Question 1

Nantucket,Inc.uses a standard cost system in which direct material is carried at standard cost.Standards for one

Accepted Answer

Direct material price variance

Question 2

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

Accepted Answer

A) $28,000 favorable 
B) $28,000 unfavorable 
C) $6,000 unfavorable 
D) $30,000 favorable 
A) $28,000 favorable 
B) $28,000 unfavorable 
C) $6,000 unfavorable 
D) $30,000 favorable

Question 3

Adler Industries uses a standard cost system.Adler has established the following standards for one

Accepted Answer

Direct labor rate va

Question 4

Paula's Peach Preserves produces jars of gourmet peach jam.Paula prepared the following standard cost card for each 18 ounce jar of jam:   During the year Paula produced 153,225 jars of jam and incurred $210,000 in fixed manufacturing overhead.Paul's fixed overhead spending variance was $7,500 unfavorable.
What was Paula's budgeted level of production if necessary,round your answer to the nearest whole jar?

Accepted Answer

A) 150,000 jars 
B) 161,112 jars 
C) 155,556 jars 
D) 71,854 jars 
A) 150,000 jars 
B) 161,112 jars 
C) 155,556 jars 
D) 71,854 jars

Question 5

The direct materials quantity variance is part of the direct materials flexible budget variance that is caused by

Accepted Answer

A) wsing more or less material than the standard quantity allowed for actual production. 
B) applying too much overhead to production. 
C) having too much inventory in the storeroom. 
D) paying more or less than the standard cost per 
A) wsing more or less material than the standard quantity allowed for actual production. 
B) applying too much overhead to production. 
C) having too much inventory in the storeroom. 
D) paying more or less than the standard cost per

Question 6

Assembly line workers at Thompson Manufacturing worked a total of 8,800 direct labor hours to produce 36,000

Accepted Answer

A) $2,000 favorable 
B) $2,000 unfavorable 
C) $2,100 favorable 
D) $2,100 unfavorable 
A) $2,000 favorable 
B) $2,000 unfavorable 
C) $2,100 favorable 
D) $2,100 unfavorable

Question 7

Jensen manufactures speakers for car stereos and applies fixed overhead based on direct labor hours.Jensen's fixed overhead spending variance for the year was $12,500 favorable.For the current year,the company had budgeted to produce 124,000 speakers.Jensen's actual fixed overhead for the year was $378,100.Jensen produced 122,000 speakers and used 183,000 direct labor hours,which was the standard hours allowed for the number of speakers produced.What was Jensen's budgeted fixed overhead rate per direct labor hour for the year if necessary,round your answer to the nearest cent?

Accepted Answer

A) $2.00/DLH 
B) $2.10/DLH 
C) $2.07/DLH 
D) $2.03/DLH 
A) $2.00/DLH 
B) $2.10/DLH 
C) $2.07/DLH 
D) $2.03/DLH

Question 8

Hobart Company manufactures patio umbrellas.The direct labor standard for each umbrella is 1.25 direct labor hours at a standard rate of $12.00 per hour.During June,Hobart used 36,000 direct labor hours to produce 30,000 umbrellas.Hobart's direct labor payroll totaled $428,400.What is Hobart's direct labor rate variance for November?

Accepted Answer

A) $3,600 unfavorable 
B) $3,600 favorable 
C) $18,000 favorable 
D) $18,000 unfavorable 
A) $3,600 unfavorable 
B) $3,600 favorable 
C) $18,000 favorable 
D) $18,000 unfavorable

Question 9

While the sales manager may be ecstatic to learn he has beaten his sales goal,the production manager may not share that enthusiasm because having more sales than anticipated required overtime for workers and additional maintenance on some machinery.Managers use budgeting to control and evaluate their operations.Two types of budgets that are discussed in chapter 6 are the static budget and the flexible budget.How do the two budgets differ and explain how the flexible budget is used in evaluating performance.

Accepted Answer

A static budget variance presents only t

Question 10

Amos,Inc.uses a standard cost system with the following labor standards for one

Accepted Answer

Direct labor rate variance $32

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

The difference between actual sales volume and budgeted sales volume has nothing to do with the price and quantity variance.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following overhead variances is correctly paired with a possible explanation for that variance?

Accepted Answer

A) Favorable spending variance - efficient use of the activity base 
B) Favorable efficiency variance - paid less than expected for variable overhead items 
C) Unfavorable efficiency variance - paid more than expected for variable overhead items 
D) Unfavorable spending variance - used variable overhead items inefficiently 
A) Favorable spending variance - efficient use of the activity base 
B) Favorable efficiency variance - paid less than expected for variable overhead items 
C) Unfavorable efficiency variance - paid more than expected for variable overhead items 
D) Unfavorable spending variance - used variable overhead items inefficiently

Question 14

When analyzing direct materials price and quantity variances,the responsibility typically lies with

Accepted Answer

A) controller and CFO. 
B) purchasing manager and production manager. 
C) purchasing and cost accounting manager. 
D) sales manager and production manager. 
A) controller and CFO. 
B) purchasing manager and production manager. 
C) purchasing and cost accounting manager. 
D) sales manager and production manager.

Question 15

The direct materials quantity variance is the part of the direct materials flexible budget variance that is caused by using more or less material than the standard quantity allowed for actual production.

Accepted Answer

A) True 
 B)False

Question 16

The difference between the static budget sales revenue and the flexible budget sales revenue is referred to as the

Accepted Answer

A) flexible budget variance. 
B) static budget variance. 
C) sales price variance. 
D) sales volume variance. 
A) flexible budget variance. 
B) static budget variance. 
C) sales price variance. 
D) sales volume variance.

Question 17

Ledbetter's Adventures manufactures outdoor camp ovens.In planning for the coming year,the budget committee is considering three different sales targets: 2,000 ovens,2,400 ovens,and 2,600 ovens.Ovens sell for $280 each.The standard cost information for an oven is as follows:
   Required:
Prepare a flexible budget for the three sales levels under consideration.

Accepted Answer

The answer of Ledbetter's Adventures manufactures outdoor camp ovens.In planning...

Question 18

The sales volume variance is influenced most heavily by actions of the

Accepted Answer

A) budget committee. 
B) operations personnel. 
C) sales and marketing personnel. 
D) executives of the company. 
A) budget committee. 
B) operations personnel. 
C) sales and marketing personnel. 
D) executives of the company.

Question 19

The sales volume variance does not help managers understand

Accepted Answer

A) the effects of price changes on actual results. 
B) operational efficiency on actual results. 
C) either the effects of price changes on actual results or the operational efficiency on actual results. 
D) the impact of greater actual sales over budgeted sales. 
A) the effects of price changes on actual results. 
B) operational efficiency on actual results. 
C) either the effects of price changes on actual results or the operational efficiency on actual results. 
D) the impact of greater actual sales over budgeted sales.

Question 20

To identify a variance without indicating whether it is favorable F or unfavorable U does not indicate

Accepted Answer

A) the impact of the variance on operating income. 
B) the amount of the variance. 
C) whether the amount relates to price or quantity. 
D) whether the amount relates to rate of efficiency. 
A) the impact of the variance on operating income. 
B) the amount of the variance. 
C) whether the amount relates to price or quantity. 
D) whether the amount relates to rate of efficiency.

Nantucket,Inc.uses a standard cost system in which direct material is carried at standard cost.Standards for one

Adler Industries uses a standard cost system.Adler has established the following standards for one

The direct materials quantity variance is part of the direct materials flexible budget variance that is caused by

Assembly line workers at Thompson Manufacturing worked a total of 8,800 direct labor hours to produce 36,000

Amos,Inc.uses a standard cost system with the following labor standards for one

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

The difference between actual sales volume and budgeted sales volume has nothing to do with the price and quantity variance.

Which of the following overhead variances is correctly paired with a possible explanation for that variance?

When analyzing direct materials price and quantity variances,the responsibility typically lies with

The direct materials quantity variance is the part of the direct materials flexible budget variance that is caused by using more or less material than the standard quantity allowed for actual production.

The difference between the static budget sales revenue and the flexible budget sales revenue is referred to as the

The sales volume variance is influenced most heavily by actions of the

The sales volume variance does not help managers understand

To identify a variance without indicating whether it is favorable F or unfavorable U does not indicate

Accounting As a Tool for Management

Cost Behavior and Cost Estimation

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

Nantucket,Inc.uses a standard cost system in which direct material is carried at standard cost.Standards for one

Adler Industries uses a standard cost system.Adler has established the following standards for one

The direct materials quantity variance is part of the direct materials flexible budget variance that is caused by

Assembly line workers at Thompson Manufacturing worked a total of 8,800 direct labor hours to produce 36,000

Amos,Inc.uses a standard cost system with the following labor standards for one

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

The difference between actual sales volume and budgeted sales volume has nothing to do with the price and quantity variance.

Which of the following overhead variances is correctly paired with a possible explanation for that variance?

When analyzing direct materials price and quantity variances,the responsibility typically lies with

The direct materials quantity variance is the part of the direct materials flexible budget variance that is caused by using more or less material than the standard quantity allowed for actual production.

The difference between the static budget sales revenue and the flexible budget sales revenue is referred to as the

The sales volume variance is influenced most heavily by actions of the

The sales volume variance does not help managers understand

To identify a variance without indicating whether it is favorable F or unfavorable U does not indicate

Accounting As a Tool for Management

Cost Behavior and Cost Estimation

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