Question 1

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

Accepted Answer

A)  $500 favorable 
B)  $500 unfavorable 
C)  $1,500 favorable 
D)  $1,500 unfavorable 
A)  $500 favorable 
B)  $500 unfavorable 
C)  $1,500 favorable 
D)  $1,500 unfavorable

Question 2

Exhibit 19-3 The following information relates to Lamb Company:
  
-Refer to Exhibit 19-3. Given the information above, the actual labor hours were:

Accepted Answer

A)  356,040 hours 
B)  357,300 hours 
C)  362,700 hours 
D)  360,000 hours 
A)  356,040 hours 
B)  357,300 hours 
C)  362,700 hours 
D)  360,000 hours

Question 3

The report which highlights variances from budget is the:

Accepted Answer

A)  Production report 
B)  Performance report 
C)  Exception report 
D)  Cost sheet 
A)  Production report 
B)  Performance report 
C)  Exception report 
D)  Cost sheet

Question 4

Which of the following is NOT a benefit of decentralization?

Accepted Answer

A)  More timely decisions can be made 
B)  Lower-level managers become more involved in strategic planning 
C)  Managers can be evaluated more accurately 
D)  Sub-unit managers have incentives to perform well 
A)  More timely decisions can be made 
B)  Lower-level managers become more involved in strategic planning 
C)  Managers can be evaluated more accurately 
D)  Sub-unit managers have incentives to perform well

Question 5

Which variance compares actual inputs used at actual and standard prices?

Accepted Answer

A)  Price variance 
B)  Quantity variance 
C)  Usage variance 
D)  None of these are correct 
A)  Price variance 
B)  Quantity variance 
C)  Usage variance 
D)  None of these are correct

Question 6

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

Accepted Answer

A)  $885 unfavorable 
B)  $885 favorable 
C)  $585 unfavorable 
D)  $585 favorable 
A)  $885 unfavorable 
B)  $885 favorable 
C)  $585 unfavorable 
D)  $585 favorable

Question 7

Determine the appropriate variable manufacturing overhead rate using the following information:

Accepted Answer

A)  $6.00 per direct labor hour 
B)  $12.00 per direct labor hour 
C)  $15.16 per direct labor hour 
D)  $30.33 per direct labor hour 
A)  $6.00 per direct labor hour 
B)  $12.00 per direct labor hour 
C)  $15.16 per direct labor hour 
D)  $30.33 per direct labor hour

Question 8

Exhibit 19-4 The following information relates to St. Jean Industries:
 
- Refer to Exhibit 19-4. Based on the information above, the sales price variance is:

Accepted Answer

A)  $750 unfavorable 
B)  $750 favorable 
C)  $270 unfavorable 
D)  $270 favorable 
A)  $750 unfavorable 
B)  $750 favorable 
C)  $270 unfavorable 
D)  $270 favorable

Question 9

To prevent quantity variances from being influenced by price changes, which is used?

Accepted Answer

A)  Standard quantity 
B)  Actual price 
C)  Standard price 
D)  None of these are used 
A)  Standard quantity 
B)  Actual price 
C)  Standard price 
D)  None of these are used

Question 10

Segment managers are generally NOT concerned with:

Accepted Answer

A)  Controllable costs 
B)  Variable direct costs 
C)  Fixed direct costs 
D)  Indirect costs 
A)  Controllable costs 
B)  Variable direct costs 
C)  Fixed direct costs 
D)  Indirect costs

Question 11

Walnut Company has sales of $1,000,000 and total expenses of $900,000. If operating assets are $500,000, and a minimum required return of 15%, the residual income is:

Accepted Answer

A)  $400,000 
B)  $100,000 
C)  $50,000 
D)  $25,000 
A)  $400,000 
B)  $100,000 
C)  $50,000 
D)  $25,000

Question 12

Exhibit 19-2 The following information relates to Bergen Corporation:
 
-Refer to Exhibit 19-2. Based on the information above, the journal entry to record the labor costs and variances for Bergen Corporation would include a debit to:

Accepted Answer

A)  Work-in-process inventory for $48,000 
B)  Labor rate variance for $885 
C)  Labor efficiency variance for $800 
D)  Wages payable for $46,315 
A)  Work-in-process inventory for $48,000 
B)  Labor rate variance for $885 
C)  Labor efficiency variance for $800 
D)  Wages payable for $46,315

Question 13

Which of the following informs management whether actual sales prices were higher or lower 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

Question 14

Exhibit 19-4 The following information relates to St. Jean Industries:
 
- Refer to Exhibit 19-4. Based on the information above, the sales volume variance is:

Accepted Answer

A)  $750 unfavorable 
B)  $750 favorable 
C)  $225 unfavorable 
D)  $225 favorable 
A)  $750 unfavorable 
B)  $750 favorable 
C)  $225 unfavorable 
D)  $225 favorable

Question 15

If the budgeted amount for fixed manufacturing overhead is greater 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 16

The labor efficiency variance is the difference between the:

Accepted Answer

A)  Standard labor rate and the actual labor rate multiplied by the actual labor hours 
B)  Standard labor rate and the actual labor rate multiplied by the standard hours 
C)  Actual labor hours and the standard labor hours multiplied by the actual labor rate 
D)  Actual labor hours and the standard labor hours multiplied by the standard rate 
A)  Standard labor rate and the actual labor rate multiplied by the actual labor hours 
B)  Standard labor rate and the actual labor rate multiplied by the standard hours 
C)  Actual labor hours and the standard labor hours multiplied by the actual labor rate 
D)  Actual labor hours and the standard labor hours multiplied by the standard rate

Question 17

In which of the following is a manager responsible for only costs?

Accepted Answer

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

Question 18

Compute the missing data items, (a) through (f), in the following table:

Accepted Answer

The answer of Compute the missing data items, (a) through...

Question 19

Exhibit 19-3 The following information relates to Lamb Company:
 
- Refer to Exhibit 19-3. Given the information above, the standard labor cost per unit is:

Accepted Answer

A)  $2,500 
B)  $3,600 
C)  $7,200 
D)  $14,400 
A)  $2,500 
B)  $3,600 
C)  $7,200 
D)  $14,400

Question 20

A segment margin income statement typically includes all of the following EXCEPT:

Accepted Answer

A)  Controllable costs 
B)  Direct variable costs 
C)  Direct fixed costs 
D)  Opportunity costs 
A)  Controllable costs 
B)  Direct variable costs 
C)  Direct fixed costs 
D)  Opportunity costs

Exam 19: Controlling Cost and Profit

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

Exhibit 19-3 The following information relates to Lamb Company: -Refer to Exhibit 19-3. Given the information above, the actual labor hours were:

The report which highlights variances from budget is the:

Which of the following is NOT a benefit of decentralization?

Which variance compares actual inputs used at actual and standard prices?

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

Determine the appropriate variable manufacturing overhead rate using the following information:

Exhibit 19-4 The following information relates to St. Jean Industries: - Refer to Exhibit 19-4. Based on the information above, the sales price variance is:

To prevent quantity variances from being influenced by price changes, which is used?

Segment managers are generally NOT concerned with:

Walnut Company has sales of $1,000,000 and total expenses of $900,000. If operating assets are $500,000, and a minimum required return of 15%, the residual income is:

Exhibit 19-2 The following information relates to Bergen Corporation: -Refer to Exhibit 19-2. Based on the information above, the journal entry to record the labor costs and variances for Bergen Corporation would include a debit to:

Which of the following informs management whether actual sales prices were higher or lower than expected?

Exhibit 19-4 The following information relates to St. Jean Industries: - Refer to Exhibit 19-4. Based on the information above, the sales volume variance is:

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

The labor efficiency variance is the difference between the:

In which of the following is a manager responsible for only costs?

Compute the missing data items, (a) through (f), in the following table:

Exhibit 19-3 The following information relates to Lamb Company: - Refer to Exhibit 19-3. Given the information above, the standard labor cost per unit is:

A segment margin income statement typically includes all of the following EXCEPT:

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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