Question 1

Give at least three good reasons why an unfavorable efficiency variance for direct manufacturing labor might be reported.

Accepted Answer

Any three of the following:
a.More lower

Question 2

Answer the following questions using the information below:
These questions refer to flexible-budget variance formulas with the following descriptions for the variables: A = Actual; B = Budgeted; P = Price; Q = Quantity.
-Which variance is calculated using the formula (AQ - BQ) BP is the ________.

Accepted Answer

A)  efficiency variance 
B)  price variance 
C)  total flexible-budget variance 
D)  spending variance 
A)  efficiency variance 
B)  price variance 
C)  total flexible-budget variance 
D)  spending variance

Question 3

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 1,700 pounds of direct materials at an average cost per pound of $15 and 3,225 direct manufacturing labor hours at an average wage of $15.25 per hour.
The direct material price variance during July is ________.

Accepted Answer

A)  $20,000 unfavorable 
B)  $8,500 favorable 
C)  $8,500 unfavorable 
D)  $2,000 unfavorable 
A)  $20,000 unfavorable 
B)  $8,500 favorable 
C)  $8,500 unfavorable 
D)  $2,000 unfavorable

Question 4

Jalbert Incorporated planned to use materials of $11 per unit but actually used materials of $13 per unit, and planned to make 1,590 units but actually made 1,780 units.
The flexible-budget variance for materials is ________.

Accepted Answer

A)  $3,180 favorable 
B)  $3,560 unfavorable 
C)  $3,180 unfavorable 
D)  $3,560 favorable 
A)  $3,180 favorable 
B)  $3,560 unfavorable 
C)  $3,180 unfavorable 
D)  $3,560 favorable

Question 5

A variance within an acceptable range is considered to be an "in-control occurrence" and calls for no investigation or action by managers.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following items will be same for a flexible budget and a master budget?

Accepted Answer

A)  total variable cost 
B)  total expected fixed costs 
C)  total contribution margin 
D)  total expected revenues 
A)  total variable cost 
B)  total expected fixed costs 
C)  total contribution margin 
D)  total expected revenues

Question 7

When actual revenues exceed budgeted revenues, a favorable variance arises.

Accepted Answer

A) True 
 B)False

Question 8

Mayberry Company had the following journal entries recorded for the end of June. Unfortunately, the company's only accountant quit on July 10 and the president is at a loss as to the company's performance for the month of June.
   
Required:
a.What kind of performance did the company have for June? Explain each variance.
b.Why is Direct Materials given in two entries?

Accepted Answer

a.The first entry is for materials purch

Question 9

Midend's Camera Shop has prepared the following flexible budget for September and is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance.
 
The actual amount spent for Material B was ________.

Accepted Answer

A)  $38,600 
B)  $37,800 
C)  $40,200 
D)  $39,400 
A)  $38,600 
B)  $37,800 
C)  $40,200 
D)  $39,400

Question 10

Littrell Company produces chairs and has determined the following direct cost categories and budgeted amounts:
   
Required:
a.What is the combined total of the flexible-budget variances?
b.What is the price variance of the direct materials?
c.What is the price variance of the direct manufacturing labor and the direct marketing labor, respectively?
d.What is the efficiency variance for direct materials?
e.What are the efficiency variances for direct manufacturing labor and direct marketing labor, respectively?

Accepted Answer

@#IMG-DLM& 
c.Manufacturing Labor ($9.25 - $9.00)

Question 11

Which of the following is the correct formula for the materials price variance?

Accepted Answer

A)  (Actual price of input - Budgeted price of input) x Budgeted quantity of input 
B)  (Actual quantity of input used - Budgeted quantity of input allowed for actual output) x Budgeted price of input 
C)  (Actual price of input - Budgeted price of input) x Actual quantity of input 
D)  (Actual quantity of input used - Budgeted quantity of input allowed for actual output) x Actual price of input 
A)  (Actual price of input - Budgeted price of input) x Budgeted quantity of input 
B)  (Actual quantity of input used - Budgeted quantity of input allowed for actual output) x Budgeted price of input 
C)  (Actual price of input - Budgeted price of input) x Actual quantity of input 
D)  (Actual quantity of input used - Budgeted quantity of input allowed for actual output) x Actual price of input

Question 12

The actual information pertains to the third quarter. As part of the budgeting process, the controller for Foley Manufacturing had developed the following static budget for the third quarter. The company is in the process of preparing the flexible budget and understanding the results.
 
The primary reason for high actual operating profits was ________.

Accepted Answer

A)  the variable-cost variance 
B)  increased fixed costs 
C)  flexible budget variance for revenues 
D)  lower sales volume than planned 
A)  the variable-cost variance 
B)  increased fixed costs 
C)  flexible budget variance for revenues 
D)  lower sales volume than planned

Question 13

Better Products Inc. planned to use $40 of material per unit but actually used $30 of material per unit, and planned to make 1,560 units but actually made 1,310 units.
The sales-volume variance for materials is ________.

Accepted Answer

A)  $10,000 favorable 
B)  $10,000 unfavorable 
C)  $7,500 unfavorable 
D)  $7,500 favorable 
A)  $10,000 favorable 
B)  $10,000 unfavorable 
C)  $7,500 unfavorable 
D)  $7,500 favorable

Question 14

Management by exception is the practice of concentrating on areas not operating as anticipated (such as a cost overrun) and placing less attention on areas operating as anticipated.

Accepted Answer

A) True 
 B)False

Question 15

These questions refer to flexible-budget variance formulas with the following descriptions for the variables: A = Actual; B = Budgeted; P = Price; Q = Quantity. The best label for the formula [(AP)(AQ) - (BP)(BQ)] is the ________.

Accepted Answer

A)  efficiency variance. 
B)  price variance 
C)  total flexible-budget variance 
D)  spending variance 
A)  efficiency variance. 
B)  price variance 
C)  total flexible-budget variance 
D)  spending variance

Question 16

The flexible budget contains ________.

Accepted Answer

A)  budgeted amounts for actual output 
B)  static budget amounts for planned output 
C)  actual costs for actual output 
D)  actual costs for planned output 
A)  budgeted amounts for actual output 
B)  static budget amounts for planned output 
C)  actual costs for actual output 
D)  actual costs for planned output

Question 17

Which of the following is the correct formula for the materials price variance?

Accepted Answer

A)  (Actual price of input - Budgeted price of input) x Budgeted quantity of input 
B)  (Actual quantity of input used - Budgeted quantity of input allowed for actual output) x Budgeted price of input 
C)  (Actual price of input - Budgeted price of input) x Actual quantity of input 
D)  (Actual quantity of input used - Budgeted quantity of input allowed for actual output) x Actual price of input 
A)  (Actual price of input - Budgeted price of input) x Budgeted quantity of input 
B)  (Actual quantity of input used - Budgeted quantity of input allowed for actual output) x Budgeted price of input 
C)  (Actual price of input - Budgeted price of input) x Actual quantity of input 
D)  (Actual quantity of input used - Budgeted quantity of input allowed for actual output) x Actual price of input

Question 18

Handley Manufacturing Company has prepared the following flexible budget for August and is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance.
 
The actual amount spent for direct manufacturing labor was ________.

Accepted Answer

A)  $88,000 
B)  $91,100 
C)  $89,300 
D)  $86,700 
A)  $88,000 
B)  $91,100 
C)  $89,300 
D)  $86,700

Question 19

Possible operational causes of an unfavorable direct materials efficiency variance include poor design of products or processes.

Accepted Answer

A) True 
 B)False

Question 20

If variance analysis is used for performance evaluation, managers are encouraged to meet targets using creativity and resourcefulness.

Accepted Answer

A) True 
 B)False

Give at least three good reasons why an unfavorable efficiency variance for direct manufacturing labor might be reported.

Answer the following questions using the information below: These questions refer to flexible-budget variance formulas with the following descriptions for the variables: A = Actual; B = Budgeted; P = Price; Q = Quantity. -Which variance is calculated using the formula (AQ - BQ) BP is the ________.

Jalbert Incorporated planned to use materials of $11 per unit but actually used materials of $13 per unit, and planned to make 1,590 units but actually made 1,780 units. The flexible-budget variance for materials is ________.

A variance within an acceptable range is considered to be an "in-control occurrence" and calls for no investigation or action by managers.

Which of the following items will be same for a flexible budget and a master budget?

When actual revenues exceed budgeted revenues, a favorable variance arises.

Midend's Camera Shop has prepared the following flexible budget for September and is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance. The actual amount spent for Material B was ________.

Which of the following is the correct formula for the materials price variance?

Better Products Inc. planned to use $40 of material per unit but actually used $30 of material per unit, and planned to make 1,560 units but actually made 1,310 units. The sales-volume variance for materials is ________.

Management by exception is the practice of concentrating on areas not operating as anticipated (such as a cost overrun) and placing less attention on areas operating as anticipated.

These questions refer to flexible-budget variance formulas with the following descriptions for the variables: A = Actual; B = Budgeted; P = Price; Q = Quantity. The best label for the formula [(AP)(AQ) - (BP)(BQ)] is the ________.

The flexible budget contains ________.

Which of the following is the correct formula for the materials price variance?

Handley Manufacturing Company has prepared the following flexible budget for August and is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance. The actual amount spent for direct manufacturing labor was ________.

Possible operational causes of an unfavorable direct materials efficiency variance include poor design of products or processes.

If variance analysis is used for performance evaluation, managers are encouraged to meet targets using creativity and resourcefulness.

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

Give at least three good reasons why an unfavorable efficiency variance for direct manufacturing labor might be reported.

Answer the following questions using the information below: These questions refer to flexible-budget variance formulas with the following descriptions for the variables: A = Actual; B = Budgeted; P = Price; Q = Quantity. -Which variance is calculated using the formula (AQ - BQ) BP is the ________.

Jalbert Incorporated planned to use materials of $11 per unit but actually used materials of $13 per unit, and planned to make 1,590 units but actually made 1,780 units. The flexible-budget variance for materials is ________.

A variance within an acceptable range is considered to be an "in-control occurrence" and calls for no investigation or action by managers.

Which of the following items will be same for a flexible budget and a master budget?

When actual revenues exceed budgeted revenues, a favorable variance arises.

Midend's Camera Shop has prepared the following flexible budget for September and is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance. The actual amount spent for Material B was ________.

Which of the following is the correct formula for the materials price variance?

Better Products Inc. planned to use $40 of material per unit but actually used $30 of material per unit, and planned to make 1,560 units but actually made 1,310 units. The sales-volume variance for materials is ________.

Management by exception is the practice of concentrating on areas not operating as anticipated (such as a cost overrun) and placing less attention on areas operating as anticipated.

These questions refer to flexible-budget variance formulas with the following descriptions for the variables: A = Actual; B = Budgeted; P = Price; Q = Quantity. The best label for the formula [(AP)(AQ) - (BP)(BQ)] is the ________.

The flexible budget contains ________.

Which of the following is the correct formula for the materials price variance?

Handley Manufacturing Company has prepared the following flexible budget for August and is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance. The actual amount spent for direct manufacturing labor was ________.

Possible operational causes of an unfavorable direct materials efficiency variance include poor design of products or processes.

If variance analysis is used for performance evaluation, managers are encouraged to meet targets using creativity and resourcefulness.

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