Question 1

Which statement about "currently attainable standards" is FALSE?

Accepted Answer

A) They allow for normal spoilage and nonproductive time. 
B) They represent projections of what will probably be attained. 
C) Employees usually view these standards as reasonable. 
D) Because they allow for waste,they usually result in favorable variances. 
A) They allow for normal spoilage and nonproductive time. 
B) They represent projections of what will probably be attained. 
C) Employees usually view these standards as reasonable. 
D) Because they allow for waste,they usually result in favorable variances. D

Question 2

The following data are for Sacramento Corporation:   The static budget variance for operating income is ________.

Accepted Answer

A) $2,000 Favorable 
B) $2,000 Unfavorable 
C) $16,000 Favorable 
D) $16,000 Unfavorable 
A) $2,000 Favorable 
B) $2,000 Unfavorable 
C) $16,000 Favorable 
D) $16,000 Unfavorable A

Question 3

The unfavorable variances resulting from ideal standards are intended to constantly remind personnel of the continuous need for improvement.

Accepted Answer

A) True 
 B)False  True

Question 4

Rate variances are the same as ________ variances.Efficiency variances are the same as ________ variances.

Accepted Answer

A) spending; effective 
B) activity; static 
C) usage; quantity 
D) price; quantity 
A) spending; effective 
B) activity; static 
C) usage; quantity 
D) price; quantity

Question 5

Efficiency is indicated by the ________ variances.

Accepted Answer

A) sales activity 
B) static budget 
C) flexible budget 
D) strategic budget 
A) sales activity 
B) static budget 
C) flexible budget 
D) strategic budget

Question 6

The Long Company makes tables for which the following standards have been developed:   Production of 200 tables was expected in August,but 220 tables were actually completed.Direct materials purchased and used were 2,100 pounds at an actual price of $4.40 per pound.Direct labor cost for the month was $10,620,and the actual pay per hour was $18.00.What is the standard direct labor cost for each table produced?

Accepted Answer

A) $4.00 
B) $20.00 
C) $48.00 
D) $120.00 
A) $4.00 
B) $20.00 
C) $48.00 
D) $120.00

Question 7

The type of budget that serves as the original benchmark for evaluating performance is called a ________ budget.

Accepted Answer

A) strategic 
B) long-range 
C) flexible 
D) static 
A) strategic 
B) long-range 
C) flexible 
D) static

Question 8

The flexible budget variance for fixed overhead costs equals the ________ variance.

Accepted Answer

A) efficiency 
B) spending 
C) static budget 
D) operating budget 
A) efficiency 
B) spending 
C) static budget 
D) operating budget

Question 9

For the current year,John Company's static budget sales were $225,000.Actual sales for the current year were $220,000.Actual sales last year were $219,000.Expected sales last year were $225,000.What is the static budget variance for sales in the current year?

Accepted Answer

A) $5,000 Favorable 
B) $5,000 Unfavorable 
C) $6,000 Favorable 
D) $6,000 Unfavorable 
A) $5,000 Favorable 
B) $5,000 Unfavorable 
C) $6,000 Favorable 
D) $6,000 Unfavorable

Question 10

The Cheers Company makes mugs for which the following standards have been developed:   Production of 400 mugs was expected in July,but 440 mugs were actually completed.Direct materials purchased and used were 2,100 ounces at an actual price of $2.20 per ounce.Direct labor cost for the month was $5,310,and the actual pay per hour was $9.00.What is the direct material quantity variance for July?

Accepted Answer

A) $200 Favorable 
B) $200 Unfavorable 
C) $220 Favorable 
D) $220 Unfavorable 
A) $200 Favorable 
B) $200 Unfavorable 
C) $220 Favorable 
D) $220 Unfavorable

Question 11

One cause of a flexible budget variance for direct labor may be a difference between expected and actual hourly wage rates for factory workers.

Accepted Answer

A) True 
 B)False

Question 12

Total static budget variances are equal to the sum of activity-level variances and flexible budget variances.

Accepted Answer

A) True 
 B)False

Question 13

Fill in the blanks to complete the flexible budget for Meier Company.
   Variable costs:
   Fixed costs:

Accepted Answer

@#IMG-DLM& Variable

Question 14

An expected cost is the cost that is least likely to be attained.

Accepted Answer

A) True 
 B)False

Question 15

Blue Company planned to sell 35,000 units.Actual sales were 30,000 units.Based on this information,Blue Company was ________.

Accepted Answer

A) efficient 
B) inefficient 
C) effective 
D) ineffective 
A) efficient 
B) inefficient 
C) effective 
D) ineffective

Question 16

When should a company use an activity-based flexible budget with multiple cost drivers instead of a simple flexible budget with one cost driver?

Accepted Answer

A) when a significant portion of costs vary with only one cost driver 
B) when a significant portion of costs vary with the number of units of output 
C) when a significant portion of costs vary with the number of units of sales 
D) when a significant portion of costs vary with several different cost drivers 
A) when a significant portion of costs vary with only one cost driver 
B) when a significant portion of costs vary with the number of units of output 
C) when a significant portion of costs vary with the number of units of sales 
D) when a significant portion of costs vary with several different cost drivers

Question 17

A static budget has multiple levels of activity.

Accepted Answer

A) True 
 B)False

Question 18

Who is usually responsible for sales activity income variances?

Accepted Answer

A) operating managers in factory 
B) marketing managers 
C) research and development function 
D) product design function 
A) operating managers in factory 
B) marketing managers 
C) research and development function 
D) product design function

Question 19

If the sales activity variance was $8,000 Favorable and the static budget variance was $10,000 Favorable,then the flexible budget variance was ________.

Accepted Answer

A) $2,000 Favorable 
B) $2,000 Unfavorable 
C) $18,000 Favorable 
D) $18,000 Unfavorable 
A) $2,000 Favorable 
B) $2,000 Unfavorable 
C) $18,000 Favorable 
D) $18,000 Unfavorable

Question 20

A static budget is prepared for one expected level of activity.

Accepted Answer

A) True 
 B)False

Which statement about "currently attainable standards" is FALSE?

The following data are for Sacramento Corporation: The static budget variance for operating income is ________.

The unfavorable variances resulting from ideal standards are intended to constantly remind personnel of the continuous need for improvement.

Rate variances are the same as variances.Efficiency variances are the same as variances.

Efficiency is indicated by the ________ variances.

The type of budget that serves as the original benchmark for evaluating performance is called a ________ budget.

The flexible budget variance for fixed overhead costs equals the ________ variance.

For the current year,John Company's static budget sales were $225,000.Actual sales for the current year were $220,000.Actual sales last year were $219,000.Expected sales last year were $225,000.What is the static budget variance for sales in the current year?

One cause of a flexible budget variance for direct labor may be a difference between expected and actual hourly wage rates for factory workers.

Total static budget variances are equal to the sum of activity-level variances and flexible budget variances.

Fill in the blanks to complete the flexible budget for Meier Company. Variable costs: Fixed costs:

An expected cost is the cost that is least likely to be attained.

Blue Company planned to sell 35,000 units.Actual sales were 30,000 units.Based on this information,Blue Company was ________.

When should a company use an activity-based flexible budget with multiple cost drivers instead of a simple flexible budget with one cost driver?

A static budget has multiple levels of activity.

Who is usually responsible for sales activity income variances?

If the sales activity variance was $8,000 Favorable and the static budget variance was $10,000 Favorable,then the flexible budget variance was ________.

A static budget is prepared for one expected level of activity.

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 8: Flexible Budgets and Variance Analysis

Which statement about "currently attainable standards" is FALSE?

The following data are for Sacramento Corporation: The static budget variance for operating income is ________.

The unfavorable variances resulting from ideal standards are intended to constantly remind personnel of the continuous need for improvement.

Rate variances are the same as ________ variances.Efficiency variances are the same as ________ variances.

Efficiency is indicated by the ________ variances.

The type of budget that serves as the original benchmark for evaluating performance is called a ________ budget.

The flexible budget variance for fixed overhead costs equals the ________ variance.

For the current year,John Company's static budget sales were $225,000.Actual sales for the current year were $220,000.Actual sales last year were $219,000.Expected sales last year were $225,000.What is the static budget variance for sales in the current year?

One cause of a flexible budget variance for direct labor may be a difference between expected and actual hourly wage rates for factory workers.

Total static budget variances are equal to the sum of activity-level variances and flexible budget variances.

Fill in the blanks to complete the flexible budget for Meier Company. Variable costs: Fixed costs:

An expected cost is the cost that is least likely to be attained.

Blue Company planned to sell 35,000 units.Actual sales were 30,000 units.Based on this information,Blue Company was ________.

When should a company use an activity-based flexible budget with multiple cost drivers instead of a simple flexible budget with one cost driver?

A static budget has multiple levels of activity.

Who is usually responsible for sales activity income variances?

If the sales activity variance was $8,000 Favorable and the static budget variance was $10,000 Favorable,then the flexible budget variance was ________.

A static budget is prepared for one expected level of activity.

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

Rate variances are the same as variances.Efficiency variances are the same as variances.