Exam 12: Flexible Budgets, Direct Cost Variances and Management Control

Answer the following questions using the information below: The Broken Hill Dustbusters Corporation manufactures two types of vacuum cleaners,the Terminator for commercial building use and the Dustmaid for residences.Budgeted and actual operating data for the year 2018 were as follows: Static Budget Terminator Dustmaid Total Number sold 5000 20000 25000 Contribution margin \ 1500000 \ 3000000 \ 4500000 Actual Results Terminator Dustmaid Total Number sold 4000 28000 32000 Contribution margin \ 1280000 \ 3920000 \ 5200000 Prior to the beginning of the year,a consulting firm estimated the total volume for vacuum cleaners of the Terminator and Dustmaid category to be 250 000 units,but actual industry volume was 256 000 units. -What is the total sales-quantity variance in terms of the contribution margin?

Answer the following questions using the information below: The Broken Hill Dustbusters Corporation manufactures two types of vacuum cleaners,the Terminator for commercial building use and the Dustmaid for residences.Budgeted and actual operating data for the year 2018 were as follows: Static Budget Terminator Dustmaid Total Number sold 5000 20000 25000 Contribution margin \ 1500000 \ 3000000 \ 4500000 Actual Results Terminator Dustmaid Total Number sold 4000 28000 32000 Contribution margin \ 1280000 \ 3920000 \ 5200000 Prior to the beginning of the year,a consulting firm estimated the total volume for vacuum cleaners of the Terminator and Dustmaid category to be 250 000 units,but actual industry volume was 256 000 units. -What is the total static-budget variance in terms of the contribution margin?

Answer the following questions using the information below: The Tornado Dust Removers Corporation manufactures two vacuum cleaners,the Standard and the Supreme.The following information was gathered about the two products: Standard Supreme Bud geted sales in urits 4000 1000 Bud geted selling price \ 300 \ 850 Bud geted contribution margin per unit \ 210 \ 550 Actual sales in units 3500 1500 Actual selling price \ 325 \ 840 -Which item is NOT used in the calculation of the market-share variance?

The relative amount of inputs used to achieve a given output level is called:

For using which of the following,standard costing systems are useful tool? Variant question

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

A favourable efficiency variance for direct materials might indicate:

Variance analysis is subject to the same benefit-cost test as all other phases of a management control system.

Companies implementing total quality management programs use standard costing to control materials costs.

A favourable price variance for direct materials indicates that:

If actual costs are much higher than budgeted,the variances indicate that _________ action is needed.

Answer the following questions using the information below: V8 Engineering Pty used the following data to evaluate their current operating system.The company sells items for $14.50 each and had used a budgeted selling price of $15 per unit. Actual Budgeted Units sold 206000 units 200000 units Variable costs \ 965000 \ 950000 Fixed costs \ 53000 \ 50000 -What is the static-budget variance of revenues?

_______________________ can be assumed and factored into changes in standards so they continue to provide challenging,but achievable,targets.

The static budget,or master budget,is based on the level of output planned at the end of the budget period before actual sales are known.

Answer the following questions using the information below: Wagga Wagga Printing Incorporated planned to use $12 of material per unit but actually used $14 of material per unit,and planned to make 1000 units but actually made 1200 units. -The sales-volume variance is:

The Chair Company produces two modular types of chairs: one for the residential market,and the other for the office market.Budgeted and actual operating data for the year 2018 are: Static Budget Residential Office Total Number of chairs sold 260000 140000 400000 Contribution margin \ 26000000 \ 11200000 \ 37200000 Actual Results Residential Office Total Number of chairs sold 248400 165600 414000 Contribution margin \ 22356000 \ 13248000 \ 35604000 During 2017,an office products research firm estimated the industry volume for residential and office chairs of the type sold by the Chair Company to be 2 400 000.Actual industry volume for the year 2018 was only 2 200 000 chairs. Required: Calculate the following variances in terms of contribution margin: a.Calculate the total static-budget variance,the total flexible-budget variance,and the total sales-volume variance. b.Calculate the sale-mix variance and the sales-quantity variance by type of chair,and in total. c.Calculate the market-share variance and market-size variance. _____________________________________________________________________________________________ _____________________________________________________________________________________________

Answer the following questions using the information below: Hobart Garden Centre provides the following information for the month of May: \begin{array} {c } &&&&&&&&&&&&&&&&& { \text { Actual } } & &&&&&{ \text { Budget } } \\ \end{array}\\ \begin{array} { l r r r r } & \text { Fuchsia } & \text { Dogwood } & \text { Fuchsia } & \text { Dogwood } \\ \text { Sales in units } & 10000 & 2500 & 8000 & 2000 \\ \text { Contribution margin per unit } & \$ 9 & \$ 7 & \$ 10 & \$ 8 \end{array} -What is the budgeted contribution margin per composite unit for the actual mix?

The __________ budget uses the expected per unit costs found in the standard cost sheet,so the only difference to the static budget is that it is based on the actual sales volume.

The formula, (Actual sales quantity in units - Static budget sales quantity in units)× Budgeted contribution margin per unit,is equal to the:

Answer the following questions using the information below: Ceylon Tea Products has an exclusive contract with West Sydney Tea Importers Corporation.Calamine and Ceylon are two brands of teas that are imported and sold to retail outlets.The following information is provided for the month of March: \begin{array}{c} &&&&&&&&&&&&&{ \text { Actual } } &&&&&&& { \text { Budget } } \\ \end{array}\\ \begin{array} { l r r r r r } & \text { Calamine } & \text { Ceylon } & & \text { Calamine } & \text { Ceylon } \\ \text { Sales in kg } & 1850 \mathrm {~kg} & 1650 \mathrm {~kg} & & 2000 \mathrm {~kg} & 1500 \mathrm {~kg} \\ \text { Price per kg } & \$ 2.50 & \$ 2.50 & & \$ 2.00 & \$ 3.00 \\ \text { Variable cost per kg } & \underline { 1.00 } & \underline { 2.00 } && \underline { 1.00 } & \underline { 1.50 } \\ \text { Contribution margin } & \underline {\$ 1.50} & \underline { \$ 0.50} & & \underline { \$ 1.00} & \underline { \$ 1.50} \end{array} Budgeted and actual fixed corporate-sustaining costs are $1750 and $2000,respectively. -What is the contribution margin for the flexible budget?