Question 1

The difference between the flexible budget sales and the fixed budget sales is called the ________ variance.

Accepted Answer

The answer of The difference between the flexible budget sales...

Question 2

Management by exception means studying industry standards to define normal conditions.

Accepted Answer

A) True 
 B)False

Question 3

When the actual price per unit of direct materials used exceeds the standard price per unit,the company has an unfavorable direct materials price variance.

Accepted Answer

A) True 
 B)False

Question 4

Based on predicted production of 12,000 units,a company anticipates $150,000 of fixed costs and $123,000 of variable costs.The flexible budget amounts of fixed and variable costs for 10,000 units are:

Accepted Answer

A) $125,000 fixed and $102,500 variable. 
B) $125,000 fixed and $123,000 variable. 
C) $102,500 fixed and $150,000 variable. 
D) $150,000 fixed and $123,000 variable. 
E) $150,000 fixed and $102,500 variable. 
A) $125,000 fixed and $102,500 variable. 
B) $125,000 fixed and $123,000 variable. 
C) $102,500 fixed and $150,000 variable. 
D) $150,000 fixed and $123,000 variable. 
E) $150,000 fixed and $102,500 variable.

Question 5

When standard costs are used,factory overhead is assigned to products with a predetermined standard overhead rate.

Accepted Answer

A) True 
 B)False

Question 6

What are some causes of direct labor rate and efficiency variances?

Accepted Answer

The use of workers with different skill

Question 7

A company's flexible budget for the range of 35,000 units to 45,000 units of production showed variable overhead costs of $2 per unit and fixed overhead costs of $72,000.The company incurred total overhead costs of $148,800 while operating at a volume of 40,000 units.The total controllable cost variance is:

Accepted Answer

A) $6,800 favorable. 
B) $6,800 unfavorable. 
C) $3,200 favorable. 
D) $3,200 unfavorable. 
E) $10,000 favorable. 
A) $6,800 favorable. 
B) $6,800 unfavorable. 
C) $3,200 favorable. 
D) $3,200 unfavorable. 
E) $10,000 favorable.

Question 8

Ship Co.produces storage crates that require 1.2 meters of material at $.85 per meter and 0.1 direct labor hours at $15.00 per hour.Overhead is applied at the rate of $9 per direct labor hour.What is the total standard cost for one unit of product that would appear on a standard cost card?

Accepted Answer

A) $25.02. 
B) $11.52. 
C) $2.40. 
D) $2.52. 
E) $3.42. 
A) $25.02. 
B) $11.52. 
C) $2.40. 
D) $2.52. 
E) $3.42.

Question 9

Naches Co.assigned direct labor cost to its products in May for 1,300 standard hours of direct labor at the standard $8 per hour rate.The direct labor rate variance for the month was $200 favorable and the direct labor efficiency variance was $150 favorable.Prepare the journal entry to charge Work in Process Inventory for the standard labor cost of the goods manufactured in May and to record the direct labor variances.Assuming that the direct labor variances are immaterial,prepare the journal entry that Naches would make to close the variance accounts.

Accepted Answer

The answer of Naches Co.assigned direct labor cost to its...

Question 10

Lavoie Company planned to use 18,500 pounds of material costing $2.50 per pound to make 4,000 units of its product.In actually making 4,000 units,the company used 18,800 pounds that cost $2.54 per pound.Calculate the direct materials quantity variance.

Accepted Answer

The answer of Lavoie Company planned to use 18,500 pounds...

Question 11

An internal report that helps management analyze the difference between actual performance and budgeted performance based on the actual sales volume (or other level of activity)is called a(n):

Accepted Answer

A) Sales budget performance report. 
B) Flexible budget performance report. 
C) Master budget performance report. 
D) Static budget performance report. 
E) Operating budget performance report. 
A) Sales budget performance report. 
B) Flexible budget performance report. 
C) Master budget performance report. 
D) Static budget performance report. 
E) Operating budget performance report.

Question 12

A fixed budget is based on a single predicted amount of sales or other activity measure.

Accepted Answer

A) True 
 B)False

Question 13

Oxford Co.produces and sells two lines of t-shirts,Classic and Mod.Oxford provides the following data.Compute the sales price and the sales volume variances for each product.

Accepted Answer

The answer of Oxford Co.produces and sells two lines of...

Question 14

If Mercury Company's actual overhead incurred during a period was $32,700 and the company reported a favorable overhead controllable variance of $1,200 and an unfavorable overhead volume variance of $900,how much standard overhead cost was assigned to the products produced during the period?

Accepted Answer

The answer of If Mercury Company's actual overhead incurred during...

Question 15

Presented below are terms preceded by letters a through h and followed by a list of definitions 1 through 8.Enter the letter of the term with the definition,using the space preceding the definition.
(a)Unfavorable variance
(b)Fixed budget performance report
(c)Overhead cost variance
(d)Efficiency variance
(e)Spending variance
(f)Flexible budget performance report
(g)Quantity variance
(h)Favorable variance
________(1)Results from a comparison of actual cost or revenue to budget that contributes to a lower income.
________(2)A report that compares actual results with the results expected under a fixed budget.
________(3)When management pays an amount different from the standard price to acquire an item.
________(4)Results from a comparison of actual cost or revenue to budget that contributes to higher income.
________(5)Difference in variable overhead when the standard allocation base expected for actual production differs from the actual allocation base.
________(6)Difference between actual quantity of an input and the standard quantity of the input.
________(7)Difference between the total overhead cost applied to products and the total overhead cost actually incurred.
________(8)A report that compares actual performance and budgeted performance based on actual sales volume or other activity level.

Accepted Answer

1.A; 2.B;

Question 16

Based on a predicted level of production and sales of 30,000 units,a company anticipates total contribution margin of $105,000,fixed costs of $40,000,and operating income of $65,000.Based on this information,the budgeted operating income for 28,000 units would be:

Accepted Answer

A) $52,000. 
B) $135,333. 
C) $58,000. 
D) $72,500. 
E) $105,000. 
A) $52,000. 
B) $135,333. 
C) $58,000. 
D) $72,500. 
E) $105,000.

Question 17

The difference between actual quantity of input used and the standard quantity of input used results in a:

Accepted Answer

A) Controllable variance. 
B) Standard variance. 
C) Budget variance. 
D) Quantity variance. 
E) Price variance. 
A) Controllable variance. 
B) Standard variance. 
C) Budget variance. 
D) Quantity variance. 
E) Price variance.

Question 18

The fixed overhead variance can be broken down into the ________ variance and the ________ variance.

Accepted Answer

spending;

Question 19

The sum of the variable overhead spending variance,the variable overhead efficiency variance,the fixed overhead spending variance is the ________.

Accepted Answer

controllab

Question 20

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

Accepted Answer

A) $2,430 unfavorable. 
B) $3,570 unfavorable. 
C) $2,430 favorable. 
D) $6,000 unfavorable. 
E) $3,570 favorable. 
A) $2,430 unfavorable. 
B) $3,570 unfavorable. 
C) $2,430 favorable. 
D) $6,000 unfavorable. 
E) $3,570 favorable.

Exam 21: Flexible Budgets and Standard Costs

The difference between the flexible budget sales and the fixed budget sales is called the ________ variance.

Management by exception means studying industry standards to define normal conditions.

When the actual price per unit of direct materials used exceeds the standard price per unit,the company has an unfavorable direct materials price variance.

Based on predicted production of 12,000 units,a company anticipates $150,000 of fixed costs and $123,000 of variable costs.The flexible budget amounts of fixed and variable costs for 10,000 units are:

When standard costs are used,factory overhead is assigned to products with a predetermined standard overhead rate.

What are some causes of direct labor rate and efficiency variances?

Ship Co.produces storage crates that require 1.2 meters of material at $.85 per meter and 0.1 direct labor hours at $15.00 per hour.Overhead is applied at the rate of $9 per direct labor hour.What is the total standard cost for one unit of product that would appear on a standard cost card?

Lavoie Company planned to use 18,500 pounds of material costing $2.50 per pound to make 4,000 units of its product.In actually making 4,000 units,the company used 18,800 pounds that cost $2.54 per pound.Calculate the direct materials quantity variance.

An internal report that helps management analyze the difference between actual performance and budgeted performance based on the actual sales volume (or other level of activity)is called a(n):

A fixed budget is based on a single predicted amount of sales or other activity measure.

Oxford Co.produces and sells two lines of t-shirts,Classic and Mod.Oxford provides the following data.Compute the sales price and the sales volume variances for each product.

If Mercury Company's actual overhead incurred during a period was $32,700 and the company reported a favorable overhead controllable variance of $1,200 and an unfavorable overhead volume variance of $900,how much standard overhead cost was assigned to the products produced during the period?

Based on a predicted level of production and sales of 30,000 units,a company anticipates total contribution margin of $105,000,fixed costs of $40,000,and operating income of $65,000.Based on this information,the budgeted operating income for 28,000 units would be:

The difference between actual quantity of input used and the standard quantity of input used results in a:

The fixed overhead variance can be broken down into the ________ variance and the ________ variance.

The sum of the variable overhead spending variance,the variable overhead efficiency variance,the fixed overhead spending variance is the ________.

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

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

The fixed overhead variance can be broken down into the variance and the variance.