Question 1

A volume variance occurs when the company operates at a different capacity level than was expected.

Accepted Answer

A) True 
 B)False

Question 2

Claymore Corp.has the following information about its standards and production activity for September.The volume variance is:

Accepted Answer

A) $1,295U. 
B) $1,295F. 
C) $2,400U. 
D) $2,400F. 
E) $3,695U. 
A) $1,295U. 
B) $1,295F. 
C) $2,400U. 
D) $2,400F. 
E) $3,695U.

Question 3

The following information comes from the flexible budget performance report of Jackal Corp.for the current period.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 flexible...

Question 4

Standard costs are:

Accepted Answer

A) Actual costs incurred to produce a specific product or perform a service. 
B) Preset costs for delivering a product or service under normal conditions. 
C) Established by the IMA. 
D) Rarely achieved. 
E) Uniform among companies within an industry. 
A) Actual costs incurred to produce a specific product or perform a service. 
B) Preset costs for delivering a product or service under normal conditions. 
C) Established by the IMA. 
D) Rarely achieved. 
E) Uniform among companies within an industry.

Question 5

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 sales 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 6

A job was budgeted to require 3 hours of labor per unit at $11.00 per hour.The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $269,500.What is the direct labor efficiency variance?

Accepted Answer

A) $27,500 unfavorable. 
B) $22,000 unfavorable. 
C) $16,000 unfavorable. 
D) $22,000 favorable. 
E) $6,000 unfavorable. 
A) $27,500 unfavorable. 
B) $22,000 unfavorable. 
C) $16,000 unfavorable. 
D) $22,000 favorable. 
E) $6,000 unfavorable.

Question 7

What are the four steps in the effective management of variance analysis?

Accepted Answer

The four steps are: (1)prepare

Question 8

A budget based on several different levels of activity,often including both a best-case and worst-case scenario,is called a:

Accepted Answer

A) Rolling budget. 
B) Production budget. 
C) Flexible budget. 
D) Merchandise purchases budget. 
E) Fixed budget. 
A) Rolling budget. 
B) Production budget. 
C) Flexible budget. 
D) Merchandise purchases budget. 
E) Fixed budget.

Question 9

A management approach that focuses attention on significant differences from plans and gives less attention to areas where performance is reasonably close to standards is known as ________.

Accepted Answer

management

Question 10

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 total sales 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.

Question 11

Explain how favorable and unfavorable variances impact income.

Accepted Answer

Favorable variances

Question 12

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

Accepted Answer

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

Question 13

Jefferson Co.uses the following standard to produce a single unit of its product: variable overhead $6 (2 hrs.per unit @ $3/hr.).Actual data for the month show variable overhead costs of $150,000,and 24,000 units produced.The total variable overhead variance is:

Accepted Answer

A) $6,000F. 
B) $6,000U. 
C) $78,000U. 
D) $78,000F. 
E) $0. 
A) $6,000F. 
B) $6,000U. 
C) $78,000U. 
D) $78,000F. 
E) $0.

Question 14

Variable budget is another name for a flexible budget.

Accepted Answer

A) True 
 B)False

Question 15

Cavern Company's output for the current period results in a $5,250 unfavorable direct material price variance.The actual price per pound is $56.50 and the standard price per pound is $55.00.How many pounds of material are used in the current period?

Accepted Answer

A) 5,393. 
B) 5,110. 
C) 3,500. 
D) 3,750. 
E) 4,000. 
A) 5,393. 
B) 5,110. 
C) 3,500. 
D) 3,750. 
E) 4,000.

Question 16

The following information comes from the records of Magno Co.for the current period.
a.Compute the overhead controllable and volume variances.In each case,state whether the variance is favorable or unfavorable.
b.Prepare the journal entries to charge overhead costs to work in process and the overhead variances to their proper accounts.
   Factory overhead (based on budgeted production of 24,500 units)
Variable overhead $2.25/direct labor hour
Fixed overhead $1.95/direct labor hour

Accepted Answer

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

Question 17

While companies strive to achieve ideal standards,reality implies that some loss of materials usually occurs with any process.

Accepted Answer

A) True 
 B)False

Question 18

Differences between actual costs and standard costs are known as ________.These differences may be subdivided into ________ and ________.

Accepted Answer

cost variances (or just variance); price

Question 19

Gala Enterprises collected the following data regarding production of one of its products.Compute the variable overhead cost variance,the variable overhead spending variance,the variable overhead efficiency variance,the fixed overhead cost variance,the fixed overhead spending variance,and the fixed overhead volume variance.

Accepted Answer

Variable overhead cost variance:
Actual

Question 20

Based on a predicted level of production and sales of 22,000 units,a company anticipates total variable costs of $99,000,fixed costs of $30,000,and operating income of $36,000.Based on this information,the budgeted amount of fixed costs for 20,000 units would be:

Accepted Answer

A) $99,000. 
B) $90,000. 
C) $66,000. 
D) $30,000. 
E) $150,000. 
A) $99,000. 
B) $90,000. 
C) $66,000. 
D) $30,000. 
E) $150,000.

Exam 21: Flexible Budgets and Standard Costs

A volume variance occurs when the company operates at a different capacity level than was expected.

Claymore Corp.has the following information about its standards and production activity for September.The volume variance is:

The following information comes from the flexible budget performance report of Jackal Corp.for the current period.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.

Standard costs are:

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 sales expected if the company produces and sells 16,000 units is:

A job was budgeted to require 3 hours of labor per unit at $11.00 per hour.The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $269,500.What is the direct labor efficiency variance?

What are the four steps in the effective management of variance analysis?

A budget based on several different levels of activity,often including both a best-case and worst-case scenario,is called a:

A management approach that focuses attention on significant differences from plans and gives less attention to areas where performance is reasonably close to standards is known as ________.

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 total sales variance for the month.

Explain how favorable and unfavorable variances impact income.

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

Jefferson Co.uses the following standard to produce a single unit of its product: variable overhead $6 (2 hrs.per unit @ $3/hr.).Actual data for the month show variable overhead costs of $150,000,and 24,000 units produced.The total variable overhead variance is:

Variable budget is another name for a flexible budget.

Cavern Company's output for the current period results in a $5,250 unfavorable direct material price variance.The actual price per pound is $56.50 and the standard price per pound is $55.00.How many pounds of material are used in the current period?

While companies strive to achieve ideal standards,reality implies that some loss of materials usually occurs with any process.

Differences between actual costs and standard costs are known as ________.These differences may be subdivided into ________ and ________.

Based on a predicted level of production and sales of 22,000 units,a company anticipates total variable costs of $99,000,fixed costs of $30,000,and operating income of $36,000.Based on this information,the budgeted amount of fixed costs for 20,000 units would be:

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

Differences between actual costs and standard costs are known as .These differences may be subdivided into and .