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: \[\begin{array} { l r r } & \text { Standard } & \text { Supreme } \\ \text { Bud geted sales in urits } & 4000 & 1000 \\ \text { Bud geted selling price } & \$ 300 & \$ 850 \\ \text { Bud geted contribution margin per unit } & \$ 210 & \$ 550 \\ \text { Actual sales in units } & 3500 & 1500 \\ \text { Actual selling price } & \$ 325 & \$ 840 \end{array}\] -What is the total sales-mix variance in terms of the contribution margin?

A) $278 000 favourable B) $170 000 favourable C) $448 000 favourable D) $110 000 favourable A) $278 000 favourable B) $170 000 favourable C) $448 000 favourable D) $110 000 favourable

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: \[\begin{array} { l r r r } \text { Static Budget } & \text { Terminator } & \text { Dustmaid } & \text { Total } \\ \text { Number sold } & 5000 & 20000 & 25000 \\ \text { Contribution margin } & \$ 1500000 & \$ 3000000 & \$ 4500000 \\ & & & \\ \text { Actual Results } & \text { Terminator } & \text { Dustmaid } & \text { Total } \\ \hline \text { Number sold } & 4000 & 28000 & 32000 \\ \text { Contribution margin } & \$ 1280000 & \$ 3920000 & \$ 5200000 \end{array}\] 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 flexible-budget variance in terms of the contribution margin?

A) $360 000 unfavourable B) $900 000 favourable C) $200 000 unfavourable D) $700 000 favourable A) $360 000 unfavourable B) $900 000 favourable C) $200 000 unfavourable D) $700 000 favourable

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: \[\begin{array} { l r r } & \text { Standard } & \text { Supreme } \\ \text { Bud geted sales in urits } & 4000 & 1000 \\ \text { Bud geted selling price } & \$ 300 & \$ 850 \\ \text { Bud geted contribution margin per unit } & \$ 210 & \$ 550 \\ \text { Actual sales in units } & 3500 & 1500 \\ \text { Actual selling price } & \$ 325 & \$ 840 \end{array}\] -The market-share variance will be favourable when:

A) actual market size in units is less than budgeted market size in units. B) the actual market share is greater than the budgeted market share. C) the flexible-budget contribution margin is greater than the static-budget contribution margin. D) actual unit sales are less than budgeted unit sales. A) actual market size in units is less than budgeted market size in units. B) the actual market share is greater than the budgeted market share. C) the flexible-budget contribution margin is greater than the static-budget contribution margin. D) actual unit sales are less than budgeted unit sales.

Answer the following questions using the information below: Bland 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. \[\begin{array} { l r r } & \text { Actual } & \text { Budgeted } \\ \text { Units sold } & 184000 \text { units } & 180000 \text { units } \\ \text { Variable costs } & \$ 901600 & \$ 864000 \\ \text { Fixed costs } & \$ 190000 & \$ 200000 \end{array}\] -What is the static-budget variance of variable costs?

A) $40 000 favourable B) $37 600 unfavourable C) $2400 unfavourable D) $2400 favourable A) $40 000 favourable B) $37 600 unfavourable C) $2400 unfavourable D) $2400 favourable

Answer the following questions using the information below: Hunter Valley Orchards (HVO),developed standard costs for direct material and direct labour.In 2018,HVO estimated the following standard costs for one of their most well-loved products,the HVO 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. \[\begin{array} { l l l } & \text { Budgeted quantity } & \text { Budgeted price } \\ \text { Direct materials } & 1.5 \mathrm {~kg} & \$ 7.25 \text { per } \mathrm { kg } \\ \text { Direct labour } & 0.25 \text { hours } & \$ 14.00 \text { per hour } \end{array}\] During September,HVO produced and sold 1200 pies using 1875 kg of direct materials at an average cost per kg of $7.00 and 280 direct labour hours at an average wage of $14.25 per hour. -September's direct material price variance is:

A) $468.75 favourable. B) $75.00 unfavourable. C) $468.75 unfavourable. D) None of these answers are correct. A) $468.75 favourable. B) $75.00 unfavourable. C) $468.75 unfavourable. D) None of these answers are correct.

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: \[\begin{array} { l r r } & \text { Standard } & \text { Supreme } \\ \text { Bud geted sales in urits } & 4000 & 1000 \\ \text { Bud geted selling price } & \$ 300 & \$ 850 \\ \text { Bud geted contribution margin per unit } & \$ 210 & \$ 550 \\ \text { Actual sales in units } & 3500 & 1500 \\ \text { Actual selling price } & \$ 325 & \$ 840 \end{array}\] -What is the total sales-quantity variance in terms of the contribution margin?

A) $278 000 favourable B) $170 000 favourable C) $110 000 favourable D) Nil variance A) $278 000 favourable B) $170 000 favourable C) $110 000 favourable D) Nil variance

Answer the following questions using the information below: Shepparton Water Sports has prepared the following flexible budget for September and is in the process of interpreting the variances.F denotes a favourable variance and U denotes an unfavourable variance. \[\begin{array} { l r r r } & \text { Flexible } & { \text { Variances } } \\ & \underline { \text { Budget } } & \text { Price } & \text { Efficlency } \\ \text { Material A } & \$ 20000 & \$ 1000 \mathrm {~F} & \$ 3000 \mathrm { U } \\ \text { Material B } & 30000 & 500 \mathrm { U } & 1500 \mathrm {~F} \\ \text { Direct mantufacturing labour } & 40000 & 500 \mathrm { U } & 2500 \mathrm {~F} \end{array}\] -The MOST likely explanation of the above variances for Material A is that:

A) the company used a higher-priced supplier. B) higher-quality raw materials were used than were planned. C) Material A used during September was $2000 less than expected. D) a lower price than expected was paid for Material A. A) the company used a higher-priced supplier. B) higher-quality raw materials were used than were planned. C) Material A used during September was $2000 less than expected. D) a lower price than expected was paid for Material A.

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

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} -For May,Hobart will report a(n):

(Multiple Choice)

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Question 41

The flexible-budget variance for direct cost inputs can be further subdivided into a:

(Multiple Choice)

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Question 42

To control a production process,supervisors cannot wait for an accounting report with variances reported in:

(Multiple Choice)

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Question 43

An underemphasis on performance evaluation and meeting individual variance targets can undermine learning and continuous improvement.

(True/False)

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Question 44

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 -What is the total sales-mix variance in terms of the contribution margin?

(Multiple Choice)

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Question 45

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 flexible-budget variance in terms of the contribution margin?

(Multiple Choice)

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Question 46

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 -The market-share variance will be favourable when:

(Multiple Choice)

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Question 47

Answer the following questions using the information below: Bland 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. Actual Budgeted Units sold 184000 units 180000 units Variable costs \ 901600 \ 864000 Fixed costs \ 190000 \ 200000 -What is the static-budget variance of variable costs?

(Multiple Choice)

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Question 48

Although computed separately,price variances and efficiency variances should not be analysed separately from each other.

(True/False)

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Question 49

Answer the following questions using the information below: Hunter Valley Orchards (HVO),developed standard costs for direct material and direct labour.In 2018,HVO estimated the following standard costs for one of their most well-loved products,the HVO 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. Budgeted quantity Budgeted price Direct materials 1.5 \ 7.25 per Direct labour 0.25 hours \ 14.00 per hour During September,HVO produced and sold 1200 pies using 1875 kg of direct materials at an average cost per kg of $7.00 and 280 direct labour hours at an average wage of $14.25 per hour. -September's direct material price variance is:

(Multiple Choice)

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Question 50

A(n)__________________ on performance evaluation may also cause managers to take actions to achieve the budget and avoid an unfavourable variance,even if such actions could hurt the company in the long run.

(Multiple Choice)

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Question 51

How does variance analysis help with activity-based costing. _ _

(Essay)

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Question 52

The sales-mix variance results from a difference between the:

(Multiple Choice)

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Question 53

What might be unfavourable flexible-budget variance for variable costs the result of? Variant question

(Multiple Choice)

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Question 54

From the perspective of control,all variances are isolated at the _____________ time.

(Multiple Choice)

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Question 55

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 -What is the total sales-quantity variance in terms of the contribution margin?

(Multiple Choice)

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Question 56

Sometimes a favourable direct materials efficiency variance may signal a need to change product strategy,perhaps because the product cannot be made at a low enough cost.

(True/False)

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Question 57

Answer the following questions using the information below: Shepparton Water Sports has prepared the following flexible budget for September and is in the process of interpreting the variances.F denotes a favourable variance and U denotes an unfavourable variance. Flexible Variances Price Efficlency Material A \ 20000 \ 1000 \ 3000 Material B 30000 500 1500 Direct mantufacturing labour 40000 500 2500 -The MOST likely explanation of the above variances for Material A is that:

(Multiple Choice)

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Question 58

Some of the individual variances are favourable (F)and some variances are unfavourable (U).

(True/False)

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Question 59

Geelong Electronics manufactures TVs and DVD players.During February,the following activities occurred: TVs DVDs Budgeted units sold 17640 66360 Budgeted contribution margin per unit \ 90 \ 156 Actual units sold 20000 80000 Actual contribution margin per unit \ 100 \ 158 Required: Compute the following variances in terms of the contribution margin. a.Determine the total sales-mix variance. b.Determine the total sales-quantity variance. c.Determine the total sales-volume variance. _ _

(Essay)

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Question 60

The flexible-budget variance for direct cost inputs can be further subdivided into a:

To control a production process,supervisors cannot wait for an accounting report with variances reported in:

An underemphasis on performance evaluation and meeting individual variance targets can undermine learning and continuous improvement.

Although computed separately,price variances and efficiency variances should not be analysed separately from each other.

A(n)__________________ on performance evaluation may also cause managers to take actions to achieve the budget and avoid an unfavourable variance,even if such actions could hurt the company in the long run.

How does variance analysis help with activity-based costing. _ _

The sales-mix variance results from a difference between the:

What might be unfavourable flexible-budget variance for variable costs the result of? Variant question

From the perspective of control,all variances are isolated at the _____________ time.

Sometimes a favourable direct materials efficiency variance may signal a need to change product strategy,perhaps because the product cannot be made at a low enough cost.

Some of the individual variances are favourable (F)and some variances are unfavourable (U).

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

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

Measuring and Reporting Sustainability

Filters

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

The flexible-budget variance for direct cost inputs can be further subdivided into a:

To control a production process,supervisors cannot wait for an accounting report with variances reported in:

An underemphasis on performance evaluation and meeting individual variance targets can undermine learning and continuous improvement.

Although computed separately,price variances and efficiency variances should not be analysed separately from each other.

A(n)__________________ on performance evaluation may also cause managers to take actions to achieve the budget and avoid an unfavourable variance,even if such actions could hurt the company in the long run.

How does variance analysis help with activity-based costing. _____________________________________________________________________________________________ _____________________________________________________________________________________________

The sales-mix variance results from a difference between the:

What might be unfavourable flexible-budget variance for variable costs the result of? Variant question

From the perspective of control,all variances are isolated at the _____________ time.

Sometimes a favourable direct materials efficiency variance may signal a need to change product strategy,perhaps because the product cannot be made at a low enough cost.

Some of the individual variances are favourable (F)and some variances are unfavourable (U).

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

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

Measuring and Reporting Sustainability

Filters

How does variance analysis help with activity-based costing. _ _