Question 1

The two factors that determine the costs of manufacturing inputs (materials,labor,and overhead)are price and quantity.

Accepted Answer

A) True 
 B)False

Question 2

The sales volume variance is favorable if actual sales volume is higher than the budgeted.

Accepted Answer

A) True 
 B)False

Question 3

Which manager is usually held responsible for materials price variances?

Accepted Answer

A)  Plant manager 
B)  Purchasing agent 
C)  Production supervisor 
D)  Marketing manager 
A)  Plant manager 
B)  Purchasing agent 
C)  Production supervisor 
D)  Marketing manager

Question 4

Indicate whether each of the following statements is

Accepted Answer

The difference between the actual fixed

Question 5

Indicate whether each of the following statements is

Accepted Answer

A flexible budget can be viewed as an ex

Question 6

Hurst Company's standard variable materials cost per unit was $8.The actual materials cost per unit on production of 10,000 units was $8.22.Based on this information,Hurst Company incurred an unfavorable variable materials price variance of $2,200.

Accepted Answer

A) True 
 B)False

Question 7

The differences between the standard and actual amounts are called variances.

Accepted Answer

A) True 
 B)False

Question 8

Indicate whether each of the following statements is

Accepted Answer

Managerial performance can be evaluated

Question 9

The Broaddus Company has requested a performance report that reports both sales activity variances and flexible budget variances.The following table of information is provided: \(\begin{array}{c}
\begin{array}{|l|}
\hline \text { Column(1) } \
\hline \
\hline \
\hline \text { Number of units } \
\hline \
\hline \text { Seles } \
\hline \text { Less variable costs: } \
\hline \text { Materials } \
\hline \text { Labor } \
\hline \text { Overhead } \
\hline \text { Selling \& admin. } \
\hline \text { Contribution margin } \
\hline \text { Less fixed costs: } \
\hline \text { Manufacturing } \
\hline \text { Selling \& admin } \
\hline \text { Net income } \
\hline 
\end{array}
\begin{array}{c|}
\hline \text { (2) } \
\hline \text { Static } \
\hline \text { Budget } \
\hline 8,600 \
\hline\
\hline \$ 430,000 \
\hline\
\hline 103,200 \
\hline 77,400\
\hline 43,000 \
\hline 17,200 \
\hline \$ 189,200 \
\hline \ 
\hline 18,000 \
\hline 37,0010 \
\hline \$ 134,200 \
\hline
\end{array}
\begin{array}{c|}
\hline \text { (3) } \
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline
\end{array}
\begin{array}{c|}
\hline \text { (4) } \
\hline\text { F}/\
\hline\text {U}\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline
\end{array}
\begin{array}{c|}
\hline \text { (5) } \
\hline \text { Flexible } \
\hline \text { Budget } \
\hline9,000 \
\hline\
\hline \$ 450,000 \
\hline\
\hline 108,000 \
\hline81,000 \
\hline 45,000 \
\hline 18,000 \
\hline \$ 198,000 \
\hline \ 
\hline 18,000 \
\hline 37,000 \
\hline \$ 143,000 \
\hline
\end{array}
\begin{array}{c|}
\hline \text { (6) } \
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline 
\end{array}
\begin{array}{c|}
\hline \text { (7) } \
\hline\text { F}/\
\hline\text {U}\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline
\end{array}
\begin{array}{l|}
\hline \text { (8) }\
\hline \text { Actual } \
\hline \text { Results } \
\hline 9,000 \
\hline\
\hline \$ 460,000 \
\hline\
\hline 113,000 \
\hline 88,000 \
\hline 44,000 \
\hline 20,000 \
\hline \$ 195,000 \
\hline\
\hline 16,000 \
\hline 38,000 \
\hline \$ 141,000 \
\hline
\end{array}
\end{array}\)
 Required:
1)Compute and enter variances in columns 3 and 6.In column 3,enter the variance (difference)between column 2 and column 5;in column 4,label the variance as favorable (F)or unfavorable (U).In column 6,enter the variance between columns 5 and 8,and in column 7 indicate whether this variance is favorable or unfavorable.
2)Which column contains sales volume variances,and which column contains flexible budget variances?
3)Comment on this company's performance.

Accepted Answer

1)  
 2)The sales volume variances are i

Question 10

Which of the following statements is true?

Accepted Answer

A)  An unfavorable materials price variance could have resulted from actions taken by the purchasing agent. 
B)  An unfavorable materials usage variance could have resulted from actions taken by the production supervisor. 
C)  An unfavorable labor usage variance could have resulted from actions taken by the personnel department. 
D)  All of these answers are correct. 
A)  An unfavorable materials price variance could have resulted from actions taken by the purchasing agent. 
B)  An unfavorable materials usage variance could have resulted from actions taken by the production supervisor. 
C)  An unfavorable labor usage variance could have resulted from actions taken by the personnel department. 
D)  All of these answers are correct.

Question 11

Which of the following statements is incorrect?

Accepted Answer

A)  In deciding whether to investigate a variance,managers should not consider the materiality of the variance. 
B)  A material variance is one that will influence stockholders' investment decisions. 
C)  The primary advantage of a standard cost system is to price products consistently. 
D)  None of these answers is correct. 
A)  In deciding whether to investigate a variance,managers should not consider the materiality of the variance. 
B)  A material variance is one that will influence stockholders' investment decisions. 
C)  The primary advantage of a standard cost system is to price products consistently. 
D)  None of these answers is correct.

Question 12

Kokko Company makes a product that is expected to require 2 hours of labor per unit of product.The standard cost of labor is $6.00.Kokko actually used 2.1 hours of labor per unit of product.The actual cost of labor was $6.25 per hour.Kokko made 1,100 units of product during the period.Based on this information alone,the labor usage variance is:

Accepted Answer

A)  $190 favorable. 
B)  $660 unfavorable. 
C)  $600 favorable. 
D)  $660 favorable. 
A)  $190 favorable. 
B)  $660 unfavorable. 
C)  $600 favorable. 
D)  $660 favorable.

Question 13

Hickam Company makes one product,for which it has developed the following standard for labor: each unit should require 1.50 hours at $12/hour.In April,Hickam made 10,000 units,using 1.65 hours per unit at a cost of $11.50 per hour.
Required:
(a)Determine the total labor variance and indicate whether it is favorable or unfavorable.
(b)Determine the labor price variance and indicate whether it is favorable or unfavorable.
(c)Determine the labor usage variance and indicate whether it is favorable or unfavorable.

Accepted Answer

(a)Total labor variance = (15,000 hours

Question 14

How do differences between planned and actual volume impact companies that use a cost plus pricing strategy?

Accepted Answer

Answers will vary
When a company uses a

Question 15

The sales volume variance is the difference between sales revenue on the static budget and sales revenue on the flexible budget.

Accepted Answer

A) True 
 B)False

Question 16

Sanchez Company established a direct materials standard of 4 pounds at $4.50 per pound for one of its products.During March,Sanchez purchased 15,000 pounds at $4.42 per pound.
Required:
Based on this information,
(a)Which variance can you calculate?
(b)What is the dollar amount of the variance?
(c)Is the variance favorable or unfavorable?
(d)Do you consider the variance to be sufficiently material that managers should investigate to discover the cause of the variance?

Accepted Answer

(a)Materials price variance
(b)Material

Question 17

Which of the following reason(s)cause flexible budgets to be useful planning tools?

Accepted Answer

A)  Flexible budgets allow managers to anticipate results under a variety of scenarios. 
B)  Flexible budgets can help determine if a company's cash position is adequate. 
C)  Flexible budgets can help managers judge if materials and storage facilities are appropriate for various production levels. 
D)  All of these answers are correct. 
A)  Flexible budgets allow managers to anticipate results under a variety of scenarios. 
B)  Flexible budgets can help determine if a company's cash position is adequate. 
C)  Flexible budgets can help managers judge if materials and storage facilities are appropriate for various production levels. 
D)  All of these answers are correct.

Question 18

Indicate whether each of the following statements is

Accepted Answer

A variance is a difference between an ex

Question 19

Which manager is normally held responsible for fixed cost volume variances?

Accepted Answer

A)  Production supervisor 
B)  Upper level marketing managers 
C)  Plant manager 
D)  Purchasing agent 
A)  Production supervisor 
B)  Upper level marketing managers 
C)  Plant manager 
D)  Purchasing agent

Question 20

Select the correct statement from the following,assuming Carmichael Company had a favorable direct materials price variance of $3,000 and an unfavorable direct materials usage variance of $2,000.

Accepted Answer

A)  The total direct materials variance is $1,000 unfavorable. 
B)  The total direct materials variance is $5,000 favorable. 
C)  The total direct materials variance is $5,000 unfavorable. 
D)  The total direct materials variance is $1,000 favorable. 
A)  The total direct materials variance is $1,000 unfavorable. 
B)  The total direct materials variance is $5,000 favorable. 
C)  The total direct materials variance is $5,000 unfavorable. 
D)  The total direct materials variance is $1,000 favorable.

The two factors that determine the costs of manufacturing inputs (materials,labor,and overhead)are price and quantity.

The sales volume variance is favorable if actual sales volume is higher than the budgeted.

Which manager is usually held responsible for materials price variances?

Indicate whether each of the following statements is

Indicate whether each of the following statements is

Hurst Company's standard variable materials cost per unit was $8.The actual materials cost per unit on production of 10,000 units was $8.22.Based on this information,Hurst Company incurred an unfavorable variable materials price variance of $2,200.

The differences between the standard and actual amounts are called variances.

Indicate whether each of the following statements is

Which of the following statements is true?

Which of the following statements is incorrect?

How do differences between planned and actual volume impact companies that use a cost plus pricing strategy?

The sales volume variance is the difference between sales revenue on the static budget and sales revenue on the flexible budget.

Which of the following reason(s)cause flexible budgets to be useful planning tools?

Indicate whether each of the following statements is

Which manager is normally held responsible for fixed cost volume variances?

Select the correct statement from the following,assuming Carmichael Company had a favorable direct materials price variance of $3,000 and an unfavorable direct materials usage variance of $2,000.

Management Accounting and Corporate Governance

Cost Behavior, Operating Leverage, and Profitability Analysis

Analysis of Cost,Volume,and Pricing to Increase Profitability

Cost Accumulation,Tracing,and Allocation

Cost Management in an Automated Business Environment: ABC, ABM, and TQM

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Responsibility Accounting

Planning for Capital Investments

Product Costing in Service and Manufacturing Entities

Job-Order, Process, and Hybrid Costing Systems

Financial Statement Analysis

Statement of Cash Flows

Filters

Exam 8: Performance Evaluation

The two factors that determine the costs of manufacturing inputs (materials,labor,and overhead)are price and quantity.

The sales volume variance is favorable if actual sales volume is higher than the budgeted.

Which manager is usually held responsible for materials price variances?

Indicate whether each of the following statements is

Indicate whether each of the following statements is

Hurst Company's standard variable materials cost per unit was $8.The actual materials cost per unit on production of 10,000 units was $8.22.Based on this information,Hurst Company incurred an unfavorable variable materials price variance of $2,200.

The differences between the standard and actual amounts are called variances.

Indicate whether each of the following statements is

Which of the following statements is true?

Which of the following statements is incorrect?

How do differences between planned and actual volume impact companies that use a cost plus pricing strategy?

The sales volume variance is the difference between sales revenue on the static budget and sales revenue on the flexible budget.

Which of the following reason(s)cause flexible budgets to be useful planning tools?

Indicate whether each of the following statements is

Which manager is normally held responsible for fixed cost volume variances?

Select the correct statement from the following,assuming Carmichael Company had a favorable direct materials price variance of $3,000 and an unfavorable direct materials usage variance of $2,000.

Management Accounting and Corporate Governance

Cost Behavior, Operating Leverage, and Profitability Analysis

Analysis of Cost,Volume,and Pricing to Increase Profitability

Cost Accumulation,Tracing,and Allocation

Cost Management in an Automated Business Environment: ABC, ABM, and TQM

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Responsibility Accounting

Planning for Capital Investments

Product Costing in Service and Manufacturing Entities

Job-Order, Process, and Hybrid Costing Systems

Financial Statement Analysis

Statement of Cash Flows

Filters