Question 1

A firm with a declining market share percentage may still earn a higher operating income if the:

Accepted Answer

A)  Market as a whole is also declining. 
B)  Market as a whole is stable. 
C)  Market as a whole is shifting. 
D)  Market as a whole is growing. 
E)  Firm reduces operating costs. 
A)  Market as a whole is also declining. 
B)  Market as a whole is stable. 
C)  Market as a whole is shifting. 
D)  Market as a whole is growing. 
E)  Firm reduces operating costs.

Question 2

Gourmet Aroma Coffee House has an exclusive contract with Columbia exporters. Two brands of gourmet coffee are imported, Morning Thunder (MT) and Evening Tender (ET). The following data are provided for the current fiscal year: The total market was estimated to be 80,000 pounds at the time of budget. The actual total market for the year is 75,000 pounds.
What is the firm's total sales quantity variance?

Accepted Answer

A)  $7,200 favorable. 
B)  $17,760 favorable. 
C)  $22,000 favorable. 
D)  $24,840 favorable. 
E)  $38,560 favorable. 
A)  $7,200 favorable. 
B)  $17,760 favorable. 
C)  $22,000 favorable. 
D)  $24,840 favorable. 
E)  $38,560 favorable.

Question 3

Winston Co. had two products code named X and Y. The firm had the following budget for August:$\begin{array}{lrrr} 
& \text { Product X } & \text { Product Y } & \text { Total } \
\text { Sales } & \$ 286,000 & \$ 520,000 & \$ 806,000 \
\text { Variable Costs } & 189,800 & 218,400 & 408,200\\text { Contribution Margin } & \$ 96,200 & \$ 301,600 & \$ 397,800 \
\text { Fixed costs } & 50,000 & 108,000 & 158,000\\text { Operating Income }&\$46,200&\$193,600&\$239,800\
\text { Selling Price per unit }&\$110.00&\$50.00
\end{array}$

$\text { On September 1, the following actual operating results for August were reported: }$

$\begin{array}{lrrr} 
& \text { Product X } & \text { Product Y } & \text { Total } \
\text { Sales } & \$ 360,000 & \$ 540,000 & \$ 900,000 \
\text { Variable Costs } & 195,000 & 216,000 & 411,000\\text { Contribution Margin } & \$ 165,000 & \$ 324,000 & \$ 489,000 \
\text { Fixed costs } & 50,000 & 108,000 & 158,000 \\text { Operating Income }&\$115,00&\$216,000&\$331,000\\text { Units Sold }&3,000&9,000
\end{array}$Total industry volume for both products X and Y was estimated to be 130,000 units at the time of the budget. Actual industry volume for the period for products X and Y was 100,000 units.
The sales mix variance for Product X is:

Accepted Answer

A)  $22,200 favorable. 
B)  $43,600 unfavorable. 
C)  $43,600 favorable. 
D)  $7,400 unfavorable. 
E)  $23,200 unfavorable. 
A)  $22,200 favorable. 
B)  $43,600 unfavorable. 
C)  $43,600 favorable. 
D)  $7,400 unfavorable. 
E)  $23,200 unfavorable.

Question 4

Which of the following is not an element of a product's sales quantity variance?

Accepted Answer

A)  Budgeted sales mix ratio for the product. 
B)  Budgeted contribution margin per unit of the product. 
C)  Difference in total units of all products between the actual units sold and the units budgeted to be sold. 
D)  Actual sales mix ratio. 
A)  Budgeted sales mix ratio for the product. 
B)  Budgeted contribution margin per unit of the product. 
C)  Difference in total units of all products between the actual units sold and the units budgeted to be sold. 
D)  Actual sales mix ratio.

Question 5

Broha Company manufactured 1,500 units of its only product during 2019. The inputs for this production are as follows:
450 pounds of Material A at a cost of $1.50 per pound
300 pounds of Material H at a cost of $2.75 per pound
300 direct labor hours at $20 per hour
The firm manufactured 1,800 units of the same product in 2018 with the following inputs:
500 pounds of Material A at a cost of $1.20 per pound
360 pounds of Material H at a cost of $2.50 per pound
400 direct labor hours at $18 per hour
Round all calculations to 2 significant digits.
In 2019, the partial operational productivity of Material A is:

Accepted Answer

A)  0.30. 
B)  0.45. 
C)  2.22. 
D)  3.33. 
E)  5.00. 
A)  0.30. 
B)  0.45. 
C)  2.22. 
D)  3.33. 
E)  5.00.

Question 6

Sales volume variances can have significant implications for strategic management. An unfavorable sales volume variance may indicate that:

Accepted Answer

A)  The industry is in decline. 
B)  The company needs a new competitive strategy. 
C)  Product mix changes are favorable but quantity variances are unfavorable. 
D)  Labor productivity needs to be addressed. 
A)  The industry is in decline. 
B)  The company needs a new competitive strategy. 
C)  Product mix changes are favorable but quantity variances are unfavorable. 
D)  Labor productivity needs to be addressed.

Question 7

Broha Company manufactured 1,500 units of its only product during 2019. The inputs for this production are as follows:
450 pounds of Material A at a cost of $1.50 per pound
300 pounds of Material H at a cost of $2.75 per pound
300 direct labor hours at $20 per hour
The firm manufactured 1,800 units of the same product in 2018 with the following inputs:
500 pounds of Material A at a cost of $1.20 per pound
360 pounds of Material H at a cost of $2.50 per pound
400 direct labor hours at $18 per hour
Round all calculations to 2 significant digits.
The partial operational productivity of Material H in 2018 is:

Accepted Answer

A)  0.20. 
B)  0.50. 
C)  2.00. 
D)  5.00. 
E)  6.00. 
A)  0.20. 
B)  0.50. 
C)  2.00. 
D)  5.00. 
E)  6.00.

Question 8

(Budgeted sales mix − actual sales mix) × (total quantity sold) × (budgeted contribution margin per unit of the product) equals:

Accepted Answer

A)  Sales efficiency variance. 
B)  Sales quantity variance. 
C)  Sales price variance. 
D)  Sales mix variance. 
E)  Sales volume variance. 
A)  Sales efficiency variance. 
B)  Sales quantity variance. 
C)  Sales price variance. 
D)  Sales mix variance. 
E)  Sales volume variance.

Question 9

Gutsen Communications Inc. manufactures a scrambling device for cellular phones. The main component of the scrambling device is a very delicate part—DTV-12. DTV-12 requires careful handlings during manufacturing. Once damaged, the part must be discarded. Only skilled laborers are hired to manufacture and install DTV-12. Damages still occur, however. The following are the operating data of Gutsen Communications Inc. for 2018 and 2019 relative to the insertion of DTV-12. Round calculations to 2 significant digits.$\begin{array}{lrr} 
& {2018} &{2019} \
\text { Number of phones manufactured } & 600,000 & 780,000 \
\text { Units of DTV-12 used } & 960,000 & 1,072,500 \
\text { Direct labor hours for DTV-12 insertion } & 1,800 & 2,600 \
\text { Total cost of DTV-12 units } & \$ 1,443,750 & \$ 2,333,750\
\text { Direct labor wage rate per hour }&\$67&\$82
\end{array}$The partial operational productivity ratio of DTV-12 in 2018 is:

Accepted Answer

A)  0.63 per unit. 
B)  0.73 per unit. 
C)  1.92 per unit. 
D)  3.00 per unit. 
E)  3.33 per unit. 
A)  0.63 per unit. 
B)  0.73 per unit. 
C)  1.92 per unit. 
D)  3.00 per unit. 
E)  3.33 per unit.

Question 10

Which one of the following is the result of the [(units sold) × (actual selling price per unit)] − [(units sold) × (budgeted selling price per unit)]:

Accepted Answer

A)  Sales efficiency variance. 
B)  Sales quantity variance. 
C)  Selling price variance. 
D)  Sales mix variance. 
E)  Sales volume variance. 
A)  Sales efficiency variance. 
B)  Sales quantity variance. 
C)  Selling price variance. 
D)  Sales mix variance. 
E)  Sales volume variance.

Question 11

Winston Co. had two products code named X and Y. The firm had the following budget for August:$\begin{array}{lrrr} 
& \text { Product X } & \text { Product Y } & \text { Total } \
\text { Sales } & \$ 286,000 & \$ 520,000 & \$ 806,000 \
\text { Variable Costs } & 189,800 & 218,400 & 408,200\\text { Contribution Margin } & \$ 96,200 & \$ 301,600 & \$ 397,800 \
\text { Fixed costs } & 50,000 & 108,000 & 158,000\\text { Operating Income }&\$46,200&\$193,600&\$239,800\
\text { Selling Price per unit }&\$110.00&\$50.00
\end{array}$

$\text { On September 1, the following actual operating results for August were reported: }$

$\begin{array}{lrrr} 
& \text { Product X } & \text { Product Y } & \text { Total } \
\text { Sales } & \$ 360,000 & \$ 540,000 & \$ 900,000 \
\text { Variable Costs } & 195,000 & 216,000 & 411,000\\text { Contribution Margin } & \$ 165,000 & \$ 324,000 & \$ 489,000 \
\text { Fixed costs } & 50,000 & 108,000 & 158,000 \\text { Operating Income }&\$115,00&\$216,000&\$331,000\\text { Units Sold }&3,000&9,000
\end{array}$Total industry volume for both products X and Y was estimated to be 130,000 units at the time of the budget. Actual industry volume for the period for products X and Y was 100,000 units.

The sales quantity variance for Product Y is:

Accepted Answer

A)  $6,465 favorable. 
B)  $6,750 favorable. 
C)  $33,250 favorable. 
D)  $23,200 unfavorable. 
E)  $78,000 favorable. 
A)  $6,465 favorable. 
B)  $6,750 favorable. 
C)  $33,250 favorable. 
D)  $23,200 unfavorable. 
E)  $78,000 favorable.

Question 12

Wheat Inc. has an exclusive contract with an exporter. Two brands of wheat are imported, labeled AB and CD. The following data are provided for the current fiscal year: 
 
The total market was estimated to 40,000 bushels at the time of budget. The actual total market for the year is 32,000 bushels.
What is the firm's market share variance?

Accepted Answer

A)  $0. 
B)  $560 favorable. 
C)  $8,000 favorable. 
D)  $1,225 favorable. 
E)  $10,500 favorable. 
A)  $0. 
B)  $560 favorable. 
C)  $8,000 favorable. 
D)  $1,225 favorable. 
E)  $10,500 favorable.

Question 13

TV Timers, Inc., manufactures time control devices for TV's. The firm has the following operating data for its operations in July:$\begin{array}{lr}
\text { Actual market size } & 10,000 \
\text { Budgeted market size } & 11,250 \
\text { Actual market share } & 34 \% \
\text { Budgeted market share } & 32 \%\
\text { Budgeted average contribution margin }&\$6\
\text { Actual average contribution margin }&\$5.25
\end{array}$What is the company's market share variance?

Accepted Answer

A)  $1,050 favorable. 
B)  $1,181 favorable. 
C)  $1,200 favorable. 
D)  $1,350 favorable. 
E)  $2,400 favorable. 
A)  $1,050 favorable. 
B)  $1,181 favorable. 
C)  $1,200 favorable. 
D)  $1,350 favorable. 
E)  $2,400 favorable.

Question 14

Broha Company manufactured 1,500 units of its only product during 2019. The inputs for this production are as follows:
450 pounds of Material A at a cost of $1.50 per pound
300 pounds of Material H at a cost of $2.75 per pound
300 direct labor hours at $20 per hour
The firm manufactured 1,800 units of the same product in 2018 with the following inputs:
500 pounds of Material A at a cost of $1.20 per pound
360 pounds of Material H at a cost of $2.50 per pound
400 direct labor hours at $18 per hour
Round all calculations to 2 significant digits.
In 2018, the partial financial productivity of Material A is:

Accepted Answer

A)  0.28. 
B)  0.33. 
C)  3.00. 
D)  3.33. 
E)  3.60. 
A)  0.28. 
B)  0.33. 
C)  3.00. 
D)  3.33. 
E)  3.60.

Question 15

Paquindo Co. has two products: X and Y. The firm had the following budget and operating results for the period just ended. The budgeted total industry sales for both products was 324,800 units and the actual industry sales was 350,000.  Required:
(A) Calculate the contribution margin sales volume variance for Product X.
(B) Calculate the contribution margin sales volume variance for Product Y.
(C) Calculate the sales mix variance for Product X.
(D) Calculate the sales quantity variance for Product X.
(E) Calculate the sales mix variance for Product Y.
(F) Calculate the sales quantity variance for Product Y.
(G) Calculate the market share variance for both products.
(H) Calculate the market size variance for both products.

Accepted Answer

(A) @#IMG-DLM& (B) @#IMG-DLM&

Question 16

Which one of the following uses the number of units of an input factor in its assessment of productivity?

Accepted Answer

A)  Partial financial productivity. 
B)  Total productivity. 
C)  Operational productivity. 
D)  Partial productivity. 
A)  Partial financial productivity. 
B)  Total productivity. 
C)  Operational productivity. 
D)  Partial productivity.

Question 17

Nappon Co. has two products named X and Y. The firm had the following master budget for the year just completed:$\begin{array}{lrrr} 
& \text { Product X } & \text { Product Y } & \text { Total } \
\text { Sales } & \$ 260,000 & \$ 360,000 & \$ 620,000 \
\text { Variable Costs } & 156.000 & 180,000 & 336,000\\text { Contribution Margin } & \$ 104,000 & \$ 180,000 & \$ 284,000 \
\text { Fixed costs } & 130,000 & 108,000 & 238,000\\text { Operating Income (Loss) }&\$(26,000)&\$72,000&\$46,000\\text { Selling Price per unit }&\$130.00&\$60.00
\end{array}$

$\text { The following actual operating results were reported after the year was over: }$

$\begin{array}{lrrr} 
& \text { Product X } & \text { Product Y } & \text { Total } \
\text { Sales } & \$ 202,500 & \$ 467,500 & \$ 670,000 \
\text { Variable Costs } & 117.000 & 212,500 & 329,500\\text { Contribution Margin } & \$ 85,500 & \$ 255,000 & \$ 340,500 \
\text { Fixed costs } & 140,000 & 108,000 & 248,000\\text { Operating Income (Loss) } & \$(54,500) & \$ 147,000 & \$ 92,500\\text { Units Sold } & 1,500 & 8,500
\end{array}$The sales quantity variance for Product Y is:

Accepted Answer

A)  $4,000 favorable. 
B)  $25,000 favorable. 
C)  $26,000 favorable. 
D)  $45,000 favorable. 
E)  $52,000 unfavorable. 
A)  $4,000 favorable. 
B)  $25,000 favorable. 
C)  $26,000 favorable. 
D)  $45,000 favorable. 
E)  $52,000 unfavorable.

Question 18

Winston Co. had two products code named X and Y. The firm had the following budget for August:$\begin{array}{lrrr} 
& \text { Product X } & \text { Product Y } & \text { Total } \
\text { Sales } & \$ 286,000 & \$ 520,000 & \$ 806,000 \
\text { Variable Costs } & 189,800 & 218,400 & 408,200\\text { Contribution Margin } & \$ 96,200 & \$ 301,600 & \$ 397,800 \
\text { Fixed costs } & 50,000 & 108,000 & 158,000\\text { Operating Income }&\$46,200&\$193,600&\$239,800\
\text { Selling Price per unit }&\$110.00&\$50.00
\end{array}$

$\text { On September 1, the following actual operating results for August were reported: }$

$\begin{array}{lrrr} 
& \text { Product X } & \text { Product Y } & \text { Total } \
\text { Sales } & \$ 360,000 & \$ 540,000 & \$ 900,000 \
\text { Variable Costs } & 195,000 & 216,000 & 411,000\\text { Contribution Margin } & \$ 165,000 & \$ 324,000 & \$ 489,000 \
\text { Fixed costs } & 50,000 & 108,000 & 158,000 \\text { Operating Income }&\$115,00&\$216,000&\$331,000\\text { Units Sold }&3,000&9,000
\end{array}$Total industry volume for both products X and Y was estimated to be 130,000 units at the time of the budget. Actual industry volume for the period for products X and Y was 100,000 units.

The weighted-average budgeted contribution margin per unit is:

Accepted Answer

A)  $19.95. 
B)  $35.50. 
C)  $30.60. 
D)  $40.00. 
E)  $77.50. 
A)  $19.95. 
B)  $35.50. 
C)  $30.60. 
D)  $40.00. 
E)  $77.50.

Question 19

Jackson, Inc., manufactures two products that it sells to the same market. Excerpted below are its budgeted and actual operating results for the year just completed: Industry volume was estimated to be 1,875,000 units at the time the budget was prepared. Actual industry volume for the period was 2,440,000 units. Jackson measures variances using contribution margin.

The total contribution margin sales volume variance of the period is:

Accepted Answer

A)  $5,800 favorable. 
B)  $36,400 unfavorable. 
C)  $48,000 unfavorable. 
D)  $63,950 unfavorable. 
E)  $107,920 favorable. 
A)  $5,800 favorable. 
B)  $36,400 unfavorable. 
C)  $48,000 unfavorable. 
D)  $63,950 unfavorable. 
E)  $107,920 favorable.

Question 20

Duo, Inc., carries two products and has the following year-end income statement (000s omitted):  The sales quantity variance that would complement the variance calculated in the previous question is:

Accepted Answer

A)  $480 favorable. 
B)  $507 favorable. 
C)  $560 favorable. 
D)  $960 favorable. 
E)  $1,040 favorable. 
A)  $480 favorable. 
B)  $507 favorable. 
C)  $560 favorable. 
D)  $960 favorable. 
E)  $1,040 favorable.

A firm with a declining market share percentage may still earn a higher operating income if the:

Which of the following is not an element of a product's sales quantity variance?

Sales volume variances can have significant implications for strategic management. An unfavorable sales volume variance may indicate that:

(Budgeted sales mix − actual sales mix) × (total quantity sold) × (budgeted contribution margin per unit of the product) equals:

Which one of the following is the result of the [(units sold) × (actual selling price per unit)] − [(units sold) × (budgeted selling price per unit)]:

Which one of the following uses the number of units of an input factor in its assessment of productivity?

Duo, Inc., carries two products and has the following year-end income statement (000s omitted): The sales quantity variance that would complement the variance calculated in the previous question is:

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: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

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

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 16: Operational Performance Measurement: Further Analysis of Productivity and Sales

A firm with a declining market share percentage may still earn a higher operating income if the:

Which of the following is not an element of a product's sales quantity variance?

Sales volume variances can have significant implications for strategic management. An unfavorable sales volume variance may indicate that:

(Budgeted sales mix − actual sales mix) × (total quantity sold) × (budgeted contribution margin per unit of the product) equals:

Which one of the following is the result of the [(units sold) × (actual selling price per unit)] − [(units sold) × (budgeted selling price per unit)]:

Which one of the following uses the number of units of an input factor in its assessment of productivity?

Duo, Inc., carries two products and has the following year-end income statement (000s omitted): The sales quantity variance that would complement the variance calculated in the previous question is:

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: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

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

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