Question 1

Morgan's,Inc.has provided you with the following financial information:
  
Required:

Prepare a flexible budget.

Accepted Answer

The answer of Morgan's,Inc.has provided you with the following financial...

Question 2

Adler Industries uses a standard cost system in which direct material is carried at standard cost.Adler has established the following standards for one unit of product:  standard quantity of 8 pounds, standard price $1.80 per pound. During January, Adler purchased 160,000 pounds of direct material at a cost of $304,000 and used 142,500 pounds in production of 18,700 units.

Required:

Calculate the direct materials price variance and indicate whether the variance is favorable or unfavorable.

Accepted Answer

Direct material pric

Question 3

Which of the following is not used in the calculation of the direct labor rate variance?

Accepted Answer

A) Standard wage rate 
B) Actual wage rate 
C) Standard hours worked 
D) Actual hours worked 
A) Standard wage rate 
B) Actual wage rate 
C) Standard hours worked 
D) Actual hours worked

Question 4

Backyard Creations purchased 7,800 feet of copper tubing at a price of $2.30 per foot and used 7,500 feet during the period. The standard quantity allowed for the units produced is 7,300 and the standard price of the copper tubing is $2.50 per foot. What is Backyard Creations’ direct materials quantity variance for the period?

Accepted Answer

A)  $460 unfavorable 
B)  $500 unfavorable 
C)  $750 unfavorable 
D)  $1,250 unfavorable 
A)  $460 unfavorable 
B)  $500 unfavorable 
C)  $750 unfavorable 
D)  $1,250 unfavorable

Question 5

Which of the following is not a factor in the amount of material used in production,resulting in a direct materials quantity variance?

Accepted Answer

A) The quality of the material. 
B) The skill level of the production workers. 
C) The supervision provided by the production manager. 
D) All of these ans choices are correct. 
A) The quality of the material. 
B) The skill level of the production workers. 
C) The supervision provided by the production manager. 
D) All of these ans choices are correct.

Question 6

The flexible budget variance for direct labor is separated into two components: a direct labor rate variance and a direct labor quantity variance.

Accepted Answer

A) True 
 B)False

Question 7

R&N Manufacturing produces music boxes.The fixed overhead rate is $5.10 per direct labor hour,and the company budgeted for 4,600 direct labor hours for the year.During the year,R&N produced 2,500 music boxes using 4,800 direct labor hours.Actual fixed overhead for the year was $23,000.What is the company's fixed overhead spending variance?

Accepted Answer

A)  $460 favorable 
B)  $460 unfavorable 
C)  $1,480 favorable 
D)  $1,480 unfavorable 
A)  $460 favorable 
B)  $460 unfavorable 
C)  $1,480 favorable 
D)  $1,480 unfavorable

Question 8

Kevin Jarvis is the controller of Bitterroot Industries.Kevin prepared the following budgeted income statement at various levels of sales.After careful review of the budgeted income statements,and after discussions with the sales and production managers,the CEO determines that the best alternative is to base the budget on a sales volume of 30,000 units.  
  
Actual results for the year were 28,000 units, reflected in the following income statement:  
 
What is the flexible budget variance for direct material?

Accepted Answer

A)  $28,000 favorable 
B)  $28,000 unfavorable 
C)  $6,000 favorable 
D)  $34,000 unfavorable 
A)  $28,000 favorable 
B)  $28,000 unfavorable 
C)  $6,000 favorable 
D)  $34,000 unfavorable

Question 9

A variance is labeled as "favorable" or "unfavorable" indicating their effect on managers' bonuses.

Accepted Answer

A) True 
 B)False

Question 10

When the budget being used is a static budget,the difference between actual results and budgeted results is referred to as a

Accepted Answer

A) Static swing. 
B) Variable discrepancy. 
C) Static budget variance. 
D) Static budget fluctuation. 
A) Static swing. 
B) Variable discrepancy. 
C) Static budget variance. 
D) Static budget fluctuation.

Question 11

When managers investigate a direct labor efficiency variance,they are trying to

Accepted Answer

A) Place blame on the person responsible for the variance. 
B) Understand why workers took a longer or shorter amount of time than expected to produce a product. 
C) Find out which workers were paid more than the standard rate. 
D) All of these ans choices are correct. 
A) Place blame on the person responsible for the variance. 
B) Understand why workers took a longer or shorter amount of time than expected to produce a product. 
C) Find out which workers were paid more than the standard rate. 
D) All of these ans choices are correct.

Question 12

If the actual average wage rate is $4.50 per direct labor hour,but the standard wage rate is $4.70 per direct labor hour,

Accepted Answer

A) The direct labor efficiency variance will be favorable. 
B) The direct labor efficiency variance will be unfavorable. 
C) The direct labor rate variance will be favorable. 
D) The direct labor rate variance will be unfavorable. 
A) The direct labor efficiency variance will be favorable. 
B) The direct labor efficiency variance will be unfavorable. 
C) The direct labor rate variance will be favorable. 
D) The direct labor rate variance will be unfavorable.

Question 13

When the production manager is investigating and understanding the cause of the variable overhead spending variance relating to indirect materials,he will most likely want to talk to the

Accepted Answer

A) Inventory manager. 
B) Purchasing agent. 
C) Design engineer. 
D) Both the inventory manager and the purchasing agent. 
A) Inventory manager. 
B) Purchasing agent. 
C) Design engineer. 
D) Both the inventory manager and the purchasing agent.

Question 14

Culver,Inc.manufactures motors used in electric toothbrushes and other small appliances.Culver's fixed overhead rate is $7.60 and the company budgeted 165,000 direct labor hours for the year.During the year Culver produced 320,000 motors and used 164,000 direct labor hours.Culver's fixed overhead spending variance was $3,500 unfavorable for the year.What was Culver's actual fixed overhead for the year?

Accepted Answer

A)  $1,250,500 
B)  $1,257,500 
C)  $1,246,400 
D)  $1,249,900 
A)  $1,250,500 
B)  $1,257,500 
C)  $1,246,400 
D)  $1,249,900

Question 15

Which of the following employees is typically held accountable for the direct materials price variance?

Accepted Answer

A) Controller 
B) Purchasing Manager 
C) Production Manager 
D) Engineering Department Manager 
A) Controller 
B) Purchasing Manager 
C) Production Manager 
D) Engineering Department Manager

Question 16

The variance that captures the effect of efficient use of the activity base on the cost of variable overhead is the

Accepted Answer

A) Variable overhead spending variance. 
B) Variable overhead efficiency variance. 
C) Variable overhead volume variance. 
D) None of these ans choices are correct. 
A) Variable overhead spending variance. 
B) Variable overhead efficiency variance. 
C) Variable overhead volume variance. 
D) None of these ans choices are correct.

Question 17

If the actual price of direct materials is $10 per unit while the standard price of the direct material is $11,

Accepted Answer

A) The direct materials quantity variance will be favorable 
B) The direct materials quantity variance will be unfavorable 
C) The direct materials price variance will be favorable 
D) The direct materials price variance will be unfavorable 
A) The direct materials quantity variance will be favorable 
B) The direct materials quantity variance will be unfavorable 
C) The direct materials price variance will be favorable 
D) The direct materials price variance will be unfavorable

Question 18

R&N Sports has budgeted $57,000 for fixed overhead for the period. This budget was based on the following items:  depreciation of $24,000, rent of $4,000, executive salaries of $27,000 and other fixed costs of $2,000. Actual overhead incurred is $52,000. Production was budgeted at 8,000 units while actual production is 8,100.

Required:

Calculate the fixed overhead spending variance.

Accepted Answer

$52,000 -

Question 19

Adler Industries uses a standard cost system. Adler has established the following standards for one unit of product:  standard labor of .25 hour and standard wage rate of $8 per hour. During January, Adler used 5,000 hours of direct labor and paid $37,800 in wages in producing 18,700 units.

Required:

Calculate the direct labor efficiency variance and indicate whether the variance is favorable or unfavorable.

Accepted Answer

Direct labor efficie

Question 20

When the budget being used is a static budget,the difference between actual results and budgeted results is referred to as "budget slack".

Accepted Answer

A) True 
 B)False

Morgan's,Inc.has provided you with the following financial information: Required: Prepare a flexible budget.

Which of the following is not used in the calculation of the direct labor rate variance?

Which of the following is not a factor in the amount of material used in production,resulting in a direct materials quantity variance?

The flexible budget variance for direct labor is separated into two components: a direct labor rate variance and a direct labor quantity variance.

A variance is labeled as "favorable" or "unfavorable" indicating their effect on managers' bonuses.

When the budget being used is a static budget,the difference between actual results and budgeted results is referred to as a

When managers investigate a direct labor efficiency variance,they are trying to

If the actual average wage rate is $4.50 per direct labor hour,but the standard wage rate is $4.70 per direct labor hour,

When the production manager is investigating and understanding the cause of the variable overhead spending variance relating to indirect materials,he will most likely want to talk to the

Which of the following employees is typically held accountable for the direct materials price variance?

The variance that captures the effect of efficient use of the activity base on the cost of variable overhead is the

If the actual price of direct materials is $10 per unit while the standard price of the direct material is $11,

When the budget being used is a static budget,the difference between actual results and budgeted results is referred to as "budget slack".

Accounting As a Tool for Management

Cost Behavior and Cost Estimation Summary of Questions by Objectives and Blooms Taxonomy

Cost-Volume-Profit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting

Activity-Based Costing and Activity Based Management

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Decentralizing and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Statement of Cash Flows

Topic Focus: Process Costing

Topic Focus Variable and Absorption Costing

Topic Focus Standard Costing Systems

Topic Focus Customer Profitability

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Exam 6: Performance Evaluation: Variance Analysis

Morgan's,Inc.has provided you with the following financial information: Required: Prepare a flexible budget.

Which of the following is not used in the calculation of the direct labor rate variance?

Which of the following is not a factor in the amount of material used in production,resulting in a direct materials quantity variance?

The flexible budget variance for direct labor is separated into two components: a direct labor rate variance and a direct labor quantity variance.

A variance is labeled as "favorable" or "unfavorable" indicating their effect on managers' bonuses.

When the budget being used is a static budget,the difference between actual results and budgeted results is referred to as a

When managers investigate a direct labor efficiency variance,they are trying to

If the actual average wage rate is $4.50 per direct labor hour,but the standard wage rate is $4.70 per direct labor hour,

When the production manager is investigating and understanding the cause of the variable overhead spending variance relating to indirect materials,he will most likely want to talk to the

Which of the following employees is typically held accountable for the direct materials price variance?

The variance that captures the effect of efficient use of the activity base on the cost of variable overhead is the

If the actual price of direct materials is $10 per unit while the standard price of the direct material is $11,

When the budget being used is a static budget,the difference between actual results and budgeted results is referred to as "budget slack".

Accounting As a Tool for Management

Cost Behavior and Cost Estimation Summary of Questions by Objectives and Blooms Taxonomy

Cost-Volume-Profit Analysis and Pricing Decisions

Product Costs and Job Order Costing

Planning and Forecasting

Activity-Based Costing and Activity Based Management

Using Accounting Information to Make Managerial Decisions

Capital Budgeting

Decentralizing and Performance Evaluation

Performance Evaluation Revisited: a Balanced Approach

Financial Statement Analysis

Statement of Cash Flows

Topic Focus: Process Costing

Topic Focus Variable and Absorption Costing

Topic Focus Standard Costing Systems

Topic Focus Customer Profitability

Filters