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 labour efficiency variance is:

A) $280.00 favourable. B) $210.00 favourable. C) $210.00 unfavourable. D) $280.00 unfavourable. A) $280.00 favourable. B) $210.00 favourable. C) $210.00 unfavourable. D) $280.00 unfavourable.

Answer the following questions using the information below: Bathurst Company manufactures remote control devices for garage doors.The following information was collected during June: \[\begin{array} { l r } \text { Actual market size (urits) } & 10000 \\ \text { Actual market share } & 32 \% \\ \text { Actual average selling price } & \$ 10.00 \\ \text { Budgeted market size (units) } & 11000 \\ \text { Budgeted market share } & 30 \% \\ \text { Budgeted average selling price } & \$ 11.00 \\ \text { Budgeted contribution margin per } & \\ \text { composite unit for budgeted mix } & \$ 4.00 \end{array}\] -What is the market-size variance?

A) $1600 F B) $1200 U C) $1000 F D) $500 U A) $1600 F B) $1200 U C) $1000 F D) $500 U

Answer the following questions using the information below: As part of the budgeting process,Lillee's Petanque Company developed the following static budget for August.Lillee is in the process of preparing the flexible budget and understanding the results.The actual results are for the month of August. $\begin{array}{lrlr} &\text { Actual } & \text { Flexible } & \text { Static } \\ &\text { Results } & \text { Budget } & \text { Budget }\\ \text { Sales volume (in units) } & 20000 &\underline{\quad\quad} & 25000 \\ & & & \\ \text { Sales revenues } & \$ 1000000 & \$ & \$ 1250000 \\ \text { Variable costs } & \underline{512000} & \$ \underline{\quad\quad}& \underline{600000} \\ & & & \\ \text { Contribution margin } & 488000 & \$ & 650000 \\ & & &\\ \text { Fixed costs } & 458000 & \$ \underline{\quad\quad}& 450000 \\ \text { Operating profit } & \$ 30000 & \$ \underline{\quad\quad}& \$ 200000 \end{array}$ -The flexible budget will report ________ for variable costs.

A) $640 000 B) $600 000 C) $480 000 D) $512 000 A) $640 000 B) $600 000 C) $480 000 D) $512 000

Answer the following questions using the information below: Robert Jones Industries (RJ),developed standard costs for direct material and direct labour.In 2018,RJ estimated the following standard costs for one of their major products,the 10-litre wine barrel. \[\begin{array} { l l l } & \text { Budgeted quantity } & \text { Budgeted price } \\ \text { Direct materials } & 0.10 \mathrm {~kg} & \$ 30 \text { per } \mathrm { kg } \\ \text { Direct labour } & 0.05 \text { hours } & \$ 15 \text { per hour } \end{array}\] During June,RJ produced and sold 5000 containers using 490 kg of direct materials at an average cost per kg of $32 and 250 direct manufacturing labour-hours at an average wage of $15.25 per hour. -June's direct material efficiency variance is:

A) $680 favourable. B) $300 favourable. C) $980 unfavourable. D) None of these answers are correct. A) $680 favourable. B) $300 favourable. C) $980 unfavourable. D) None of these answers are correct.

Mildura Company produces wine caskets and has determined the following direct cost categories and budgeted amounts: $\begin{array}{llr} & \text { Standard Inputs } & \text { Standard Cost } \\ \text { Category } & \text { for 1 output } & \text { per input }\\ \text { Direct Materials } & 1.00 & \$ 7.50 \\ \text { Direct labour } & 0.30 & 9.00 \\ \text { Direct Marketing } & 0.50 & 3.00 \end{array}$ $\text { Actual performance for the company is shown below: }$ $\begin{array}{lr} \text {Actual output: (in units)}&4000\\ \text {Direct Materials:}\\ \text { Materials costs } & \$ 30225 \\ \text { Input purchased and used } & 3900 \\ \text { Actual price per input } & \$ 7.75\\ \text { Direct Manufacturing labour: }\\ \text { Labour costs } & & \$ 11470 \\ \text { Labour-hours of input } & 1240 & \\ \text { Actual price per hour } & \$ 9.25 &\\ \text { Direct Marketing labour: }\\ \text { Labour costs } & & \$ 5880 \\ \text { Labour-hours of input } & 2100 & \\ \text { Actual price per hour } & \$ 2,80 & \end{array}$ 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? _____________________________________________________________________________________________ _____________________________________________________________________________________________

a.\[\begin{array} { l r r r r } & \text

Answer the following questions using the information below: Cootamundra Industries (CI),developed standard costs for direct material and direct labour.In 2018,CI estimated the following standard costs for one of their major products,the 30-litre heavy-duty plastic container. \[\begin{array} { l l l } & \text { Budgeted quantity } & \text { Budgeted price } \\ \text { Direct materials } & 0.20 \mathrm {~kg} & \$ 26 \text { per } \mathrm { kg } \\ \text { Direct labour } & 0.10 \text { hours } & \$ 14 \text { per hour } \end{array}\] During July,CI produced and sold 10 000 containers using 2200 kg of direct materials at an average cost per kg of $24 and 1050 direct manufacturing labour hours at an average wage of $14.75 per hour. -July's direct material price variance is:

A) $800 favourable. B) $4400 favourable. C) $5200 unfavourable. D) None of these answers are correct. A) $800 favourable. B) $4400 favourable. C) $5200 unfavourable. D) None of these answers are correct.

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

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 labour efficiency variance is:

(Multiple Choice)

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Question 61

When will be the sales-mix variance unfavourable? Variant question

(Multiple Choice)

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Question 62

A company that has an ABC system and batch level direct costs cannot benefit from variance analysis.

(True/False)

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Question 63

The budgeted contribution margin per composite unit for the budgeted mix can be calculated by dividing the:

(Multiple Choice)

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Question 64

Answer the following questions using the information below: Bathurst Company manufactures remote control devices for garage doors.The following information was collected during June: Actual market size (urits) 10000 Actual market share 32\% Actual average selling price \ 10.00 Budgeted market size (units) 11000 Budgeted market share 30\% Budgeted average selling price \ 11.00 Budgeted contribution margin per composite unit for budgeted mix \ 4.00 -What is the market-size variance?

(Multiple Choice)

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Question 65

The textbook,in a summary diagram,Figure 11-7,discusses four levels of variances.Briefly explain the meaning of levels 1,2 and 3 and provide an example of a variance at each of those levels. _ _

(Essay)

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Question 66

Answer the following questions using the information below: As part of the budgeting process,Lillee's Petanque Company developed the following static budget for August.Lillee is in the process of preparing the flexible budget and understanding the results.The actual results are for the month of August. Actual Flexible Static Results Budget Budget Sales volume (in units) 20000 25000 Sales revenues \ 1000000 \ \ 1250000 Variable costs \ Contribution margin 488000 \ 650000 Fixed costs 458000 \ 450000 Operating profit \ 30000 \ \ 200000 -The flexible budget will report ________ for variable costs.

(Multiple Choice)

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Question 67

Very few companies use a combination of financial and non-financial performance measures for planning and control.

(True/False)

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Question 68

An unfavourable sales-mix variance would MOST likely be caused by:

(Multiple Choice)

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Question 69

Answer the following questions using the information below: Robert Jones Industries (RJ),developed standard costs for direct material and direct labour.In 2018,RJ estimated the following standard costs for one of their major products,the 10-litre wine barrel. Budgeted quantity Budgeted price Direct materials 0.10 \ 30 per Direct labour 0.05 hours \ 15 per hour During June,RJ produced and sold 5000 containers using 490 kg of direct materials at an average cost per kg of $32 and 250 direct manufacturing labour-hours at an average wage of $15.25 per hour. -June's direct material efficiency variance is:

(Multiple Choice)

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Question 70

When will be the sales-mix variance favourable? Variant question

(Multiple Choice)

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Question 71

The sales-volume variance is the difference between a flexible-budget amount and the corresponding static-budget amount (our initial prediction before actual results were known).

(True/False)

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Question 72

What type of performance measures for planning and control do almost all companies use in addition to financial measures? Variant question

(Multiple Choice)

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Question 73

Mildura Company produces wine caskets and has determined the following direct cost categories and budgeted amounts: Standard Inputs Standard Cost Category for 1 output per input Direct Materials 1.00 \ 7.50 Direct labour 0.30 9.00 Direct Marketing 0.50 3.00 $\text { Actual performance for the company is shown below: }$ Actual output: (in units) 4000 Direct Materials: Materials costs \ 30225 Input purchased and used 3900 Actual price per input \ 7.75 Direct Manufacturing labour: Labour costs \ 11470 Labour-hours of input 1240 Actual price per hour \ 9.25 Direct Marketing labour: Labour costs \ 5880 Labour-hours of input 2100 Actual price per hour \ 2,80 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? _ _

(Essay)

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Question 74

Answer the following questions using the information below: Tiger O'Reilly planned to use $85 of material per unit but actually used $82 of material per unit,and planned to make 1200 units but actually made 1000 units. -The sales-volume variance is:

(Multiple Choice)

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Question 75

The variances that should be investigated by management include:

(Multiple Choice)

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Question 76

The only difference between the static budget and flexible budget is that the static budget is prepared using planned output.

(True/False)

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Question 77

The sales-volume variance is due to:

(Multiple Choice)

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Question 78

Answer the following questions using the information below: Cootamundra Industries (CI),developed standard costs for direct material and direct labour.In 2018,CI estimated the following standard costs for one of their major products,the 30-litre heavy-duty plastic container. Budgeted quantity Budgeted price Direct materials 0.20 \ 26 per Direct labour 0.10 hours \ 14 per hour During July,CI produced and sold 10 000 containers using 2200 kg of direct materials at an average cost per kg of $24 and 1050 direct manufacturing labour hours at an average wage of $14.75 per hour. -July's direct material price variance is:

(Multiple Choice)

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Question 79

Victoria Beverages sells two types of coffee: Colombian and Blue Mountain.The monthly budget for Australian coffee sales is based on a combination of last year's performance,a forecast of industry sales,and the company's expected share of the Australian market.The following information is provided for March: Budgeted and actual fixed corporate-sustaining costs are $60 000 and $72 000,respectively. Required: a.Calculate the actual contribution margin for the month. b.Calculate the contribution margin for the static budget. c.Calculate the contribution margin for the flexible budget. d.Determine the total static-budget variance,the total flexible-budget variance,and the total sales-volume variance in terms of the contribution margin.

(Essay)

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Question 80

When will be the sales-mix variance unfavourable? Variant question

A company that has an ABC system and batch level direct costs cannot benefit from variance analysis.

The budgeted contribution margin per composite unit for the budgeted mix can be calculated by dividing the:

The textbook,in a summary diagram,Figure 11-7,discusses four levels of variances.Briefly explain the meaning of levels 1,2 and 3 and provide an example of a variance at each of those levels. _ _

Very few companies use a combination of financial and non-financial performance measures for planning and control.

An unfavourable sales-mix variance would MOST likely be caused by:

When will be the sales-mix variance favourable? Variant question

The sales-volume variance is the difference between a flexible-budget amount and the corresponding static-budget amount (our initial prediction before actual results were known).

What type of performance measures for planning and control do almost all companies use in addition to financial measures? Variant question

Answer the following questions using the information below: Tiger O'Reilly planned to use $85 of material per unit but actually used $82 of material per unit,and planned to make 1200 units but actually made 1000 units. -The sales-volume variance is:

The variances that should be investigated by management include:

The only difference between the static budget and flexible budget is that the static budget is prepared using planned output.

The sales-volume variance is due to:

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

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