Question 1

One possible explanation for direct labor rate and efficiency variances is the use of workers with different skill levels.

Accepted Answer

A) True 
 B)False

Question 2

Another name for a static budget is a variable budget.

Accepted Answer

A) True 
 B)False

Question 3

Georgia,Inc.has collected the following data on one of its products.The direct materials price variance is:

Accepted Answer

A) $13,750 unfavorable. 
B) $16,250 unfavorable. 
C) $16,250 favorable. 
D) $30,000 unfavorable. 
E) $33,000 favorable. 
A) $13,750 unfavorable. 
B) $16,250 unfavorable. 
C) $16,250 favorable. 
D) $30,000 unfavorable. 
E) $33,000 favorable.

Question 4

Clevenger Co.planned to produce and sell 30,000 units with a selling price of $10 per unit.Variable costs are expected to be $4 per unit and fixed costs are expected to be $80,000.Clevenger actually produced and sold 37,000 units.
Using a contribution margin format:
Prepare a fixed budget income statement for the planned level of sales and production.

Accepted Answer

The answer of Clevenger Co.planned to produce and sell 30,000...

Question 5

Sanchez Company's output for the current period was assigned a $400,000 standard direct labor cost.The direct labor variances included a $10,000 unfavorable direct labor rate variance and a $4,000 favorable direct labor efficiency variance.What is the actual total direct labor cost for the current period?

Accepted Answer

A) $414,000. 
B) $386,000. 
C) $394,000. 
D) $406,000. 
E) $410,000. 
A) $414,000. 
B) $386,000. 
C) $394,000. 
D) $406,000. 
E) $410,000.

Question 6

Anniston Co.planned to produce and sell 40,000 units.At that volume level,variable costs are determined to be $320,000 and fixed costs are $30,000.The planned selling price is $10 per unit.Anniston actually produced and sold 42,000 units.
Using a contribution margin format:
(a)Prepare a fixed budget income statement for the planned level of sales and production.
(b)Prepare a flexible budget income statement for the actual level of sales and production.

Accepted Answer

The answer of Anniston Co.planned to produce and sell 40,000...

Question 7

The following information comes from the records of Barney Co.for the current period.
a.Compute the direct materials price and quantity variances,direct labor rate and efficiency variances and state whether the variance is favorable or unfavorable.
b.Prepare the journal entries to charge direct materials and direct labor costs to work in process and the materials and labor variances to their proper accounts.

Accepted Answer

The answer of The following information comes from the records...

Question 8

What is the overhead volume variance? What would be the cause of a favorable volume variance?

Accepted Answer

A volume variance occurs when the actual

Question 9

A company's flexible budget for 12,000 units of production showed sales,$48,000; variable costs,$18,000; and fixed costs,$16,000.The contribution margin expected if the company produces and sells 16,000 units is:

Accepted Answer

A) $48,000. 
B) $64,000. 
C) $40,000. 
D) $24,000. 
E) $18,000. 
A) $48,000. 
B) $64,000. 
C) $40,000. 
D) $24,000. 
E) $18,000.

Question 10

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound.In manufacturing 8,000 units,47,000 pounds of material were used at a cost of $51 per pound.What is the direct materials quantity variance?

Accepted Answer

A) $47,000 unfavorable. 
B) $47,000 favorable. 
C) $50,000 unfavorable. 
D) $50,000 favorable. 
E) $3,000 favorable. 
A) $47,000 unfavorable. 
B) $47,000 favorable. 
C) $50,000 unfavorable. 
D) $50,000 favorable. 
E) $3,000 favorable.

Question 11

Direct materials variances are called price and quantity variances.However,when referring to direct labor,these variances are usually called ________ and ________ variances.

Accepted Answer

rate; effi

Question 12

Fletcher Company collected the following data regarding production of one of its products.
 
-Compute the direct labor efficiency variance.

Accepted Answer

A) $19,125 favorable. 
B) $80,250 favorable. 
C) $61,125 favorable. 
D) $19,125 unfavorable. 
E) $80,250 unfavorable. 
A) $19,125 favorable. 
B) $80,250 favorable. 
C) $61,125 favorable. 
D) $19,125 unfavorable. 
E) $80,250 unfavorable.

Question 13

In sales variance analysis,the budgeted amount of unit sales is the predicted activity level and the budgeted cost of the goods sold can be treated as a "standard" price.

Accepted Answer

A) True 
 B)False

Question 14

A flexible budget is also called a ________ budget.

Accepted Answer

The answer of A flexible budget is also called a...

Question 15

If actual price per unit of materials is greater than the standard price per unit of materials,the direct materials price variance is ________.

Accepted Answer

The answer of If actual price per unit of materials...

Question 16

A budget performance report shows budgeted amounts,actual amounts,and differences between budgeted and actual amounts.

Accepted Answer

A) True 
 B)False

Question 17

Based on predicted production of 25,000 units,FreshCo.anticipates $175,000 of fixed costs and $137,500 of variable costs.What are the flexible budget amounts of total costs for 20,000 and 30,000 units?

Accepted Answer

Variable Costs = $137,500/25,0

Question 18

Selected information from Richards Company's flexible budget is presented below:
 
Richards Company applies overhead to production at a rate of $31.25 per unit based on a normal operating level of 80% of capacity.For the current period,Richards Company produced 5,400 units and incurred $62,000 of fixed overhead costs and $96,000 of variable overhead costs.The company used 11,000 labor hours to produce the 5,400 units.Calculate the variable overhead spending and efficiency variances,and the fixed overhead spending and volume variances.Indicate whether each variance is favorable or unfavorable.

Accepted Answer

The answer of Selected information from Richards Company's flexible budget...

Question 19

A flexible budget expresses variable costs on a per unit basis and fixed costs on a total basis.

Accepted Answer

A) True 
 B)False

Question 20

Milltown Company sells used cars.During the month,the dealership sold 22 cars at an average price of $15,000 each.The budget for the month was to sell 20 cars at an average price of $16,000.Compute the dealership's sales volume variance for the month.

Accepted Answer

A) $22,000 unfavorable. 
B) $10,000 favorable. 
C) $22,000 favorable. 
D) $32,000 unfavorable. 
E) $32,000 favorable. 
A) $22,000 unfavorable. 
B) $10,000 favorable. 
C) $22,000 favorable. 
D) $32,000 unfavorable. 
E) $32,000 favorable.

Exam 21: Flexible Budgets and Standard Costs

One possible explanation for direct labor rate and efficiency variances is the use of workers with different skill levels.

Another name for a static budget is a variable budget.

Georgia,Inc.has collected the following data on one of its products.The direct materials price variance is:

What is the overhead volume variance? What would be the cause of a favorable volume variance?

A company's flexible budget for 12,000 units of production showed sales,$48,000; variable costs,$18,000; and fixed costs,$16,000.The contribution margin expected if the company produces and sells 16,000 units is:

The standard materials cost to produce 1 unit of Product R is 6 pounds of material at a standard price of $50 per pound.In manufacturing 8,000 units,47,000 pounds of material were used at a cost of $51 per pound.What is the direct materials quantity variance?

Direct materials variances are called price and quantity variances.However,when referring to direct labor,these variances are usually called ________ and ________ variances.

Fletcher Company collected the following data regarding production of one of its products. -Compute the direct labor efficiency variance.

In sales variance analysis,the budgeted amount of unit sales is the predicted activity level and the budgeted cost of the goods sold can be treated as a "standard" price.

A flexible budget is also called a ________ budget.

If actual price per unit of materials is greater than the standard price per unit of materials,the direct materials price variance is ________.

A budget performance report shows budgeted amounts,actual amounts,and differences between budgeted and actual amounts.

Based on predicted production of 25,000 units,FreshCo.anticipates $175,000 of fixed costs and $137,500 of variable costs.What are the flexible budget amounts of total costs for 20,000 and 30,000 units?

A flexible budget expresses variable costs on a per unit basis and fixed costs on a total basis.

Milltown Company sells used cars.During the month,the dealership sold 22 cars at an average price of $15,000 each.The budget for the month was to sell 20 cars at an average price of $16,000.Compute the dealership's sales volume variance for the month.

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

Lean Principles and Accounting

Filters

Direct materials variances are called price and quantity variances.However,when referring to direct labor,these variances are usually called and variances.