Exam 15: Performance Evaluation

The Ferguson Company estimated that October sales would be 100,000 units with an average selling price of $6.00. Actual sales for October were 105,000 units and average selling price was $5.95. The sales volume variance was:

A static budget is one that shows estimated revenues and costs at multiple activity levels.

A cost variance is unfavorable if actual cost exceeds standard cost.

The cellular phone division of Stegall Company had budgeted sales of $950,000 and actual sales of $900,000. Budgeted expenses were $600,000 while actual expenses were $550,000. Based on this information, a report prepared for the manager of this profit center would show:

The practice of delegating authority and responsibility is referred to as:

The Electronics Division of Anton Company reports the following results for the current year: Anton Company has set a target return on investment (ROI) of 11% for the Electronics Division. The Electronic Division's return on investment is:

Unfavorable flexible budget variances are those that are the result of lower than expected sales volume.

Volume variances are computed for which of the following costs?

Howard Company provided the following selected information about its consumer products division for the current year: Based on this information, the division's investment amount was:

If the master budget prepared at a volume level of 10,000 units includes direct labor of $10,000, a flexible budget based on a volume of 11,000 units would include direct labor of $10,000.

Achieving the sales volume in the master budget is known as:

The Boyle Company estimated that April sales would be 150,000 units with an average selling price of $6.00. Actual sales for April were 149,000 units and average selling price was $6.12. The sales volume variance was:

Which of the following is an incorrect statement regarding variances?

The Landrum Company provides the following standard cost data per unit of product: Variable overhead: $8.00 Landrum anticipated that they would produce and sell 24,000 units. During the period, the company produced and sold 25,000 units incurring $210,000 of variable overhead costs. The variable overhead flexible budget variance was:

The research and development department of Apple Computers would likely be organized as:

Unless there are other factors to be considered, an investment opportunity with a return on investment that equals or exceeds the company's required rate of return would be accepted.

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

All of the following are characteristics that are required for effective responsibility accounting except:

Decentralization encourages upper level management to concentrate on short-term decisions.

Stafford Company prepared a static budget for a production and sales volume of 10,000 units. What is net income if 9,000 units are sold?