Question 1

The flexible-budget variance may be the result of inaccurate forecasting of units sold.

Accepted Answer

A) True 
 B)False

Question 2

The direct manufacturing labour price variance is likely to be favourable if higher-skilled workers are put on a job.

Accepted Answer

A) True 
 B)False

Question 3

For the wet ingredients what are the material mix and yield variances respectively?

Accepted Answer

A)  $270 favourable/$180 unfavourable 
B)  $240 unfavourable/$360 favourable 
C)  $240 favourable/$360 unfavourable 
D)  $360 favourable/$240 unfavourable 
E)  $360 unfavourable/$240 favourable 
A)  $270 favourable/$180 unfavourable 
B)  $240 unfavourable/$360 favourable 
C)  $240 favourable/$360 unfavourable 
D)  $360 favourable/$240 unfavourable 
E)  $360 unfavourable/$240 favourable

Question 4

On the line in front of each variance, put the letter of the department that is most likely responsible for that variance. A letter may be used more than once or not at all.
A. Production department
B. Marketing department
C. Purchasing department
D. Personnel department

Accepted Answer

The answer of On the line in front of each...

Question 5

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.
   Variable costs:
   Fixed costs:

Accepted Answer

Flexible Budget for

Question 6

Use the information below to answer the following question(s).
A company makes table lamps, for which the following standards have been developed:
   During January, production of 100 lamps was expected, but 110 lamps were actually completed.
Direct materials purchased and used were 2,100 kilograms at an actual price of $2.20 per kilogram.
Direct labour cost for the month was $5,310, and the actual pay per hour was $9.00.
-What is the All Good Things Ltd. static-budget variance?

Accepted Answer

A)  $400 F 
B)  $400 U 
C)  $600 F 
D)  $200 F 
E)  $200 U 
A)  $400 F 
B)  $400 U 
C)  $600 F 
D)  $200 F 
E)  $200 U

Question 7

Littrell Company produces chairs and has determined the following direct cost categories and budgeted amounts:
   Actual performance for the company is shown below:
   Required:
a. What is the combined total of the flexible-budget variances?
b. What is the price variance of the direct materials?
c. What is the price variance of the direct manufacturing labour and the direct marketing labour, respectively?
d. What is the efficiency variance for direct materials?
e. What are the efficiency variances for direct manufacturing labour and direct marketing labour, respectively?

Accepted Answer

a.
 @#IMG-DLM& b. ($7.75 - $7.50) × (3,900) = $975

Question 8

Use the information below to answer the following question(s).
Robb Industries Inc. (RII), developed standard costs for direct material and direct labour. In 2013, RII estimated the following standard costs for one of their major products, the 10-litre plastic container.
   During June, RII produced and sold 5,000 containers using 490 kilograms of direct materials at an average actual cost per kilogram of $32 and 250 direct manufacturing labour-hours at an average actual wage of $15.25 per hour.
-June's direct material price variance is

Accepted Answer

A)  $980 unfavourable. 
B)  $1,000 favourable. 
C)  $680 favourable. 
D)  $980 favourable. 
E)  $1,000 unfavourable. 
A)  $980 unfavourable. 
B)  $1,000 favourable. 
C)  $680 favourable. 
D)  $980 favourable. 
E)  $1,000 unfavourable.

Question 9

Use the information below to answer the following question(s).
Sawyer Industries Inc. (SII), developed standard costs for direct material and direct labour. In 2013, SII estimated the following standard costs for one of their major products, the 30-litre heavy-duty plastic container.
   During July, SII produced and sold 10,000 containers using 2,200 kilograms of direct materials at an average actual cost per kilogram of $24 and 1,050 direct manufacturing labour hours at an average actual wage of $14.75 per hour.
-July's direct manufacturing labour price variance is

Accepted Answer

A)  $250.00 favourable. 
B)  $262.50 favourable. 
C)  $487.50 favourable. 
D)  $262.50 unfavourable. 
E)  $250.00 unfavourable. 
A)  $250.00 favourable. 
B)  $262.50 favourable. 
C)  $487.50 favourable. 
D)  $262.50 unfavourable. 
E)  $250.00 unfavourable.

Question 10

More insight into the efficiency variance for direct materials can be gained by subdividing it into the direct materials

Accepted Answer

A)  mix and volume variances. 
B)  market-share and market-size variances. 
C)  rate and usage variances. 
D)  price and efficiency variances. 
E)  mix and yield variances. 
A)  mix and volume variances. 
B)  market-share and market-size variances. 
C)  rate and usage variances. 
D)  price and efficiency variances. 
E)  mix and yield variances.

Question 11

The direct materials mix variance is the

Accepted Answer

A)  average of the direct materials mix variances for each input. 
B)  sum of the direct materials mix variances for each input. 
C)  difference between the direct materials mix variances for each input. 
D)  multiple of the direct materials mix variances for each input. 
E)  lesser of the direct materials yield variance and the direct materials efficiency variance. 
A)  average of the direct materials mix variances for each input. 
B)  sum of the direct materials mix variances for each input. 
C)  difference between the direct materials mix variances for each input. 
D)  multiple of the direct materials mix variances for each input. 
E)  lesser of the direct materials yield variance and the direct materials efficiency variance.

Question 12

Answer the following question(s) using the information below.
Abernathy 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 revenues?

Accepted Answer

A)  $20,000 favourable 
B)  $20,000 unfavourable 
C)  $2,000 favourable 
D)  $2,000 unfavourable 
E)  $25,000 unfavourable 
A)  $20,000 favourable 
B)  $20,000 unfavourable 
C)  $2,000 favourable 
D)  $2,000 unfavourable 
E)  $25,000 unfavourable

Question 13

The direct materials yield variance is the difference between: 1) the budgeted cost for the actual mix of the total quantity of direct materials used, and 2) the budgeted cost of the budgeted mix of the actual total quantity of direct materials used.

Accepted Answer

A) True 
 B)False

Question 14

Compute the total standard cost per book for Publisher's Company using the following information: Direct Materials: 1 ream of paper allowed per output unit manufactured, at $5.00 per ream.
Direct Mfg. Labour: 0.35 labour-hours of input allowed per output unit finished, at $17.50 standard cost per hour.
Variable Manufacturing Overhead: assigned on the basis of 0.25 per hour at $25 standard cost per hour per output unit finished.

Accepted Answer

A)  $11.13 per output unit 
B)  $14.63 per output unit 
C)  $17.38 per output unit. 
D)  $47.50 per output unit 
E)  $48.60 per output unit 
A)  $11.13 per output unit 
B)  $14.63 per output unit 
C)  $17.38 per output unit. 
D)  $47.50 per output unit 
E)  $48.60 per output unit

Question 15

Use the information below to answer the following question(s).
Sawyer Industries Inc. (SII), developed standard costs for direct material and direct labour. In 2013, SII estimated the following standard costs for one of their major products, the 30-litre heavy-duty plastic container.
   During July, SII produced and sold 10,000 containers using 2,200 kilograms of direct materials at an average actual cost per kilogram of $24 and 1,050 direct manufacturing labour hours at an average actual wage of $14.75 per hour.
-July's direct manufacturing labour efficiency variance is

Accepted Answer

A)  $750.00 unfavourable. 
B)  $262.50 favourable. 
C)  $487.50 favourable. 
D)  $750.00 favourable. 
E)  neither favourable or unfavourable. 
A)  $750.00 unfavourable. 
B)  $262.50 favourable. 
C)  $487.50 favourable. 
D)  $750.00 favourable. 
E)  neither favourable or unfavourable.

Question 16

Jackson Autoparts is a company that delivers automobile repair parts to service garages. The following information is for three of the company's activities in 2012:
   The output measure is the number of deliveries.
   Batch size in terms of deliveries:
   Required:
a. Calculate the flexible-budget variance for each activity in 2012.
b. Calculate the price and efficiency variances for each activity in 2012.

Accepted Answer

a. Flexible-budget variances
Receivables

Question 17

A variance is considered to be

Accepted Answer

A)  the gap between an actual result and a benchmark amount. 
B)  the required number of inputs for one standard output. 
C)  the difference between an actual result and a budget amount. 
D)  the difference between a budgeted amount and a standard amount. 
E)  a standard. 
A)  the gap between an actual result and a benchmark amount. 
B)  the required number of inputs for one standard output. 
C)  the difference between an actual result and a budget amount. 
D)  the difference between a budgeted amount and a standard amount. 
E)  a standard.

Question 18

Use the information below to answer the following question(s).
Sawyer Industries Inc. (SII), developed standard costs for direct material and direct labour. In 2013, SII estimated the following standard costs for one of their major products, the 30-litre heavy-duty plastic container.
   During July, SII produced and sold 10,000 containers using 2,200 kilograms of direct materials at an average actual cost per kilogram of $24 and 1,050 direct manufacturing labour hours at an average actual wage of $14.75 per hour.
-July's direct manufacturing labour flexible-budget variance is

Accepted Answer

A)  $750.00 unfavourable. 
B)  $262.50 favourable. 
C)  $262.50 unfavourable. 
D)  $487.50 favourable. 
E)  $487.50 unfavourable. 
A)  $750.00 unfavourable. 
B)  $262.50 favourable. 
C)  $262.50 unfavourable. 
D)  $487.50 favourable. 
E)  $487.50 unfavourable.

Question 19

Use the information below to answer the following question(s).
Sawyer Industries Inc. (SII), developed standard costs for direct material and direct labour. In 2013, SII estimated the following standard costs for one of their major products, the 30-litre heavy-duty plastic container.
   During July, SII produced and sold 10,000 containers using 2,200 kilograms of direct materials at an average actual cost per kilogram of $24 and 1,050 direct manufacturing labour hours at an average actual wage of $14.75 per hour.
-July's direct material efficiency variance is

Accepted Answer

A)  $4,800 favourable. 
B)  $2,200 favourable. 
C)  $5,000 unfavourable. 
D)  $5,000 favourable. 
E)  $4,800 unfavourable. 
A)  $4,800 favourable. 
B)  $2,200 favourable. 
C)  $5,000 unfavourable. 
D)  $5,000 favourable. 
E)  $4,800 unfavourable.

Question 20

Whistler Table Company manufactures tables for schools. The current year operating budget is based on sales of 20,000 units at $100 per table. Operating income is anticipated to be $120,000. Budgeted variable costs are $64 per unit while fixed costs total $600,000.
Actual income for the year was $354,000 on actual sales of 21,000 units. Actual variable costs were $60 per unit and fixed costs totaled $570,000.
Required:
Prepare a variance analysis report with both flexible-budget and sales-volume variances.

Accepted Answer

@#IMG-DLM& @#IMG-DLM& Total flexible budget varian

The flexible-budget variance may be the result of inaccurate forecasting of units sold.

The direct manufacturing labour price variance is likely to be favourable if higher-skilled workers are put on a job.

For the wet ingredients what are the material mix and yield variances respectively?

On the line in front of each variance, put the letter of the department that is most likely responsible for that variance. A letter may be used more than once or not at all. A. Production department B. Marketing department C. Purchasing department D. Personnel department

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. Variable costs: Fixed costs:

More insight into the efficiency variance for direct materials can be gained by subdividing it into the direct materials

The direct materials mix variance is the

Answer the following question(s) using the information below. Abernathy 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 revenues?

The direct materials yield variance is the difference between: 1) the budgeted cost for the actual mix of the total quantity of direct materials used, and 2) the budgeted cost of the budgeted mix of the actual total quantity of direct materials used.

A variance is considered to be

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

The flexible-budget variance may be the result of inaccurate forecasting of units sold.

The direct manufacturing labour price variance is likely to be favourable if higher-skilled workers are put on a job.

For the wet ingredients what are the material mix and yield variances respectively?

On the line in front of each variance, put the letter of the department that is most likely responsible for that variance. A letter may be used more than once or not at all. A. Production department B. Marketing department C. Purchasing department D. Personnel department

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. Variable costs: Fixed costs:

More insight into the efficiency variance for direct materials can be gained by subdividing it into the direct materials

The direct materials mix variance is the

Answer the following question(s) using the information below. Abernathy 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 revenues?

The direct materials yield variance is the difference between: 1) the budgeted cost for the actual mix of the total quantity of direct materials used, and 2) the budgeted cost of the budgeted mix of the actual total quantity of direct materials used.

A variance is considered to be

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