Question 1

In a flexible budget ________.

Accepted Answer

A)  variable costs are calculated proportionately for the budgeted level of sales 
B)  fixed costs are calculated proportionately for the actual level of sales 
C)  fixed costs are kept at the same level of static budget 
D)  variable costs are kept at the same level of static budget 
A)  variable costs are calculated proportionately for the budgeted level of sales 
B)  fixed costs are calculated proportionately for the actual level of sales 
C)  fixed costs are kept at the same level of static budget 
D)  variable costs are kept at the same level of static budget

Question 2

The term for understanding why actual performance deviates from planned performance is.

Accepted Answer

A)  variance calculation 
B)  organizational learning 
C)  favorable variance 
D)  continuous improvement 
A)  variance calculation 
B)  organizational learning 
C)  favorable variance 
D)  continuous improvement

Question 3

Benchmarking is a process ________.

Accepted Answer

A)  in which overhead costs are absorbed into units of output, or 'jobs' 
B)  in which a firm's performance levels are compared against the best levels of performance in competing companies or in companies having similar processes 
C)  which is based on calculating the breakeven point and analyzing the consequences of changes in various factors calculating the breakeven point 
D)  in which the underlying processes of an organization is optimized using a systematic approach to achieve more efficient goals 
A)  in which overhead costs are absorbed into units of output, or 'jobs' 
B)  in which a firm's performance levels are compared against the best levels of performance in competing companies or in companies having similar processes 
C)  which is based on calculating the breakeven point and analyzing the consequences of changes in various factors calculating the breakeven point 
D)  in which the underlying processes of an organization is optimized using a systematic approach to achieve more efficient goals

Question 4

A master budget is ________.

Accepted Answer

A)  a budget which starts from a zero base 
B)  based on the level of expected output at the start of the budget period 
C)  developed at the end of a period 
D)  a type of flexible budget once actual results are known 
A)  a budget which starts from a zero base 
B)  based on the level of expected output at the start of the budget period 
C)  developed at the end of a period 
D)  a type of flexible budget once actual results are known

Question 5

Mid City Products Inc. (MCP), developed standard costs for direct material and direct labor. In 2017, MCP estimated the following standard costs for one of their most popular products.
 
During September, MCP produced and sold 1,000 units using 1,300 pounds of direct materials at an average cost per pound of $5.00 and 480 direct labor hours at an average wage of $13.15 per hour.
September's direct material flexible-budget variance is ________.

Accepted Answer

A)  $400 unfavorable 
B)  $120 favorable 
C)  $1,100 unfavorable 
D)  $520 favorable 
A)  $400 unfavorable 
B)  $120 favorable 
C)  $1,100 unfavorable 
D)  $520 favorable

Question 6

Genent Industries, Inc. (GII), developed standard costs for direct material and direct labor. In 2017, GII estimated the following standard costs for one of their major products, the 30-gallon heavy-duty plastic container.
 
During July, GII produced and sold 4,000 containers using 2,700 pounds of direct materials at an average cost per pound of $19 and 1,290 direct manufacturing labor hours at an average wage of $14.30 per hour.
The direct manufacturing labor flexible-budget variance during July is ________.

Accepted Answer

A)  $1,260.00 unfavorable 
B)  $900.00 favorable 
C)  $1,647.00 unfavorable 
D)  $3,300.00 favorable 
A)  $1,260.00 unfavorable 
B)  $900.00 favorable 
C)  $1,647.00 unfavorable 
D)  $3,300.00 favorable

Question 7

Goodard Inc. planned to use $156 of material per unit but actually used $141 of material per unit, and planned to make 1,150 units but actually made 920 units.
The flexible-budget variance for materials is ________.

Accepted Answer

A)  $13,800 favorable 
B)  $13,800 unfavorable 
C)  $17,250 unfavorable 
D)  $17,250 favorable 
A)  $13,800 favorable 
B)  $13,800 unfavorable 
C)  $17,250 unfavorable 
D)  $17,250 favorable

Question 8

The following data for the telephone company pertain to the production of 450 rolls of telephone wire during June. Selected items are omitted because the costing records were lost in a windstorm.
Direct Materials (All materials purchased were used.)

Required:
Compute the missing elements in the report represented by the lettered items

Accepted Answer

a.	Standard cost per roll	= $9,000/450 =

Question 9

Mid City Products Inc. (MCP), developed standard costs for direct material and direct labor. In 2017, MCP estimated the following standard costs for one of their most popular products.
 
During September, MCP produced and sold 2,000 units using 12,400 pounds of direct materials at an average cost per pound of $4.00 and 950 direct labor hours at an average wage of $15.15 per hour.
The direct labor price variance during September is ________.

Accepted Answer

A)  $750.00 unfavorable 
B)  $150.00 favorable 
C)  $142.50 unfavorable 
D)  $142.50 favorable 
A)  $750.00 unfavorable 
B)  $150.00 favorable 
C)  $142.50 unfavorable 
D)  $142.50 favorable

Question 10

The actual information pertains to the month of June. As a part of the budgeting process, Great Cabinets Company developed the following static budget for June. Great Cabinets is in the process of preparing the flexible budget and understanding the results.
 
The flexible-budget variance for variable costs is ________.

Accepted Answer

A)  $2,210 unfavorable 
B)  $202,275 unfavorable 
C)  $89,270 favorable 
D)  $137,930 favorable 
A)  $2,210 unfavorable 
B)  $202,275 unfavorable 
C)  $89,270 favorable 
D)  $137,930 favorable

Question 11

Goodard Inc. planned to use $153 of material per unit but actually used $140 of material per unit, and planned to make 1,100 units but actually made 940 units.
The flexible-budget amount for materials is ________.

Accepted Answer

A)  $168,300 
B)  $143,820 
C)  $154,000 
D)  $131,600 
A)  $168,300 
B)  $143,820 
C)  $154,000 
D)  $131,600

Question 12

Direct material price variance is likely to be unfavorable if the purchasing manager switched to a lower-price supplier.

Accepted Answer

A) True 
 B)False

Question 13

Nancy's Draperies manufactures curtains. A certain window curtain requires the following:
Direct materials standard10 square yards at $5 per yard
Direct manufacturing labor standard5 hours at $10
During the second quarter, the company made 1,500 curtains and used 14,000 square yards of fabric costing $72,000. Direct labor totaled 7,600 hours for $83,600.
Required:
a.Compute the direct materials price and efficiency variances for the quarter.
b.Compute the direct manufacturing labor price and efficiency variances for the quarter.

Accepted Answer

The answer of Nancy's Draperies manufactures curtains. A certain window...

Question 14

Jalbert Incorporated planned to use materials of $9 per unit but actually used materials of $14 per unit, and planned to make 1,640 units but actually made 1,770 units.
The sales-volume variance for materials is ________.

Accepted Answer

A)  $1,170 unfavorable 
B)  $1,820 unfavorable 
C)  $1,170 favorable 
D)  $1,820 favorable 
A)  $1,170 unfavorable 
B)  $1,820 unfavorable 
C)  $1,170 favorable 
D)  $1,820 favorable

Question 15

The actual information pertains to the third quarter. As part of the budgeting process, the Duck Decoy Department of Paralith Incorporated had developed the following static budget for the third quarter. Duck Decoy is in the process of preparing the flexible budget and understanding the results.
 
The flexible budget will report ________ for variable costs.

Accepted Answer

A)  $101,933 
B)  $250,909 
C)  $45,000 
D)  $184,000 
A)  $101,933 
B)  $250,909 
C)  $45,000 
D)  $184,000

Question 16

The following data for the Panoid Garden Supplies Company pertains to the production of 2,000 garden spades during March. The spade consists of a wooden handle and a metal forged tool that comes in contact with the ground.
Direct Materials (all materials purchased were used):
Standard cost: $1.00 per handle and $3.00 per metal tool.
Total actual cost: $9,000.
Materials flexible-budget efficiency variance was $500 unfavorable.
Direct Manufacturing Labor:
Standard cost is 5 garden spades per hour at $20.00 per hour.
Actual cost per hour was $21.00.
Labor efficiency variance was $500 favorable.
Required:
a.What is the standard direct material amount per garden spade?
b.What is the standard cost allowed for all units produced?
c.What is the total direct materials flexible-budget variance?
d.What is the direct material flexible-budget price variance?
e.What is the total actual cost of direct manufacturing labor?
f.What is the labor price variance for direct manufacturing labor?

Accepted Answer

a.11ecb4bf_8f9a_c208_8164_95db085843bb_T

Question 17

The flexible-budget variance for direct cost inputs can be further subdivided into a ________.

Accepted Answer

A)  static-budget variance and a sales-volume variance 
B)  sales-volume variance and an efficiency variance 
C)  price variance and an efficiency variance 
D)  static-budget variance and a price variance 
A)  static-budget variance and a sales-volume variance 
B)  sales-volume variance and an efficiency variance 
C)  price variance and an efficiency variance 
D)  static-budget variance and a price variance

Question 18

Management by exception is a practice whereby managers focus more closely on ________.

Accepted Answer

A)  variances in the larger departments 
B)  areas not operating as anticipated and less closely on areas that are operating as anticipated 
C)  activity-based budgeting 
D)  unfavorable variances 
A)  variances in the larger departments 
B)  areas not operating as anticipated and less closely on areas that are operating as anticipated 
C)  activity-based budgeting 
D)  unfavorable variances

Question 19

The actual information pertains to the month of June. As a part of the budgeting process, Great Cabinets Company developed the following static budget for June. Great Cabinets is in the process of preparing the flexible budget and understanding the results.
 
The flexible budget will report ________ for variable costs.

Accepted Answer

A)  $592,774 
B)  $460,000 
C)  $363,060 
D)  $463,910 
A)  $592,774 
B)  $460,000 
C)  $363,060 
D)  $463,910

Question 20

An unfavorable flexible-budget variance for variable costs may be the result of ________.

Accepted Answer

A)  using more input quantities than were budgeted 
B)  paying lower prices for inputs than were budgeted 
C)  selling output at a higher selling price than budgeted 
D)  selling less quantity compared to the budgeted 
A)  using more input quantities than were budgeted 
B)  paying lower prices for inputs than were budgeted 
C)  selling output at a higher selling price than budgeted 
D)  selling less quantity compared to the budgeted

In a flexible budget ________.

The term for understanding why actual performance deviates from planned performance is.

Benchmarking is a process ________.

A master budget is ________.

Goodard Inc. planned to use $156 of material per unit but actually used $141 of material per unit, and planned to make 1,150 units but actually made 920 units. The flexible-budget variance for materials is ________.

Goodard Inc. planned to use $153 of material per unit but actually used $140 of material per unit, and planned to make 1,100 units but actually made 940 units. The flexible-budget amount for materials is ________.

Direct material price variance is likely to be unfavorable if the purchasing manager switched to a lower-price supplier.

Jalbert Incorporated planned to use materials of $9 per unit but actually used materials of $14 per unit, and planned to make 1,640 units but actually made 1,770 units. The sales-volume variance for materials is ________.

The flexible-budget variance for direct cost inputs can be further subdivided into a ________.

Management by exception is a practice whereby managers focus more closely on ________.

An unfavorable flexible-budget variance for variable costs may be the result of ________.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, Just-in-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters

Exam 7: Flexible Budgets, Direct-Cost Variances, and Management Control

In a flexible budget ________.

The term for understanding why actual performance deviates from planned performance is.

Benchmarking is a process ________.

A master budget is ________.

Goodard Inc. planned to use $156 of material per unit but actually used $141 of material per unit, and planned to make 1,150 units but actually made 920 units. The flexible-budget variance for materials is ________.

Goodard Inc. planned to use $153 of material per unit but actually used $140 of material per unit, and planned to make 1,100 units but actually made 940 units. The flexible-budget amount for materials is ________.

Direct material price variance is likely to be unfavorable if the purchasing manager switched to a lower-price supplier.

Jalbert Incorporated planned to use materials of $9 per unit but actually used materials of $14 per unit, and planned to make 1,640 units but actually made 1,770 units. The sales-volume variance for materials is ________.

The flexible-budget variance for direct cost inputs can be further subdivided into a ________.

Management by exception is a practice whereby managers focus more closely on ________.

An unfavorable flexible-budget variance for variable costs may be the result of ________.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, Just-in-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters