Question 1

The flexible budget variance is influenced most heavily by forces external to the operating process.

Accepted Answer

A) True 
 B)False

Question 2

Johnston Manufacturing Company purchased 14,000 switches to make 6,000

Accepted Answer

A) $500 favorable 
B) $600 favorable 
C) $625 favorable 
D) $700 favorable 
A) $500 favorable 
B) $600 favorable 
C) $625 favorable 
D) $700 favorable

Question 3

The flexible budget variance is influenced most heavily by actions of the

Accepted Answer

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

Question 4

R&N Manufacturing produces music boxes.This year's budget was based on the production of 3,000 music boxes using a standard of 3 direct labor hours per music box and $3.10 variable overhead per direct labor hour.R&N incurred 9,500 hours to produce 2,950 music boxes.If actual variable overhead for the year is $32,000,what is R&N's variable overhead spending variance?

Accepted Answer

A) $2,550 favorable 
B) $2,550 unfavorable 
C) $4,100 favorable 
D) $4,100 unfavorable 
A) $2,550 favorable 
B) $2,550 unfavorable 
C) $4,100 favorable 
D) $4,100 unfavorable

Question 5

Academy Awards makes plaques and trophies.Last year the company's direct labor payroll totaled $140,000 for 17,300 direct labor hours.The standard wage rate is $7.75 per direct labor hour.
Required:
Calculate Academy Awards' direct labor rate variance for the period.

Accepted Answer

$140,000 -

Question 6

Holly Industries manufactures artificial holiday wreaths.Its most popular wreath requires 3 yards of artificial pine boughs and 15 sprigs of holly berries.In August,the company purchased 4,000 yards of artificial pine bough,and 20,000 sprigs of holly berries.Holly paid $2.65 per yard for the artificial pine bough,and purchased 4 boxes of 5,000 sprigs of holly berries for $7,000 per box.The standard price for artificial pine bough is $2.60 per yard,and the standard price per sprig of holly berry is $1.45.During August,Holly produced 1,250 wreaths and used 3,625 yards of artificial pine bough and 19,000 sprigs of holly berries.What is Holly's direct materials price variance for artificial pine boughs for August?

Accepted Answer

A) $200 favorable 
B) $200 unfavorable 
C) $325 favorable 
D) $325 unfavorable 
A) $200 favorable 
B) $200 unfavorable 
C) $325 favorable 
D) $325 unfavorable

Question 7

A static budget is one that

Accepted Answer

A) is based on the actual sales volume achieved during the period. 
B) is developed for a single level of expected output. 
C) is one component of the operating budget. 
D) is always used to compare with the actual results. 
A) is based on the actual sales volume achieved during the period. 
B) is developed for a single level of expected output. 
C) is one component of the operating budget. 
D) is always used to compare with the actual results.

Question 8

If the actual price of direct materials is $200 and the standard price of the direct materials is $180,

Accepted Answer

A) there will be no direct materials quantity variance. 
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) there will be no direct materials quantity variance. 
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 9

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) $14,000 favorable 
B) $14,000 unfavorable 
C) $16,000 favorable 
D) $30,000 unfavorable 
A) $14,000 favorable 
B) $14,000 unfavorable 
C) $16,000 favorable 
D) $30,000 unfavorable

Question 10

Which of the following is a possible reason why actual prices might differ from standard prices,resulting in a direct materials price variance?

Accepted Answer

A) The company may receive a discount for materials that are purchased in large quantities. 
B) The company may receive a reduced price from a new vendor to generate business. 
C) The vendors may change their prices as a result of changes in the market. 
D) All of these answer choices are correct. 
A) The company may receive a discount for materials that are purchased in large quantities. 
B) The company may receive a reduced price from a new vendor to generate business. 
C) The vendors may change their prices as a result of changes in the market. 
D) All of these answer choices are correct.

Question 11

Which of the following is not a factor that could influence worker productivity?

Accepted Answer

A) Machine breakdowns 
B) A lack of adequate supervision 
C) The amount of automation used in the production process 
D) Workers that are working overtime 
A) Machine breakdowns 
B) A lack of adequate supervision 
C) The amount of automation used in the production process 
D) Workers that are working overtime

Question 12

The major factor in the amount of material used in production is the quality of the material.

Accepted Answer

A) True 
 B)False

Question 13

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 14

R&N Manufacturing produces music boxes.The fixed overhead rate is $5.10 per direct labor hour,and the company budgeted for 4,400 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) $560 favorable 
B) $560 unfavorable 
C) $1,480 favorable 
D) $1,480 unfavorable 
A) $560 favorable 
B) $560 unfavorable 
C) $1,480 favorable 
D) $1,480 unfavorable

Question 15

Casper Concrete manufactures custom concrete countertops for restaurants and individual homeowners.Casper's actual fixed overhead for the year was $86,600.During the year Casper produced 8,500 square feet of countertop and used 4,420 direct labor hours.Casper had budgeted to produce 9,000 square feet of countertop and had budgeted to use 4,500 direct labor hours.Casper's fixed overhead spending variance was $1,200 unfavorable for the year.What was Casper's budgeted fixed overhead for the year if necessary,round your answer to the nearest dollar?

Accepted Answer

A) $87,800 
B) $85,400 
C) $88,167 
D) $86,967 
A) $87,800 
B) $85,400 
C) $88,167 
D) $86,967

Question 16

Which of the following is typically held responsible for direct labor rate variances?

Accepted Answer

A) The human resources manager 
B) The controller 
C) The production manager 
D) The line supervisor in the factory 
A) The human resources manager 
B) The controller 
C) The production manager 
D) The line supervisor in the factory

Question 17

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

Question 18

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 answer 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 answer choices are correct.

Question 19

An unfavorable variance is a variance that decreases operating income relative to the budgeted amount.

Accepted Answer

A) True 
 B)False

Question 20

The flexible budget variance reflects

Accepted Answer

A) how efficiently the company operated in producing a given level of sales. 
B) how effectively the company reached its strategic goals. 
C) a different volume of products than that specified in the static budget. 
D) only favorable variances. 
A) how efficiently the company operated in producing a given level of sales. 
B) how effectively the company reached its strategic goals. 
C) a different volume of products than that specified in the static budget. 
D) only favorable variances.

The flexible budget variance is influenced most heavily by forces external to the operating process.

Johnston Manufacturing Company purchased 14,000 switches to make 6,000

The flexible budget variance is influenced most heavily by actions of the

Academy Awards makes plaques and trophies.Last year the company's direct labor payroll totaled $140,000 for 17,300 direct labor hours.The standard wage rate is $7.75 per direct labor hour. Required: Calculate Academy Awards' direct labor rate variance for the period.

A static budget is one that

If the actual price of direct materials is $200 and the standard price of the direct materials is $180,

Which of the following is a possible reason why actual prices might differ from standard prices,resulting in a direct materials price variance?

Which of the following is not a factor that could influence worker productivity?

The major factor in the amount of material used in production is the quality of the material.

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

Which of the following is typically held responsible for direct labor rate variances?

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

An unfavorable variance is a variance that decreases operating income relative to the budgeted amount.

The flexible budget variance reflects

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

Exam 6: Performance Evaluation: Variance Analysis

The flexible budget variance is influenced most heavily by forces external to the operating process.

Johnston Manufacturing Company purchased 14,000 switches to make 6,000

The flexible budget variance is influenced most heavily by actions of the

Academy Awards makes plaques and trophies.Last year the company's direct labor payroll totaled $140,000 for 17,300 direct labor hours.The standard wage rate is $7.75 per direct labor hour. Required: Calculate Academy Awards' direct labor rate variance for the period.

A static budget is one that

If the actual price of direct materials is $200 and the standard price of the direct materials is $180,

Which of the following is a possible reason why actual prices might differ from standard prices,resulting in a direct materials price variance?

Which of the following is not a factor that could influence worker productivity?

The major factor in the amount of material used in production is the quality of the material.

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

Which of the following is typically held responsible for direct labor rate variances?

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

An unfavorable variance is a variance that decreases operating income relative to the budgeted amount.

The flexible budget variance reflects

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