Question 1

________ is a carefully predetermined amount usually expressed on a per-unit basis.

Accepted Answer

A)  Variable marketing overhead 
B)  A flexible budget 
C)  A standard 
D)  Fixed factory overhead 
E)  A static budget 
A)  Variable marketing overhead 
B)  A flexible budget 
C)  A standard 
D)  Fixed factory overhead 
E)  A static budget

Question 2

In a manufacturing area of an organization; poor product design, problems with the quality of materials, and scheduling conflicts could result in

Accepted Answer

A)  a favourable materials efficiency variance. 
B)  a favourable labour efficiency variance. 
C)  a favourable materials effectiveness variance. 
D)  an unfavourable materials effectiveness variance. 
E)  an unfavourable materials efficiency variance. 
A)  a favourable materials efficiency variance. 
B)  a favourable labour efficiency variance. 
C)  a favourable materials effectiveness variance. 
D)  an unfavourable materials effectiveness variance. 
E)  an unfavourable materials efficiency variance.

Question 3

Use the information below to answer the following question(s).
Bates Corporation used the following data to evaluate their current operating system. The company sells items for $10 each and used a budgeted selling price of $10 per unit.
  
-What is the static-budget variance of operating income?

Accepted Answer

A)  $175,000 favourable 
B)  $195,000 unfavourable 
C)  $225,000 favourable 
D)  $200,000 unfavourable 
E)  $200,000 favourable 
A)  $175,000 favourable 
B)  $195,000 unfavourable 
C)  $225,000 favourable 
D)  $200,000 unfavourable 
E)  $200,000 favourable

Question 4

The following data for the Lewgrow Garden Supplies Company pertains to the production of 2,500 garden spades during March. The spade consists of a wooden handle and a metal forged tool that comes in contact with the ground.
Direct Materials (all materials purchased were used):
   Direct Manufacturing Labour:
   Required:
a. What is the standard direct material amount per garden spade?
b. What is the standard cost allowed for all units produced?
c. What is the total direct materials flexible-budget variance?
d. What is the direct material flexible-budget price variance?
e. What is the total actual cost of direct manufacturing labour?
f. What is the labour price variance for direct manufacturing labour?

Accepted Answer

The answer of The following data for the Lewgrow Garden...

Question 5

In a journal entry for a standard costing system that records favourable variances, to increase the relevant variance account

Accepted Answer

A)  causes a credit to Cost of Goods Sold. 
B)  decreases the Operating Income Account. 
C)  the variance account must be debited. 
D)  the variance account must be credited. 
E)  reduces the contra account. 
A)  causes a credit to Cost of Goods Sold. 
B)  decreases the Operating Income Account. 
C)  the variance account must be debited. 
D)  the variance account must be credited. 
E)  reduces the contra account.

Question 6

Use the information below to answer the following question(s).
Ames Golf Company used the following data to evaluate their current operating system. The company sells 1 pack of golf balls for $10 per pack. The $10 selling price is also the budgeted selling price.
  
-A company uses a static budget approach and the previous management accountant calculated the following information: Fixed costs variance $10,000 U; revenues variance $400,000 F; contribution margin variance $60,000 F Required: What is the total static-budget variance?

Accepted Answer

A)  $50,000 F 
B)  $50,000 U 
C)  $230,000 F 
D)  $230,000 U 
E)  $390,000 F 
A)  $50,000 F 
B)  $50,000 U 
C)  $230,000 F 
D)  $230,000 U 
E)  $390,000 F

Question 7

The flexible budget contains

Accepted Answer

A)  budgeted amounts for alternative levels of output. 
B)  actual amounts for budgeted output. 
C)  revenue based on budgeted quantity and actual unit price. 
D)  actual costs for planned output. 
E)  the difference between flexible and static budget fixed costs. 
A)  budgeted amounts for alternative levels of output. 
B)  actual amounts for budgeted output. 
C)  revenue based on budgeted quantity and actual unit price. 
D)  actual costs for planned output. 
E)  the difference between flexible and static budget fixed costs.

Question 8

Waddell Productions makes separate journal entries for all cost accounting related activities. It uses a standard cost system for all manufacturing items. For the month of June the following activities have taken place:
   Required:
Record the necessary journal entries to:
1. Record the materials purchases assuming that materials price variances are recorded at the time of purchase.
2. Record the materials placed into production.
3. Record the direct labour used in production.

Accepted Answer

The answer of Waddell Productions makes separate journal entries for...

Question 9

A favourable variance can be automatically interpreted as "good news."

Accepted Answer

A) True 
 B)False

Question 10

A variance is the difference between the actual result and a budgeted amount.

Accepted Answer

A) True 
 B)False

Question 11

Nicholas Company manufacturers TVs. Some of the company's data was misplaced. Use the
following information to replace the lost data:
   Required:
a. What are the respective flexible-budget revenues (A)?
b. What are the static-budget revenues (B)?
c. What are the actual variable costs (C)?
d. What is the total flexible-budget variance (D)?
e. What is the total sales-volume variance (E)?
f. What is the total static-budget variance?

Accepted Answer

a. $42,080 - $1,000 = $41,080
b. $41,080

Question 12

Price variances are considered to be the difference between the actual price and the budgeted price multiplied by the actual quantity of input goods or services.

Accepted Answer

A) True 
 B)False

Question 13

The process in which a company's products or services are measured relative to the best possible levels of performance is known as

Accepted Answer

A)  benchmarking. 
B)  measuring the performance gap. 
C)  standard measurement. 
D)  variance measurement. 
E)  budgeting. 
A)  benchmarking. 
B)  measuring the performance gap. 
C)  standard measurement. 
D)  variance measurement. 
E)  budgeting.

Question 14

The flexible-budget variance measures

Accepted Answer

A)  what the costs and revenues should have been for the budgeted number of outputs. 
B)  the difference between budgeted expenditures and actual expenditures for the budgeted number of outputs. 
C)  the difference between budgeted and actual variable costs. 
D)  [expected expenditures for the actual number of outputs] + [ the actual expenditures for the actual number of outputs]. 
E)  [actual cost for the actual level of the revenue or cost driver] - [budget unit amount × the actual level of the revenue or cost driver]. 
A)  what the costs and revenues should have been for the budgeted number of outputs. 
B)  the difference between budgeted expenditures and actual expenditures for the budgeted number of outputs. 
C)  the difference between budgeted and actual variable costs. 
D)  [expected expenditures for the actual number of outputs] + [ the actual expenditures for the actual number of outputs]. 
E)  [actual cost for the actual level of the revenue or cost driver] - [budget unit amount × the actual level of the revenue or cost driver].

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

If a company only reached 85% of their production goal, the 85% may be called the company's

Accepted Answer

A)  effectiveness rate. 
B)  efficiency rate. 
C)  goal achievement rate. 
D)  standard production rate. 
E)  variance rate. 
A)  effectiveness rate. 
B)  efficiency rate. 
C)  goal achievement rate. 
D)  standard production rate. 
E)  variance rate.

Question 17

General Insurance Company had a static budgeted operating income of $4.6 million; however, actual income was $3.0 million. What is the static budget variance of operating income?

Accepted Answer

A)  $1,000,000 favourable 
B)  $1,000,000 unfavourable 
C)  $1,600,000 favourable 
D)  $3,000,000 favourable 
E)  $1,600,000 unfavourable 
A)  $1,000,000 favourable 
B)  $1,000,000 unfavourable 
C)  $1,600,000 favourable 
D)  $3,000,000 favourable 
E)  $1,600,000 unfavourable

Question 18

Give at least three good reasons why an unfavourable efficiency variance for direct manufacturing labour might be reported.

Accepted Answer

Any three of the following:
a. More lowe

Question 19

Al's Boxes manufactures corrugated boxes. The standard materials allowed for each box is 0.5 kilograms of paper, which has a standard cost of $5 per kilogram. During April 10,000 kilograms were used to manufacture 19,500 boxes. The actual materials cost was $5.25 per kilogram.
Required:
a. Determine the materials price variance.
b. Determine the materials efficiency variance.

Accepted Answer

a. Price variance = ($5 - $5.2

Question 20

The relative amount of inputs used to reach a given level output is a measure of which of the following?

Accepted Answer

A)  effectiveness 
B)  selling price 
C)  purchase price 
D)  marketing efforts 
E)  efficiency 
A)  effectiveness 
B)  selling price 
C)  purchase price 
D)  marketing efforts 
E)  efficiency

________ is a carefully predetermined amount usually expressed on a per-unit basis.

In a manufacturing area of an organization; poor product design, problems with the quality of materials, and scheduling conflicts could result in

Use the information below to answer the following question(s). Bates Corporation used the following data to evaluate their current operating system. The company sells items for $10 each and used a budgeted selling price of $10 per unit. -What is the static-budget variance of operating income?

In a journal entry for a standard costing system that records favourable variances, to increase the relevant variance account

The flexible budget contains

A favourable variance can be automatically interpreted as "good news."

A variance is the difference between the actual result and a budgeted amount.

Price variances are considered to be the difference between the actual price and the budgeted price multiplied by the actual quantity of input goods or services.

The process in which a company's products or services are measured relative to the best possible levels of performance is known as

The flexible-budget variance measures

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

If a company only reached 85% of their production goal, the 85% may be called the company's

General Insurance Company had a static budgeted operating income of $4.6 million; however, actual income was $3.0 million. What is the static budget variance of operating income?

Give at least three good reasons why an unfavourable efficiency variance for direct manufacturing labour might be reported.

The relative amount of inputs used to reach a given level output is a measure of which of the following?

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets, Variances, and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Quantitative Analyses of Cost Functions

Decision Making and Relevant Information

Pricing Decisions, Product Profitability Decisions, and Cost Management

Strategy, Balanced Scorecard, and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, Rework, and Scrap

Cost Management: Quality, Time, and the Theory of Constraints

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Capital Budgeting: a Closer Look

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters

Exam 7: Flexible Budgets, Variances, and Management Control: I

________ is a carefully predetermined amount usually expressed on a per-unit basis.

In a manufacturing area of an organization; poor product design, problems with the quality of materials, and scheduling conflicts could result in

Use the information below to answer the following question(s). Bates Corporation used the following data to evaluate their current operating system. The company sells items for $10 each and used a budgeted selling price of $10 per unit. -What is the static-budget variance of operating income?

In a journal entry for a standard costing system that records favourable variances, to increase the relevant variance account

The flexible budget contains

A favourable variance can be automatically interpreted as "good news."

A variance is the difference between the actual result and a budgeted amount.

Price variances are considered to be the difference between the actual price and the budgeted price multiplied by the actual quantity of input goods or services.

The process in which a company's products or services are measured relative to the best possible levels of performance is known as

The flexible-budget variance measures

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

If a company only reached 85% of their production goal, the 85% may be called the company's

General Insurance Company had a static budgeted operating income of $4.6 million; however, actual income was $3.0 million. What is the static budget variance of operating income?

Give at least three good reasons why an unfavourable efficiency variance for direct manufacturing labour might be reported.

The relative amount of inputs used to reach a given level output is a measure of which of the following?

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets, Variances, and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Quantitative Analyses of Cost Functions

Decision Making and Relevant Information

Pricing Decisions, Product Profitability Decisions, and Cost Management

Strategy, Balanced Scorecard, and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, Rework, and Scrap

Cost Management: Quality, Time, and the Theory of Constraints

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Capital Budgeting: a Closer Look

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters