Question 1

The total variable cost flexible-budget variance for any given period:

Accepted Answer

A) Is the difference between actual total variable cost incurred and master budgeted total variable cost. 
B) Is decomposable into sales-volume and sales-mix components. 
C) Is decomposable into production-volume and production-mix components. 
D) Can be broken down into flexible-budget variances for major costs such as materials, labor, variable overhead, and variable selling expenses. 
E) Is directly affected by the difference between actual sales volume and the sales volume embodied in the flexible budget. 
A) Is the difference between actual total variable cost incurred and master budgeted total variable cost. 
B) Is decomposable into sales-volume and sales-mix components. 
C) Is decomposable into production-volume and production-mix components. 
D) Can be broken down into flexible-budget variances for major costs such as materials, labor, variable overhead, and variable selling expenses. 
E) Is directly affected by the difference between actual sales volume and the sales volume embodied in the flexible budget.

Question 2

The actual direct labor rate per hour (AP) is:

Accepted Answer

A) $12.00. 
B) $12.30. 
C) $12.60. 
D) $13.20. 
E) $13.50. 
A) $12.00. 
B) $12.30. 
C) $12.60. 
D) $13.20. 
E) $13.50.

Question 3

What was Mandy's direct labor flexible-budget variance for the month?

Accepted Answer

A) $15,120 unfavorable. 
B) $20,800 unfavorable. 
C) $36,720 favorable. 
D) $42,480 favorable. 
E) $79,920 favorable. 
A) $15,120 unfavorable. 
B) $20,800 unfavorable. 
C) $36,720 favorable. 
D) $42,480 favorable. 
E) $79,920 favorable.

Question 4

Rachael Hair Products shows the following budgeted and actual data for the first quarter of the current fiscal year:   Required:
1. What type of financial control system might the company use to determine whether the company met its short-term financial objectives?
2. For the first quarter of the year, what was the total master (static) budget variance?
3. In general, into what two component variances can the master (static) budget variance be decomposed? What is the meaning of each of these two variances?
4. Comment specifically on the financial performance of this company during the 1st quarter.
5. What are the primary limitations of traditional financial-control models?

Accepted Answer

Answer may vary
Feedback: 1. The company

Question 5

Flexible budgets and standard costs are useful for assessing:

Accepted Answer

A) Strategic performance during the most recent period. 
B) Operating performance during the period. 
C) Short-term financial performance. 
D) Management control. 
E) The level of control over basic business processes. 
A) Strategic performance during the most recent period. 
B) Operating performance during the period. 
C) Short-term financial performance. 
D) Management control. 
E) The level of control over basic business processes.

Question 6

A standard cost system should be designed to generate and report cost and revenue variances:

Accepted Answer

A) Coincidental with regular reporting intervals. 
B) As soon as possible. 
C) Only when significant in amount. 
D) Only when negative in impact. 
E) Only when requested by decision-makers. 
A) Coincidental with regular reporting intervals. 
B) As soon as possible. 
C) Only when significant in amount. 
D) Only when negative in impact. 
E) Only when requested by decision-makers.

Question 7

Contemporary furniture manufactures office desks. The firm budgeted to sell 5,000 desks at $200 per desk in 2013. Budgeted costs include $80 variable cost per desk, and $200,000 fixed cost/year. In 2010 the company sold 6,000 desks at $190, and incurred $78 variable cost per desk and $220,000 fixed cost for the year.
Required:
Prepare, in proper form, a variance analysis report identifying both flexible budget and sales-volume variances. Label all component variances as (F) (favorable) or (U) (unfavorable).

Accepted Answer

Answer may

Question 8

What was the average direct labor hourly rate the Division paid in August?

Accepted Answer

A) $24.00. 
B) $26.00. 
C) $28.00. 
D) $30.00. 
E) $31.25. 
A) $24.00. 
B) $26.00. 
C) $28.00. 
D) $30.00. 
E) $31.25.

Question 9

What was the direct labor flexible-budget (FB) variance for the month?

Accepted Answer

A) $20,000 unfavorable. 
B) $25,000 unfavorable. 
C) $37,500 favorable. 
D) $62,500 unfavorable. 
E) $80,000 unfavorablE. 
A) $20,000 unfavorable. 
B) $25,000 unfavorable. 
C) $37,500 favorable. 
D) $62,500 unfavorable. 
E) $80,000 unfavorablE.

Question 10

The total sales revenue in the master budget for September was:

Accepted Answer

A) $300,000. 
B) $327,000. 
C) $350,000. 
D) $375,000. 
E) $425,000. 
A) $300,000. 
B) $327,000. 
C) $350,000. 
D) $375,000. 
E) $425,000.

Question 11

Balmer Corporation's master budget for the year is presented below:   During the period, the company manufactured and sold 42,000 units.
Required:
1. Prepare a flexible budget (FB) for the actual output level achieved during the period.
2. What is the definition of a FB? For what managerial purpose is a FB useful? Be specific about the types of information (and variances) that management can generate, at the end of an accounting period, given a flexible budget and its master (static) budget.

Accepted Answer

Answer may vary
Feedback: 1. Flexible bu

Question 12

Which of the following is not indicated as an advantage of using nonfinancial performance measures, relative to financial performance measures, as part of an operational control system?

Accepted Answer

A) Nonfinancial performance indicators are readily understandable by operating personnel. 
B) Nonfinancial performance indicators can be viewed as drivers of future financial performance. 
C) Nonfinancial performance indicators direct attention to precise problem areas that need attention. 
D) Nonfinancial performance measures are more reliable than financial performance measures. 
A) Nonfinancial performance indicators are readily understandable by operating personnel. 
B) Nonfinancial performance indicators can be viewed as drivers of future financial performance. 
C) Nonfinancial performance indicators direct attention to precise problem areas that need attention. 
D) Nonfinancial performance measures are more reliable than financial performance measures.

Question 13

The amount C is:

Accepted Answer

A) $38,790. 
B) $59,490. 
C) $65,050. 
D) $83,140. 
E) Impossible to determine without further information. 
A) $38,790. 
B) $59,490. 
C) $65,050. 
D) $83,140. 
E) Impossible to determine without further information.

Question 14

Chapter 14 introduces you to the concept of operational control systems. Within the context of this discussion, certain limitations of financial control systems were presented. Provide a summary of the primary limitations of short-term financial performance indicators, such as the variances discussed in the main part of the chapter.

Accepted Answer

Answer may vary
Feedback: As indicated i

Question 15

The direct labor rate variance for December is:

Accepted Answer

A) $1,590 favorable. 
B) $5,650 favorable. 
C) $7,790 unfavorable. 
D) $24,410 unfavorable. 
E) $59,410 unfavorable. 
A) $1,590 favorable. 
B) $5,650 favorable. 
C) $7,790 unfavorable. 
D) $24,410 unfavorable. 
E) $59,410 unfavorable.

Question 16

The direct labor efficiency variance for November is:

Accepted Answer

A) $26,624.00 unfavorable. 
B) $31,948.80 unfavorable. 
C) $39,936.00 favorable. 
D) $71,884.80 favorable. 
E) $103,833.60 favorable. 
A) $26,624.00 unfavorable. 
B) $31,948.80 unfavorable. 
C) $39,936.00 favorable. 
D) $71,884.80 favorable. 
E) $103,833.60 favorable.

Question 17

Differences in expectation levels lead to two basic types of standards in a standard cost system:

Accepted Answer

A) Ideal and real. 
B) Ideal and currently attainable. 
C) Normal and conceptual. 
D) Attainable and real. 
E) Current and future. 
A) Ideal and real. 
B) Ideal and currently attainable. 
C) Normal and conceptual. 
D) Attainable and real. 
E) Current and future.

Question 18

The standard cost per pound of PPS is:

Accepted Answer

A) $5.20. 
B) $5.76. 
C) $6.24. 
D) $6.84. 
E) $7.20. 
A) $5.20. 
B) $5.76. 
C) $6.24. 
D) $6.84. 
E) $7.20.

Question 19

The difference between the flexible-budget operating income and the actual operating income in a period is the:

Accepted Answer

A) Sales mix variance. 
B) Sales volume variance. 
C) Sales price variance. 
D) Operating income flexible-budget variance. 
E) Total operating income variance. 
A) Sales mix variance. 
B) Sales volume variance. 
C) Sales price variance. 
D) Operating income flexible-budget variance. 
E) Total operating income variance.

Question 20

The total amount of variable costs in the flexible budget for September was:

Accepted Answer

A) $129,000. 
B) $192,000. 
C) $200,000. 
D) $208,000. 
E) $255,000. 
A) $129,000. 
B) $192,000. 
C) $200,000. 
D) $208,000. 
E) $255,000.

The total variable cost flexible-budget variance for any given period:

The actual direct labor rate per hour (AP) is:

What was Mandy's direct labor flexible-budget variance for the month?

Flexible budgets and standard costs are useful for assessing:

A standard cost system should be designed to generate and report cost and revenue variances:

What was the average direct labor hourly rate the Division paid in August?

What was the direct labor flexible-budget (FB) variance for the month?

The total sales revenue in the master budget for September was:

Which of the following is not indicated as an advantage of using nonfinancial performance measures, relative to financial performance measures, as part of an operational control system?

The amount C is:

The direct labor rate variance for December is:

The direct labor efficiency variance for November is:

Differences in expectation levels lead to two basic types of standards in a standard cost system:

The standard cost per pound of PPS is:

The difference between the flexible-budget operating income and the actual operating income in a period is the:

The total amount of variable costs in the flexible budget for September was:

Cost Management and Strategy

Implementing Strategy: the Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit Cvp Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters

Exam 14: Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

The total variable cost flexible-budget variance for any given period:

The actual direct labor rate per hour (AP) is:

What was Mandy's direct labor flexible-budget variance for the month?

Flexible budgets and standard costs are useful for assessing:

A standard cost system should be designed to generate and report cost and revenue variances:

What was the average direct labor hourly rate the Division paid in August?

What was the direct labor flexible-budget (FB) variance for the month?

The total sales revenue in the master budget for September was:

Which of the following is not indicated as an advantage of using nonfinancial performance measures, relative to financial performance measures, as part of an operational control system?

The amount C is:

The direct labor rate variance for December is:

The direct labor efficiency variance for November is:

Differences in expectation levels lead to two basic types of standards in a standard cost system:

The standard cost per pound of PPS is:

The difference between the flexible-budget operating income and the actual operating income in a period is the:

The total amount of variable costs in the flexible budget for September was:

Cost Management and Strategy

Implementing Strategy: the Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit Cvp Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters