Question 1

A favorable wage rate variance for direct labor might indicate that:

Accepted Answer

A) employees were paid less than planned. 
B) fewer skilled employees are available in the market. 
C) less skilled and qualified employees are being hired. 
D) an efficient labor force. 
A) employees were paid less than planned. 
B) fewer skilled employees are available in the market. 
C) less skilled and qualified employees are being hired. 
D) an efficient labor force. A

Question 2

The best label for the formula [(AP)× (AQ)- (SP)× (SQ)] is the:

Accepted Answer

A) materials quantity variance. 
B) materials price variance. 
C) total cost variance for materials. 
D) labor efficiency variance. 
A) materials quantity variance. 
B) materials price variance. 
C) total cost variance for materials. 
D) labor efficiency variance. C

Question 3

The ________ provides the foundation for the materials purchasing plan.

Accepted Answer

A) inventory policy 
B) sales plan 
C) production plan 
D) capital spending plan 
A) inventory policy 
B) sales plan 
C) production plan 
D) capital spending plan B

Question 4

Which of the following statements is TRUE regarding capacity resources?

Accepted Answer

A) Raw materials and supplies are examples of intermediate-term resources. 
B) Long-term capacity usually varies directly with production levels. 
C) Flexible resources are usually purchased to acquire intermediate-term capacity. 
D) Long-term capacity resources are expensive and referred to as "committed" resources. 
A) Raw materials and supplies are examples of intermediate-term resources. 
B) Long-term capacity usually varies directly with production levels. 
C) Flexible resources are usually purchased to acquire intermediate-term capacity. 
D) Long-term capacity resources are expensive and referred to as "committed" resources.

Question 5

________ is the process of varying key estimates to identify those estimates that are the most critical to a decision.

Accepted Answer

A) A demand forecast 
B) A sensitivity analysis 
C) A pro forma income statement 
D) The cash flow statement 
A) A demand forecast 
B) A sensitivity analysis 
C) A pro forma income statement 
D) The cash flow statement

Question 6

What is budgeting? What is its role?

Accepted Answer

Budgeting is the process of preparing bu

Question 7

The variance that LEAST affects cost control is the ________ variance.

Accepted Answer

A) flexible budget 
B) direct material price 
C) planning 
D) direct labor efficiency 
A) flexible budget 
B) direct material price 
C) planning 
D) direct labor efficiency

Question 8

When discussing the roles of budgets,a control role includes:

Accepted Answer

A) identifying organizational objectives and short-term goals. 
B) developing long-term strategies and short-term plans. 
C) measuring and assessing performance against budgeted amounts. 
D) developing the master budget. 
A) identifying organizational objectives and short-term goals. 
B) developing long-term strategies and short-term plans. 
C) measuring and assessing performance against budgeted amounts. 
D) developing the master budget.

Question 9

For the next quarter,Charter Manufacturing projects the following information (in units).
   
Demand drives production for that month and cannot be carried over from one month to another. Retail customers are satisfied first.
Required:
a. Prepare a schedule that shows the number of retail and dealer units to be made and sold each month.
b. Review the above information and comment on your observations. What suggestions do you have for Charter Manufacturing?

Accepted Answer

a. @#IMG-DLM& 
b. During August and September, pai

Question 10

Talladega Industries, Inc., (TII) developed the following standard costs for direct material and direct labor for one of their major products, the 10-gallon plastic container.
   
During August, TII produced and sold 10,000 containers using 980 pounds of direct materials at an average cost per pound of $32 and 500 direct labor hours at an average wage of $15.25 per hour.
-August's direct labor efficiency variance was:

Accepted Answer

A) $125 unfavorable. 
B) $125 favorable. 
C) $142,375 favorable. 
D) None of the above is correct. 
A) $125 unfavorable. 
B) $125 favorable. 
C) $142,375 favorable. 
D) None of the above is correct.

Question 11

Financial budgets include the:

Accepted Answer

A) capital spending plan. 
B) production plan. 
C) labor hiring and training plan. 
D) expected cash flow statement. 
A) capital spending plan. 
B) production plan. 
C) labor hiring and training plan. 
D) expected cash flow statement.

Question 12

Describe operating and financial budgets and give at least two examples of each that are discussed in the textbook.

Accepted Answer

Operating budgets specify the expected o

Question 13

Assume that only the specified parameters change in a sensitivity analysis.The contribution margin ratio increases when:

Accepted Answer

A) total capacity-related (fixed)costs increase. 
B) total capacity-related (fixed)costs decrease. 
C) flexible (variable)costs per unit increase. 
D) flexible (variable)costs per unit decrease. 
A) total capacity-related (fixed)costs increase. 
B) total capacity-related (fixed)costs decrease. 
C) flexible (variable)costs per unit increase. 
D) flexible (variable)costs per unit decrease.

Question 14

An organization planned to use $44 of material per unit of activity but it actually used $42 of material per unit of activity,and it planned to make 1,200 units but it actually made 1,000 units.The flexible budget amount for materials is:

Accepted Answer

A) $42,000. 
B) $44,000. 
C) $48,000. 
D) $49,400. 
A) $42,000. 
B) $44,000. 
C) $48,000. 
D) $49,400.

Question 15

In which order are the following developed? 
A = Production plan 
B = Materials purchasing plan
C = Demand forecast 
D = Sales plan

Accepted Answer

A) first to last: A, B, C, D 
B) first to last: C, D, A, B 
C) first to last: D, C, B, A 
D) first to last: C,A,D,B 
A) first to last: A, B, C, D 
B) first to last: C, D, A, B 
C) first to last: D, C, B, A 
D) first to last: C,A,D,B

Question 16

A favorable cost variance of significant magnitude:

Accepted Answer

A) is the result of good planning. 
B) may lead to improved production methods if it is investigated. 
C) indicates that management does not need to be concerned about lax standards. 
D) does not need to be investigated. 
A) is the result of good planning. 
B) may lead to improved production methods if it is investigated. 
C) indicates that management does not need to be concerned about lax standards. 
D) does not need to be investigated.

Question 17

Community Manufacturing Inc. developed the following standard costs for direct material and direct labor for one of their major products, the 30-gallon heavy-duty plastic container.
   
During May, Community produced and sold 10,000 containers using 2,200 pounds of direct materials at an average cost per pound of $24 and 1,050 direct labor hours at an average wage of $14.75 per hour.
-May's direct labor planning variance was:

Accepted Answer

A) $134,512.50 favorable. 
B) $ 487.50 favorable. 
C) $ 487.50 unfavorable. 
D) indeterminable using the above information. 
A) $134,512.50 favorable. 
B) $ 487.50 favorable. 
C) $ 487.50 unfavorable. 
D) indeterminable using the above information.

Question 18

All of the following are true of flexible budgets EXCEPT that they:

Accepted Answer

A) use the same flexible (variable)cost per unit as the master budget. 
B) result in higher total costs for greater levels of production. 
C) allow comparison of actual results to targets based on the achieved level of production. 
D) reflect the same level of production as the master budget. 
A) use the same flexible (variable)cost per unit as the master budget. 
B) result in higher total costs for greater levels of production. 
C) allow comparison of actual results to targets based on the achieved level of production. 
D) reflect the same level of production as the master budget.

Question 19

When discussing the roles of budgets,a planning role in the budgeting process includes:

Accepted Answer

A) measuring outcomes against planned amounts. 
B) developing the master budget. 
C) assessing performance. 
D) reporting actual amounts at the end of the budgeting period. 
A) measuring outcomes against planned amounts. 
B) developing the master budget. 
C) assessing performance. 
D) reporting actual amounts at the end of the budgeting period.

Question 20

Talladega Industries, Inc., (TII) developed the following standard costs for direct material and direct labor for one of their major products, the 10-gallon plastic container.
   
During August, TII produced and sold 10,000 containers using 980 pounds of direct materials at an average cost per pound of $32 and 500 direct labor hours at an average wage of $15.25 per hour.
-August's direct material cost variance was:

Accepted Answer

A) $1,960 unfavorable. 
B) $600 favorable. 
C) $1,360 unfavorable. 
D) None of the above is correct. 
A) $1,960 unfavorable. 
B) $600 favorable. 
C) $1,360 unfavorable. 
D) None of the above is correct.

A favorable wage rate variance for direct labor might indicate that:

The best label for the formula [(AP)× (AQ)- (SP)× (SQ)] is the:

The ________ provides the foundation for the materials purchasing plan.

Which of the following statements is TRUE regarding capacity resources?

________ is the process of varying key estimates to identify those estimates that are the most critical to a decision.

What is budgeting? What is its role?

The variance that LEAST affects cost control is the ________ variance.

When discussing the roles of budgets,a control role includes:

Financial budgets include the:

Describe operating and financial budgets and give at least two examples of each that are discussed in the textbook.

Assume that only the specified parameters change in a sensitivity analysis.The contribution margin ratio increases when:

An organization planned to use $44 of material per unit of activity but it actually used $42 of material per unit of activity,and it planned to make 1,200 units but it actually made 1,000 units.The flexible budget amount for materials is:

In which order are the following developed? A = Production plan B = Materials purchasing plan C = Demand forecast D = Sales plan

A favorable cost variance of significant magnitude:

All of the following are true of flexible budgets EXCEPT that they:

When discussing the roles of budgets,a planning role in the budgeting process includes:

How Management Accounting Information Supports Decision Making

The Balanced Scorecard and Strategy Map

Using Costs in Decision Making

Accumulating and Assigning Costs to Products

Activity-Based Cost Systems

Measuring and Managing Customer Relationships

Measuring and Managing Process Performance

Measuring and Managing Life-Cycle Costs

Behavioral and Organizational Issues in Management Accounting and Control Systems

Financial Control

Filters

Exam 10: Using Budgets for Planning and Coordination

A favorable wage rate variance for direct labor might indicate that:

The best label for the formula [(AP)× (AQ)- (SP)× (SQ)] is the:

The ________ provides the foundation for the materials purchasing plan.

Which of the following statements is TRUE regarding capacity resources?

________ is the process of varying key estimates to identify those estimates that are the most critical to a decision.

What is budgeting? What is its role?

The variance that LEAST affects cost control is the ________ variance.

When discussing the roles of budgets,a control role includes:

Financial budgets include the:

Describe operating and financial budgets and give at least two examples of each that are discussed in the textbook.

Assume that only the specified parameters change in a sensitivity analysis.The contribution margin ratio increases when:

An organization planned to use $44 of material per unit of activity but it actually used $42 of material per unit of activity,and it planned to make 1,200 units but it actually made 1,000 units.The flexible budget amount for materials is:

In which order are the following developed? A = Production plan B = Materials purchasing plan C = Demand forecast D = Sales plan

A favorable cost variance of significant magnitude:

All of the following are true of flexible budgets EXCEPT that they:

When discussing the roles of budgets,a planning role in the budgeting process includes:

How Management Accounting Information Supports Decision Making

The Balanced Scorecard and Strategy Map

Using Costs in Decision Making

Accumulating and Assigning Costs to Products

Activity-Based Cost Systems

Measuring and Managing Customer Relationships

Measuring and Managing Process Performance

Measuring and Managing Life-Cycle Costs

Behavioral and Organizational Issues in Management Accounting and Control Systems

Financial Control

Filters