Exam 8: Flexible Budgets and Variance Analysis

The Reindeer 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 $2.30 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 price variance for July?

Favorable flexible budget variances are always good news.

Flexible budget variances are designed to measure the ________.

Perfection standards and ideal standards are different.

Bond Company has depreciation expense of $63,000 at a production level of 21,000 units.If the production level is 15,000 units,what is the total depreciation expense?

Eagle Company had a favorable flexible budget direct material variance.In this case,it would NOT be possible for the direct material price variance to be ________ and the direct material quantity variance to be ________.

What are two possible interpretations of "currently attainable standards"?

The following data for the SeeMe Company pertain to the production of 1,000 clay bottles during July: What is the variable overhead spending variance?

The Vito Company makes tables for which the following standards have been developed: Production of 200 tables was expected in July,but 220 tables were actually completed.Direct materials purchased and used were 2,000 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 material quantity variance for July?

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

When a firm meets a sales goal,it is said to be ________.When a firm incurs more direct material costs to manufacture products than expected,the firm is said to be ________.

An unfavorable static budget variance for operating income may be due to ________ or ________.

Pizza Company planned to produce 12,000 units.This level of activity required 40 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 amount for total setup costs?

Unfavorable flexible budget variances result from ________.

________ is the degree to which an organization minimizes the ________ used to achieve an objective.

Puppy Company planned to produce 12,000 units.This level of activity required 20 setups at a cost of $22,000 plus $500 per setup.Actual production was 10,000 units,requiring 15 setups.Actual setup cost was $26,000.At 10,000 units,what is the flexible budget amount for total setup costs?

By using a flexible budget,changes in activity level cannot cause any variances between the flexible budget and actual results.

Sales-activity variances measure how efficient managers have been in meeting the planned sales goal.

The static budget is based on the ________ level of output and the flexible budget is based on the ________ level of output.

If the total sales-activity variance and the static-budget variance are equal,there is no flexible budget variance.