Exam 8: Flexible Budgets and Variance Analysis

Black Company planned to produce and sell 900 units at a total cost of $180,000.Actual production and sales were 900 units at a cost of $170,000.Black Company was ________.

A flexible budget is different from a variable budget.

Currently attainable standards are levels of performance that can be achieved by realistic levels of effort.

The variable overhead efficiency variance depends on whether the quantity of the cost driver used is more or less than ________.

Actual results may differ from the static budget numbers because ________.

The following information is available: Actual output was 1,000 units.The company's per unit standards call for 15 yards of direct material at $10.00 per yard and 4 hours of direct labor at $9.50 per hour.The company purchased and used 11,000 yards of material. Required: A)Compute the price and quantity variances for direct material. B)Compute the price and quantity variances for direct labor.

Favorable variances do not require investigation.

A quantity variance for direct materials measures the deviation between the quantity of inputs that should have been used to achieve the actual output and the actual quantity of inputs used to achieve the actual output.

The fixed overhead spending variance equals the difference between ________.

A ________ is most likely to be held accountable for price variances for direct materials.

Ben Company planned to produce 12,000 units.This level of production required 20 setups at a cost of $18,000 plus $500 per setup.Actual production was 10,000 units,requiring 15 setups.Actual setup cost was $26,000.What is the static budget variance for setup costs?

An activity-based flexible budget is based on budgeted costs for every activity using the related cost driver.

Ideal standards make no provision for waste,spoilage and machine breakdowns.

Unfavorable flexible budget variances for costs do not necessarily mean that costs are mismanaged if ________.

A variance is the difference between ________.

Round Company currently produces cardboard boxes in an automated process.Expected production per month is 40,000 units.The required direct materials cost $0.30 per unit.Manufacturing fixed overhead costs are $24,000 per month.The cost driver for manufacturing fixed overhead costs is units of production.In a flexible budget at 20,000 units,the total fixed cost is ________ per month and the total variable cost is ________ per month.

Today Company has the following information: Assume the cost driver of product costs is units of production.What is the flexible budget variance for operating income?

The Luke Company makes tables for which the following standards have been developed: Production of 200 tables was expected in May,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 direct labor price variance for the month of May?

The flexible budget variance for direct labor can be broken down into a price variance and an effectiveness variance.

The following information is for Brooklyn Corporation: Direct Materials(measured in pounds) What is the direct material price variance?