Question 1

What was the direct materials price variance for July?

Accepted Answer

A) $1,500 favorable. 
B) $3,000 unfavorable. 
C) $3,000 favorable. 
D) $7,500 unfavorable. 
E) $7,500 favorable. 
A) $1,500 favorable. 
B) $3,000 unfavorable. 
C) $3,000 favorable. 
D) $7,500 unfavorable. 
E) $7,500 favorable.

Question 2

The actual total cost of direct materials used in production during July was:

Accepted Answer

A) $282,150. 
B) $287,850. 
C) $297,000. 
D) $300,000. 
E) $303,000. 
A) $282,150. 
B) $287,850. 
C) $297,000. 
D) $300,000. 
E) $303,000.

Question 3

A "standard cost" is a predetermined amount (e.g., cost) that:

Accepted Answer

A) Should be incurred under relatively efficient operating conditions. 
B) Will be incurred for an operation or a specific objective. 
C) Must occur for an operation or a specific objective. 
D) Cannot be changed once it is established by management. 
E) Is useful for planning and control but not inventory valuation purposes. 
A) Should be incurred under relatively efficient operating conditions. 
B) Will be incurred for an operation or a specific objective. 
C) Must occur for an operation or a specific objective. 
D) Cannot be changed once it is established by management. 
E) Is useful for planning and control but not inventory valuation purposes.

Question 4

The amount D is:

Accepted Answer

A) $26,920. 
B) $33,720. 
C) $35,620. 
D) $42,450. 
E) Impossible to determine without further information. 
A) $26,920. 
B) $33,720. 
C) $35,620. 
D) $42,450. 
E) Impossible to determine without further information.

Question 5

The sales volume variance in terms of operating income is:

Accepted Answer

A) $500 favorable. 
B) $1,500 unfavorable. 
C) $1,500 favorable. 
D) $2,500 unfavorable. 
E) $3,000 favorable. 
A) $500 favorable. 
B) $1,500 unfavorable. 
C) $1,500 favorable. 
D) $2,500 unfavorable. 
E) $3,000 favorable.

Question 6

The direct labor efficiency variance for December is:

Accepted Answer

A) $1,590 favorable. 
B) $5,650 favorable. 
C) $7,240 unfavorable. 
D) $59,410 unfavorable. 
A) $1,590 favorable. 
B) $5,650 favorable. 
C) $7,240 unfavorable. 
D) $59,410 unfavorable.

Question 7

The amount B is:

Accepted Answer

A) $100,300. 
B) $102,000. 
C) $103,440. 
D) $105,600. 
A) $100,300. 
B) $102,000. 
C) $103,440. 
D) $105,600.

Question 8

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 9

Balt Company maintains a standard cost system; as such, all inventories, including materials, are carried on the books at standard cost. Last period, Balt used 5,000 pounds of Material H to produce 800 units of Product C8. The company has established a standard of 7 pounds of Material H per unit of C8, at a price of $7.50 per pound of material. During the period the inventory for Material H decreased by 2,000 pounds. The company spent $25,000 during the period to purchase material H.
Required:
1. Calculate the direct materials purchase-price variance for the period.
2. Calculate the direct materials usage variance for the period.
3. Provide the correct summary journal entry to record the purchase, on credit, of materials during the period.
4. Provide the correct summary journal to record direct materials cost for materials issued to production during the period.

Accepted Answer

Answer may

Question 10

The budgeted fixed cost is:

Accepted Answer

A) $30,000. 
B) $45,000. 
C) $71,000. 
D) $78,000. 
E) $93,000. 
A) $30,000. 
B) $45,000. 
C) $71,000. 
D) $78,000. 
E) $93,000.

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

Prokp's standard direct labor rate per hour (SP) in April was:

Accepted Answer

A) $16.00. 
B) $18.00. 
C) $20.00. 
D) $24.00. 
E) $26.67. 
A) $16.00. 
B) $18.00. 
C) $20.00. 
D) $24.00. 
E) $26.67.

Question 13

The amount E is:

Accepted Answer

A) $61,500. 
B) $76,500. 
C) $79,500. 
D) $88,500. 
E) $91,500. 
A) $61,500. 
B) $76,500. 
C) $79,500. 
D) $88,500. 
E) $91,500.

Question 14

What four variances may be included as a component of the total variable cost flexible-budget variance for a given period?

Accepted Answer

Answer may vary
Feedback: The total vari

Question 15

Operational control systems can be distinguished from financial control systems:

Accepted Answer

A) In the time horizon: financial-control systems have a long-term perspective. 
B) Because they focus on the control of basic business processes. 
C) Because such systems rely on the use of flexible, not static, budgets. 
D) Because they focus on explaining the total operating income variance for a period. 
E) Because they do not include nonfinancial performance indicators. 
A) In the time horizon: financial-control systems have a long-term perspective. 
B) Because they focus on the control of basic business processes. 
C) Because such systems rely on the use of flexible, not static, budgets. 
D) Because they focus on explaining the total operating income variance for a period. 
E) Because they do not include nonfinancial performance indicators.

Question 16

Customer response time (CRT) can be defined as:

Accepted Answer

A) The time lapse between when a customer places an order and when that order is delivered to the customer. 
B) Wait time + manufacturing time. 
C) Manufacturing lead time + production cycle time. 
D) Receipt time + delivery time. 
E) Manufacturing lead time less delivery time. 
A) The time lapse between when a customer places an order and when that order is delivered to the customer. 
B) Wait time + manufacturing time. 
C) Manufacturing lead time + production cycle time. 
D) Receipt time + delivery time. 
E) Manufacturing lead time less delivery time.

Question 17

The direct labor rate variance for October was:

Accepted Answer

A) $3,000 unfavorable. 
B) $20,000 favorable. 
C) $23,000 favorable. 
D) $30,000 unfavorable. 
E) $50,000 unfavorable. 
A) $3,000 unfavorable. 
B) $20,000 favorable. 
C) $23,000 favorable. 
D) $30,000 unfavorable. 
E) $50,000 unfavorable.

Question 18

Sarheen, Inc. maintains no inventories and has collected the following data on one of its products for the most recent period:   Required:
Determine:
1. The direct material usage (quantity) variance.
2. The actual cost of the direct materials purchased and used during the period. (Hint: these two amounts are identical.)
3. The direct material price variance.
4. The correct summary journal entry to record direct material costs for this period's production, including associated standard cost variances. (Note: assume that any price variances are recorded at point of production.)

Accepted Answer

Answer may

Question 19

The direct labor flexible-budget variance 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 20

What was the actual purchase price (AP) per set of direct materials purchased?

Accepted Answer

A) $3.35. 
B) $3.40. 
C) $3.72. 
D) $3.80. 
E) $3.85. 
A) $3.35. 
B) $3.40. 
C) $3.72. 
D) $3.80. 
E) $3.85.

What was the direct materials price variance for July?

The actual total cost of direct materials used in production during July was:

A "standard cost" is a predetermined amount (e.g., cost) that:

The amount D is:

The sales volume variance in terms of operating income is:

The direct labor efficiency variance for December is:

The amount B is:

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 budgeted fixed cost is:

Prokp's standard direct labor rate per hour (SP) in April was:

The amount E is:

What four variances may be included as a component of the total variable cost flexible-budget variance for a given period?

Operational control systems can be distinguished from financial control systems:

Customer response time (CRT) can be defined as:

The direct labor rate variance for October was:

The direct labor flexible-budget variance is:

What was the actual purchase price (AP) per set of direct materials purchased?

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

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

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

What was the direct materials price variance for July?

The actual total cost of direct materials used in production during July was:

A "standard cost" is a predetermined amount (e.g., cost) that:

The amount D is:

The sales volume variance in terms of operating income is:

The direct labor efficiency variance for December is:

The amount B is:

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 budgeted fixed cost is:

Prokp's standard direct labor rate per hour (SP) in April was:

The amount E is:

What four variances may be included as a component of the total variable cost flexible-budget variance for a given period?

Operational control systems can be distinguished from financial control systems:

Customer response time (CRT) can be defined as:

The direct labor rate variance for October was:

The direct labor flexible-budget variance is:

What was the actual purchase price (AP) per set of direct materials purchased?

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

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