Question 1

A flexible budget is calculated at the end of the budget period.

Accepted Answer

A) True 
 B)False

Question 2

Employees logging in to production floor terminals and other modern technologies greatly facilitate the use of a standard costing system.

Accepted Answer

A) True 
 B)False

Question 3

A favorable efficiency variance for direct manufacturing labor indicates that:

Accepted Answer

A) a lower wage rate than planned was paid for direct labor 
B) a higher wage rate than planned was paid for direct labor 
C) less direct manufacturing labor-hours were used during production than planned for actual output 
D) more direct manufacturing labor-hours were used during production than planned for actual output 
A) a lower wage rate than planned was paid for direct labor 
B) a higher wage rate than planned was paid for direct labor 
C) less direct manufacturing labor-hours were used during production than planned for actual output 
D) more direct manufacturing labor-hours were used during production than planned for actual output

Question 4

Answer the following questions using the information below:
Sawyer Industries, Inc. (SII), developed standard costs for direct material and direct labor. In 2011, SII estimated the following standard costs for one of their major products, the 30-gallon heavy-duty plastic container.
   During July, SII produced and sold 5,000 containers using 1,100 pounds of direct materials at an average cost per pound of $24 and 525 direct manufacturing labor hours at an average wage of $14.75 per hour.
-July's direct material flexible-budget variance is:

Accepted Answer

A) $1,400 unfavorable 
B) $21,100 favorable 
C) $2,500 unfavorable 
D) None of these answers are correct. 
A) $1,400 unfavorable 
B) $21,100 favorable 
C) $2,500 unfavorable 
D) None of these answers are correct.

Question 5

When benchmarking it is best when management accountants simply analyze the costs and allow management to provide the insight as to why the revenues and costs differ between companies.

Accepted Answer

A) True 
 B)False

Question 6

The explanation that lower-quality materials were purchased is most likely for:

Accepted Answer

A) Material A 
B) Material B 
C) Material C 
D) both Material A and C 
A) Material A 
B) Material B 
C) Material C 
D) both Material A and C

Question 7

Explain the difference between a static budget and a flexible budget. Explain what is meant by a static budget variance and a flexible budget variance.

Accepted Answer

A static budget is one based on the leve

Question 8

The goal of variance analysis is for managers to understand why variances arise, to learn, and to improve future performance.

Accepted Answer

A) True 
 B)False

Question 9

Answer the following questions using the information below:
Brennen Incorporated planned to use $24 of material per unit but actually used $25 of material per unit, and planned to make 2,000 units but actually made 2,400 units.
-The flexible-budget variance is:

Accepted Answer

A) $9,600 favorable 
B) $2,400 unfavorable 
C) $10,000 unfavorable 
D) $12,000 favorable 
A) $9,600 favorable 
B) $2,400 unfavorable 
C) $10,000 unfavorable 
D) $12,000 favorable

Question 10

The president of the company, Gregory Peters, has come to you for help. Use the following data to prepare a flexible budget for possible sales/production levels of 10,000, 11,000, and 12,000 units. Show the contribution margin at each activity level.

Accepted Answer

The answer of The president of the company, Gregory Peters,...

Question 11

The sales-volume variance is due to:

Accepted Answer

A) using a different selling price from that budgeted 
B) inaccurate forecasting of units sold 
C) poor production performance 
D) Both A and B are correct. 
A) using a different selling price from that budgeted 
B) inaccurate forecasting of units sold 
C) poor production performance 
D) Both A and B are correct.

Question 12

Wilson's Winter Woolens manufactures jackets and other wool clothing. A certain designed ski parka requires the following:
   During the third quarter, the company made 1,500 parkas and used 3,150 square yards of fabric costing $39,375. Direct labor totaled 2,100 hours for $45,150.
Required:
a. Compute the direct materials price and efficiency variances for the quarter.
b. Compute the direct manufacturing labor price and efficiency variances for the quarter.

Accepted Answer

a. Direct materials

Question 13

Answer the following questions using the information below:
Manash Company manufactures tires. Some of the company's data was misplaced. Use the following information to replace the lost data:
  
-What is the total sales-volume variance (E)?

Accepted Answer

A) $14,960 unfavorable 
B) $5,600 unfavorable 
C) $3,760 favorable 
D) $14,960 favorable 
A) $14,960 unfavorable 
B) $5,600 unfavorable 
C) $3,760 favorable 
D) $14,960 favorable

Question 14

A variance is the difference between the actual cost for the current and expected (or budgeted)performance.

Accepted Answer

A) True 
 B)False

Question 15

Answer the following questions using the information below:
Manash Company manufactures tires. Some of the company's data was misplaced. Use the following information to replace the lost data:
  
-What amounts are reported for revenues in the flexible-budget (A)and the static-budget (B), respectively?

Accepted Answer

A) $164,320; $158,720 
B) $164,320; $169,920 
C) $169,920; $177,920 
D) $169,920; $166,720 
A) $164,320; $158,720 
B) $164,320; $169,920 
C) $169,920; $177,920 
D) $169,920; $166,720

Question 16

A standard input:

Accepted Answer

A) is a carefully determined price, cost, or quantity 
B) is usually expressed on a per unit basis 
C) may be developed using engineering studies 
D) All of these answers are correct. 
A) is a carefully determined price, cost, or quantity 
B) is usually expressed on a per unit basis 
C) may be developed using engineering studies 
D) All of these answers are correct.

Question 17

The use of high-quality raw materials is likely to result in a favorable efficiency variance and an unfavorable price variance.

Accepted Answer

A) True 
 B)False

Question 18

Answer the following questions using the information below:
Apple Valley Orchards, Inc. (AVO), developed standard costs for direct material and direct labor. In 2011, AVO estimated the following standard costs for one of their most well loved products, the AVO classic Grandma's large apple pie which had a brown sugar coating on the top of the crust as well as including cranberry and mince ingredients in addition to the apples.
   During September, AVO produced and sold 1,200 pies using 1,875 pounds of direct materials at an average cost per pound of $7.00 and 280 direct labor hours at an average wage of $14.25 per hour.
-September's direct material efficiency variance is:

Accepted Answer

A) $468.75 favorable 
B) $468.75 unfavorable 
C) $543.75 favorable 
D) $543.75 unfavorable 
A) $468.75 favorable 
B) $468.75 unfavorable 
C) $543.75 favorable 
D) $543.75 unfavorable

Question 19

The variance that LEAST affects cost control is the:

Accepted Answer

A) flexible-budget variance 
B) direct-material-price variance 
C) sales-volume variance 
D) direct manufacturing labor efficiency variance 
A) flexible-budget variance 
B) direct-material-price variance 
C) sales-volume variance 
D) direct manufacturing labor efficiency variance

Question 20

For critical items such as product defects, a small variance may prompt investigation.

Accepted Answer

A) True 
 B)False

A flexible budget is calculated at the end of the budget period.

Employees logging in to production floor terminals and other modern technologies greatly facilitate the use of a standard costing system.

A favorable efficiency variance for direct manufacturing labor indicates that:

When benchmarking it is best when management accountants simply analyze the costs and allow management to provide the insight as to why the revenues and costs differ between companies.

The explanation that lower-quality materials were purchased is most likely for:

Explain the difference between a static budget and a flexible budget. Explain what is meant by a static budget variance and a flexible budget variance.

The goal of variance analysis is for managers to understand why variances arise, to learn, and to improve future performance.

Answer the following questions using the information below: Brennen Incorporated planned to use $24 of material per unit but actually used $25 of material per unit, and planned to make 2,000 units but actually made 2,400 units. -The flexible-budget variance is:

The president of the company, Gregory Peters, has come to you for help. Use the following data to prepare a flexible budget for possible sales/production levels of 10,000, 11,000, and 12,000 units. Show the contribution margin at each activity level.

The sales-volume variance is due to:

Answer the following questions using the information below: Manash Company manufactures tires. Some of the company's data was misplaced. Use the following information to replace the lost data: -What is the total sales-volume variance (E)?

A variance is the difference between the actual cost for the current and expected (or budgeted)performance.

Answer the following questions using the information below: Manash Company manufactures tires. Some of the company's data was misplaced. Use the following information to replace the lost data: -What amounts are reported for revenues in the flexible-budget (A)and the static-budget (B), respectively?

A standard input:

The use of high-quality raw materials is likely to result in a favorable efficiency variance and an unfavorable price variance.

The variance that LEAST affects cost control is the:

For critical items such as product defects, a small variance may prompt investigation.

The Accountants Role in the Organization

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality, Time, and the Theory of Constraints

Inventory Management, Just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters

Exam 7: Flexible Budgets, Direct-Cost Variances, and Management Control

A flexible budget is calculated at the end of the budget period.

Employees logging in to production floor terminals and other modern technologies greatly facilitate the use of a standard costing system.

A favorable efficiency variance for direct manufacturing labor indicates that:

When benchmarking it is best when management accountants simply analyze the costs and allow management to provide the insight as to why the revenues and costs differ between companies.

The explanation that lower-quality materials were purchased is most likely for:

Explain the difference between a static budget and a flexible budget. Explain what is meant by a static budget variance and a flexible budget variance.

The goal of variance analysis is for managers to understand why variances arise, to learn, and to improve future performance.

Answer the following questions using the information below: Brennen Incorporated planned to use $24 of material per unit but actually used $25 of material per unit, and planned to make 2,000 units but actually made 2,400 units. -The flexible-budget variance is:

The president of the company, Gregory Peters, has come to you for help. Use the following data to prepare a flexible budget for possible sales/production levels of 10,000, 11,000, and 12,000 units. Show the contribution margin at each activity level.

The sales-volume variance is due to:

Answer the following questions using the information below: Manash Company manufactures tires. Some of the company's data was misplaced. Use the following information to replace the lost data: -What is the total sales-volume variance (E)?

A variance is the difference between the actual cost for the current and expected (or budgeted)performance.

Answer the following questions using the information below: Manash Company manufactures tires. Some of the company's data was misplaced. Use the following information to replace the lost data: -What amounts are reported for revenues in the flexible-budget (A)and the static-budget (B), respectively?

A standard input:

The use of high-quality raw materials is likely to result in a favorable efficiency variance and an unfavorable price variance.

The variance that LEAST affects cost control is the:

For critical items such as product defects, a small variance may prompt investigation.

The Accountants Role in the Organization

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality, Time, and the Theory of Constraints

Inventory Management, Just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters