Question 1

The effect of changes in the total industry sales of the firm's product is measured by:

Accepted Answer

A)  Market mix variance. 
B)  Market share variance. 
C)  Market price variance. 
D)  Market quantity variance. 
E)  Market size variance. 
A)  Market mix variance. 
B)  Market share variance. 
C)  Market price variance. 
D)  Market quantity variance. 
E)  Market size variance.

Question 2

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 market size variance is:

Accepted Answer

A)  $218,450 favorable. 
B)  $33,750 favorable. 
C)  $221,520 favorable. 
D)  $385,104 favorable. 
E)  $426,000 favorable. 
A)  $218,450 favorable. 
B)  $33,750 favorable. 
C)  $221,520 favorable. 
D)  $385,104 favorable. 
E)  $426,000 favorable.

Question 3

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 weighted-average budgeted contribution margin per unit is:

Accepted Answer

A)  $8.90. 
B)  $8.95. 
C)  $10.18. 
D)  $11.36. 
E)  $11.94. 
A)  $8.90. 
B)  $8.95. 
C)  $10.18. 
D)  $11.36. 
E)  $11.94.

Question 4

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 total contribution margin sales volume variance?

Accepted Answer

A)  $0. 
B)  $1,000 favorable. 
C)  $1,000 unfavorable. 
D)  $4,000 favorable. 
E)  $5,000 unfavorable. 
A)  $0. 
B)  $1,000 favorable. 
C)  $1,000 unfavorable. 
D)  $4,000 favorable. 
E)  $5,000 unfavorable.

Question 5

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 selling price variance for Product X is:

Accepted Answer

A)  $0. 
B)  $30,000 unfavorable. 
C)  $30,000 favorable. 
D)  $15,000 favorable. 
E)  $75,000 unfavorable. 
A)  $0. 
B)  $30,000 unfavorable. 
C)  $30,000 favorable. 
D)  $15,000 favorable. 
E)  $75,000 unfavorable.

Question 6

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 H 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 7

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 ET's contribution margin sales volume variance?

Accepted Answer

A)  $15,360 favorable. 
B)  $15,360 unfavorable. 
C)  $24,960 favorable. 
D)  $32,000 unfavorable. 
E)  $16,640 unfavorable. 
A)  $15,360 favorable. 
B)  $15,360 unfavorable. 
C)  $24,960 favorable. 
D)  $32,000 unfavorable. 
E)  $16,640 unfavorable.

Question 8

Efforts to improve productivity should be focused only on:

Accepted Answer

A)  Quality. 
B)  Non-value-added activities. 
C)  Value-added activities. 
D)  Inputs. 
E)  Outputs. 
A)  Quality. 
B)  Non-value-added activities. 
C)  Value-added activities. 
D)  Inputs. 
E)  Outputs.

Question 9

A firm manufactures 5,000 umbrellas per year. The umbrellas cost $25,000 to manufacture. The firm has an annual overhead cost of $5,000. What is the total productivity of manufacturing umbrellas?

Accepted Answer

A)  0.20 umbrellas/dollar 
B)  0.20 dollars/umbrella 
C)  5 umbrellas/dollar 
D)  0.17 dollars/umbrella 
A)  0.20 umbrellas/dollar 
B)  0.20 dollars/umbrella 
C)  5 umbrellas/dollar 
D)  0.17 dollars/umbrella

Question 10

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 market size variance?

Accepted Answer

A)  $10,200 unfavorable. 
B)  $11,000 unfavorable. 
C)  $12,240 unfavorable. 
D)  $13,200 unfavorable. 
E)  $22,000 unfavorable. 
A)  $10,200 unfavorable. 
B)  $11,000 unfavorable. 
C)  $12,240 unfavorable. 
D)  $13,200 unfavorable. 
E)  $22,000 unfavorable.

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 firm's total sales quantity variance for the period is:

Accepted Answer

A)  $16,000 favorable. 
B)  $34,800 favorable. 
C)  $24,660 favorable. 
D)  $30,600 favorable. 
E)  $66,375 favorable. 
A)  $16,000 favorable. 
B)  $34,800 favorable. 
C)  $24,660 favorable. 
D)  $30,600 favorable. 
E)  $66,375 favorable.

Question 12

Dr. Howard Abelson is the director of the Wellness House, a residential center for recovering alcoholics. A typical patient spends 3-4 weeks in an intensive program of rehabilitation. The Wellness House has a staff of 45, including 12 certified therapists, to serve an average patient load of 15. Howard Abelson is attempting to develop some productivity measures for the center, but is not aware of the limitations of productivity measurement in not-for-profit organizations. You have been called in as a consultant to help develop appropriate productivity measures.
Required:
(a) Identify any major differences/limitations you face in developing performance measures for the Wellness House.
(b) Recommend two or three overall measures of productivity that are appropriate for the Wellness House as a not-for-profit organization.

Accepted Answer

(a) Many of the outputs and required tas

Question 13

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 financial productivity of direct labor is:

Accepted Answer

A)  0.20. 
B)  0.25. 
C)  0.40. 
D)  4.00. 
E)  5.00. 
A)  0.20. 
B)  0.25. 
C)  0.40. 
D)  4.00. 
E)  5.00.

Question 14

Hollaway Corp. has the following data for the current fiscal year:  The weighted-average budgeted contribution margin per unit is:

Accepted Answer

A)  $5.15. 
B)  $6.35. 
C)  $6.70. 
D)  $6.80. 
E)  $7.00. 
A)  $5.15. 
B)  $6.35. 
C)  $6.70. 
D)  $6.80. 
E)  $7.00.

Question 15

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 H is:

Accepted Answer

A)  0.20. 
B)  0.55. 
C)  1.82. 
D)  3.33. 
E)  5.00. 
A)  0.20. 
B)  0.55. 
C)  1.82. 
D)  3.33. 
E)  5.00.

Question 16

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 ET's sales quantity variance?

Accepted Answer

A)  $8,000 favorable. 
B)  $8,960 favorable. 
C)  $12,000 favorable. 
D)  $13,440 favorable. 
E)  $24,960 favorable. 
A)  $8,000 favorable. 
B)  $8,960 favorable. 
C)  $12,000 favorable. 
D)  $13,440 favorable. 
E)  $24,960 favorable.

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 selling price variance for Product Y is:

Accepted Answer

A)  $7,500 favorable. 
B)  $25,000 unfavorable. 
C)  $42,500 unfavorable. 
D)  $52,000 favorable. 
E)  $75,000 unfavorable. 
A)  $7,500 favorable. 
B)  $25,000 unfavorable. 
C)  $42,500 unfavorable. 
D)  $52,000 favorable. 
E)  $75,000 unfavorable.

Question 18

Darwin, Inc.provided the following information (round calculations to 2 significant digits): $$\begin{array} { l r l } 
\text { Budgeted production } & 10,000 & \text { units } \
\text { Actual production } & 9,500 & \text { units } \
\text { Budgeted input } & 9,750 & \text { gallons } \
\text { Actual input } & 8,950 & \text { gallons }
\end{array}$$ What is the actual partial productivity ratio?

Accepted Answer

A) 0.97 unit per gallon. 
B) 1.00 units per gallon. 
C) 1.02 units per gallon. 
D) 1.06 units per gallon. 
E) 1.12 units per gallon. 
A) 0.97 unit per gallon. 
B) 1.00 units per gallon. 
C) 1.02 units per gallon. 
D) 1.06 units per gallon. 
E) 1.12 units per gallon.

Question 19

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 nearest whole number.$\begin{array}{lrr} 
& {2018} &{2019} \
\text { Number of phones manufactured } & 600,000 & 780,000 \
\text { Units of DTV-12 used } & 960,000 & 1,072,500 \
\text { Direct labor hours for DTV-12 insertion } & 1,800 & 2,600 \
\text { Total cost of DTV-12 units } & \$ 1,443,750 & \$ 2,333,750\
\text { Direct labor wage rate per hour }&\$67&\$82
\end{array}$The partial direct labor operational productivity ratio for 2018 is:

Accepted Answer

A)  262 units per DLH. 
B)  169 units per DLH. 
C)  428 units per DLH. 
D)  300 units per DLH. 
E)  333 units per DLH. 
A)  262 units per DLH. 
B)  169 units per DLH. 
C)  428 units per DLH. 
D)  300 units per DLH. 
E)  333 units per DLH.

Question 20

Folsom Fashions sells a line of women's dresses. The company uses flexible budgets to analyze its performances. The firm's performance report for November is presented below:  The selling price variance for November is:

Accepted Answer

A)  $15,000 unfavorable. 
B)  $18,000 unfavorable. 
C)  $20,000 unfavorable. 
D)  $30,000 unfavorable. 
E)  $65,000 unfavorable. 
A)  $15,000 unfavorable. 
B)  $18,000 unfavorable. 
C)  $20,000 unfavorable. 
D)  $30,000 unfavorable. 
E)  $65,000 unfavorable.

The effect of changes in the total industry sales of the firm's product is measured by:

Efforts to improve productivity should be focused only on:

A firm manufactures 5,000 umbrellas per year. The umbrellas cost $25,000 to manufacture. The firm has an annual overhead cost of $5,000. What is the total productivity of manufacturing umbrellas?

Hollaway Corp. has the following data for the current fiscal year: The weighted-average budgeted contribution margin per unit is:

Darwin, Inc.provided the following information (round calculations to 2 significant digits): Budgeted production 10,000 units Actual production 9,500 units Budgeted input 9,750 gallons Actual input 8,950 gallons What is the actual partial productivity ratio?

Folsom Fashions sells a line of women's dresses. The company uses flexible budgets to analyze its performances. The firm's performance report for November is presented below: The selling price variance for November 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

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

The effect of changes in the total industry sales of the firm's product is measured by:

Efforts to improve productivity should be focused only on:

A firm manufactures 5,000 umbrellas per year. The umbrellas cost $25,000 to manufacture. The firm has an annual overhead cost of $5,000. What is the total productivity of manufacturing umbrellas?

Hollaway Corp. has the following data for the current fiscal year: The weighted-average budgeted contribution margin per unit is:

Darwin, Inc.provided the following information (round calculations to 2 significant digits): Budgeted production 10,000 units Actual production 9,500 units Budgeted input 9,750 gallons Actual input 8,950 gallons What is the actual partial productivity ratio?

Folsom Fashions sells a line of women's dresses. The company uses flexible budgets to analyze its performances. The firm's performance report for November is presented below: The selling price variance for November 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