
B)  Decreasing sales 
C)  Decreasing the level of operating assets 
D)  All of these are correct 
A)  Decreasing costs 
B)  Decreasing sales 
C)  Decreasing the level of operating assets 
D)  All of these are correct

Question 15

Medina Sports manufactures snowboards. Medina had budgeted 12.5 direct labor hours per unit and projected that 2,120 units would be produced. The budgeted fixed manufacturing overhead costs were $530,000. The actual overhead costs for the year were $544,000 and 2,150 units were produced. What is the volume variance?

Accepted Answer

A)  $12,000 favorable 
B)  $12,000 unfavorable 
C)  $7,500 favorable 
D)  $7,500 unfavorable 
A)  $12,000 favorable 
B)  $12,000 unfavorable 
C)  $7,500 favorable 
D)  $7,500 unfavorable

Question 16

How can an organization prevent decisions made by a decentralized manager from being inconsistent with the firm's objectives?

Accepted Answer

A)  Have decisions that benefit the entire company be made at the corporate level 
B)  Develop a system of responsibility accounting 
C)  Have top management make all decisions 
D)  Have decisions that benefit the entire company be made at the corporate level and develop a system of responsibility accounting 
A)  Have decisions that benefit the entire company be made at the corporate level 
B)  Develop a system of responsibility accounting 
C)  Have top management make all decisions 
D)  Have decisions that benefit the entire company be made at the corporate level and develop a system of responsibility accounting

Question 17

The difference between the amount of money actually incurred for variable manufacturing overhead and the amount that should have been incurred for the actual activity level achieved, measured in terms of direct labor hours, is:

Accepted Answer

A)  The variable manufacturing overhead efficiency variance 
B)  The variable manufacturing overhead spending variance 
C)  The total variable manufacturing overhead variance 
D)  None of these are correct 
A)  The variable manufacturing overhead efficiency variance 
B)  The variable manufacturing overhead spending variance 
C)  The total variable manufacturing overhead variance 
D)  None of these are correct

Question 18

In a responsibility accounting system, which of the following is true?

Accepted Answer

A)  The manager should be involved in the development of the plan over which the manager has control 
B)  A manager should be held accountable only for the costs, revenues or assets over which the manager has substantial control 
C)  A manager should be given very little autonomy 
D)  The manager should be involved in the development of the plan over which the manager has control and should be held accountable for the costs, revenues, or assets over which the manager has substantial control 
A)  The manager should be involved in the development of the plan over which the manager has control 
B)  A manager should be held accountable only for the costs, revenues or assets over which the manager has substantial control 
C)  A manager should be given very little autonomy 
D)  The manager should be involved in the development of the plan over which the manager has control and should be held accountable for the costs, revenues, or assets over which the manager has substantial control

Question 19

Exhibit 19-2 The following information relates to Bergen Corporation:
 
-Refer to Exhibit 19-2. Based on the information above, the labor efficiency variance is:

Accepted Answer

A)  $1,000 unfavorable 
B)  $1,000 favorable 
C)  $800 unfavorable 
D)  $800 favorable 
A)  $1,000 unfavorable 
B)  $1,000 favorable 
C)  $800 unfavorable 
D)  $800 favorable

Question 20

Which of the following would NOT improve ROI?

Accepted Answer

A)  Decrease costs 
B)  Decrease assets 
C)  Increase revenue 
D)  Increase inventory 
A)  Decrease costs 
B)  Decrease assets 
C)  Increase revenue 
D)  Increase inventory

Exam 19: Controlling Cost and Profit

Which of the following informs management whether units sold were more or less than expected?

The difference between standard hours and actual hours multiplied by the standard rate is the:

Costs that a manager can control are called:

Return on investment is equal to profit margin:

If the budgeted amount for fixed manufacturing overhead is less than the standard hours allowed for the actual output times the standard rate, the result is:

Exhibit 19-5 Ridgeline Corporation has the following operating data for the year: -Refer to Exhibit 19-5. Given the above data for Ridgeline Company, what is the ROI assuming the minimum rate of return on assets is 10%?

Which of the following is a true statement?

Standard costs are generally based on:

Managers with the most costs to control are found:

A segment margin income statement is a measure of performance in which type of responsibility center?

Matsuma Manufacturing Company uses standard direct labor hours to apply variable manufacturing overhead to Work-in-Process Inventory. The following data were taken from the records:

Exhibit 19-1 The following information relates to Almira's operations for the month of August: -Refer to Exhibit 19-1. Given the information above, the materials price variance is:

Exhibit 19-11 The following data is known for Carlin, Inc.: Standards: Refer to Exhibit 19-11. Using the information above, compute the volume variance for Carlin, Inc.

Which of the following will cause the ROI to decrease?

How can an organization prevent decisions made by a decentralized manager from being inconsistent with the firm's objectives?

The difference between the amount of money actually incurred for variable manufacturing overhead and the amount that should have been incurred for the actual activity level achieved, measured in terms of direct labor hours, is:

In a responsibility accounting system, which of the following is true?

Exhibit 19-2 The following information relates to Bergen Corporation: -Refer to Exhibit 19-2. Based on the information above, the labor efficiency variance is:

Which of the following would NOT improve ROI?

Accounting Information: Users and Uses

Financial Statements: An Overview

The Accounting Cycle: The Mechanics of Accounting

Completing the Accounting Cycle

Internal Controls: Ensuring the Integrity of Financial Information

Receivables: Selling a Product or a Service

Inventory and the Cost of Sales

Completing the Operating Cycle

Investments: Property, Plant, and Equipment and Intangible Assets

Financing: Long-Term Liabilities

Financing: Equity

Investments: Debt and Equity Securities

Statement of Cash Flows

Analyzing Financial Statements

Management Accounting and Cost Concepts

Cost Flows and Business Organizations

Activity-Based Costing

Budgeting and Control

Inventory Management and Variable and Absorption Costing

Cost Behavior and Decisions Using C-V-P Analysis

Relevant Information and Decisions

Capital Investment Decisions

New Measures of Performance

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