Question 1

The degree to which a predetermined objective or target is met is known as ________.

Accepted Answer

A) efficiency 
B) variance 
C) effectiveness 
D) marking 
A) efficiency 
B) variance 
C) effectiveness 
D) marking

Question 2

The flexible-budget variance is the total of price variance and efficiency variance.

Accepted Answer

A) True 
 B)False

Question 3

The emphasis on variance analysis and its use in performance evaluation must be such that:

Accepted Answer

A) managers focus on setting easy to attain targets 
B) larger unfavorable variances should result in negative consequences for personnel held accountable 
C) management should set targets that challenge but are reasonably achievable and require creativity and resourcefulness by personnel held accountable 
D) Management should stretch resources to meet goals even if continuous improvement and quality suffers 
A) managers focus on setting easy to attain targets 
B) larger unfavorable variances should result in negative consequences for personnel held accountable 
C) management should set targets that challenge but are reasonably achievable and require creativity and resourcefulness by personnel held accountable 
D) Management should stretch resources to meet goals even if continuous improvement and quality suffers

Question 4

Genent Industries,Inc.(GII),developed standard costs for direct material and direct labor.In 2017,GII estimated the following standard costs for one of their major products,the 30-gallon heavy-duty plastic container.
 
During July,GII produced and sold 4,000 containers using 1,000 pounds of direct materials at an average cost per pound of $37 and 475 direct manufacturing labor hours at an average wage of $18.75 per hour.
The direct material efficiency variance during July is ________.

Accepted Answer

A) $5,000 unfavorable 
B) $7,400 favorable 
C) $8,000 unfavorable 
D) $5,000 favorable 
A) $5,000 unfavorable 
B) $7,400 favorable 
C) $8,000 unfavorable 
D) $5,000 favorable

Question 5

Handley Manufacturing Company has prepared the following flexible budget for August and is in the process of interpreting the variances.F denotes a favorable variance and U denotes an unfavorable variance.
 
The most likely explanation of the above direct manufacturing labor variances is that ________.

Accepted Answer

A) the average wage rate paid to employees was less than expected 
B) employees did not work as efficiently as expected to accomplish the job 
C) the company may have assigned more experienced employees this month than originally planned 
D) management may have a problem with budget slack and might be using lax standards for both labor-wage rates and expected efficiency 
A) the average wage rate paid to employees was less than expected 
B) employees did not work as efficiently as expected to accomplish the job 
C) the company may have assigned more experienced employees this month than originally planned 
D) management may have a problem with budget slack and might be using lax standards for both labor-wage rates and expected efficiency

Question 6

Fine Lumber Inc.mills and finishes furniture kits.A certain kit requires the following:
   
During the third quarter,the company made 1,500 kits and used 3,150 square yards of wood costing $42,600.Direct labor totaled 2,100 hours for $46,150.
Required:
a.Compute the direct materials price and efficiency variances for the quarter.
b.Compute the direct manufacturing labor price and efficiency variances for the quarter.

Accepted Answer

a.Direct materials variances:

Question 7

For revenue items,a favorable variance means that actual revenues are less than expected.

Accepted Answer

A) True 
 B)False

Question 8

Heavy Products,Inc.developed standard costs for direct material and direct labor.In 2017,AII estimated the following standard costs for one of their major products,the 10-gallon plastic container.
 
During June,Heavy Products produced and sold 15,000 containers using 25,000 pounds of direct materials at an average cost per pound of $64 and 12,000 direct manufacturing labor-hours at an average wage of $21.56 per hour.
June's direct material flexible-budget variance is ________.

Accepted Answer

A) $60,000 unfavorable 
B) $100,000 favorable 
C) $880,000 unfavorable 
D) $18,720 favorable 
A) $60,000 unfavorable 
B) $100,000 favorable 
C) $880,000 unfavorable 
D) $18,720 favorable

Question 9

The flexible-budget variance for materials is $2,000 (U).The sales-volume variance is $18,000 (U).The price variance for material is $38,000 (F).The efficiency variance for direct manufacturing labor is $12,000 (F).Calculate the efficiency variance for materials.

Accepted Answer

A) $40,000 favorable 
B) $18,000 unfavorable 
C) $6,000 favorable 
D) $40,000 unfavorable 
A) $40,000 favorable 
B) $18,000 unfavorable 
C) $6,000 favorable 
D) $40,000 unfavorable

Question 10

In a flexible budget ________.

Accepted Answer

A) variable costs are calculated proportionately for the budgeted level of sales 
B) fixed costs are calculated proportionately for the actual level of sales 
C) fixed costs are kept at the same level of static budget 
D) variable costs are kept at the same level of static budget 
A) variable costs are calculated proportionately for the budgeted level of sales 
B) fixed costs are calculated proportionately for the actual level of sales 
C) fixed costs are kept at the same level of static budget 
D) variable costs are kept at the same level of static budget

Question 11

The price variance is the difference between the actual price and the budgeted price of the input,multiplied by the actual quantity of input.

Accepted Answer

A) True 
 B)False

Question 12

A standard price is the minimum price a company will have to pay for a unit of input.

Accepted Answer

A) True 
 B)False

Question 13

Standard material cost per kg of raw material is $6.50.Standard material allowed per unit is 5 Kg.Actual material used per unit is 6.00 Kg.Actual cost per kg is $6.00.What is the standard cost per output unit?

Accepted Answer

A) $30.00 
B) $36.00 
C) $32.50 
D) $39.00 
A) $30.00 
B) $36.00 
C) $32.50 
D) $39.00

Question 14

Mid City Products Inc.(MCP),developed standard costs for direct material and direct labor.In 2017,MCP estimated the following standard costs for one of their most popular products.
 
During September,MCP produced and sold 1,000 units using 1,300 pounds of direct materials at an average cost per pound of $5.00 and 480 direct labor hours at an average wage of $13.15 per hour.
September's direct material flexible-budget variance is ________.

Accepted Answer

A) $400 unfavorable 
B) $120 favorable 
C) $1,100 unfavorable 
D) $520 favorable 
A) $400 unfavorable 
B) $120 favorable 
C) $1,100 unfavorable 
D) $520 favorable

Question 15

Mid City Products Inc.(MCP),developed standard costs for direct material and direct labor.In 2017,MCP estimated the following standard costs for one of their most popular products.
 
During September,MCP produced and sold 2,000 units using 8,200 pounds of direct materials at an average cost per pound of $7.00 and 1,160 direct labor hours at an average wage of $17.50 per hour.
The direct labor efficiency variance during September is ________.

Accepted Answer

A) $680 favorable 
B) $700 unfavorable 
C) $600 favorable 
D) $100 unfavorable 
A) $680 favorable 
B) $700 unfavorable 
C) $600 favorable 
D) $100 unfavorable

Question 16

During February the Lungren Manufacturing Company's costing system reported several variances that the production manager was surprised to see.Most of the company's monthly variances are under $125,even though they may be either favorable or unfavorable.The following information is for the manufacture of garden gates,its only product:
   
Required:
a.Provide the manager with some ideas as to what may have caused the price variances.
b.What may have caused the efficiency variances?

Accepted Answer

a.Direct materials' unfavorable price va

Question 17

With disregard to other factors,direct manufacturing labor efficiency variance is likely to be unfavorable if underskilled workers are put on a job.

Accepted Answer

A) True 
 B)False

Question 18

Midend's Camera Shop has prepared the following flexible budget for September and is in the process of interpreting the variances.F denotes a favorable variance and U denotes an unfavorable variance.
 
The actual amount spent for Material A was ________.

Accepted Answer

A) $30,200 
B) $26,200 
C) $27,800 
D) $23,800 
A) $30,200 
B) $26,200 
C) $27,800 
D) $23,800

Question 19

The following data for the Prender Company pertain to the production of 800 urns during August.

Required:
a.What is standard direct material amount per urn?
b.What is the direct material price variance?
c.What is the total actual cost of direct manufacturing labor?
d.What is the labor price variance for direct manufacturing labor?

Accepted Answer

@#IMG-DLM&_TB5540_00_TB5540_00 @#IMG-DLM&_TB5540_0

Question 20

The term for understanding why actual performance deviates from planned performance is.

Accepted Answer

A) variance calculation 
B) organizational learning 
C) favorable variance 
D) continuous improvement 
A) variance calculation 
B) organizational learning 
C) favorable variance 
D) continuous improvement

The degree to which a predetermined objective or target is met is known as ________.

The flexible-budget variance is the total of price variance and efficiency variance.

The emphasis on variance analysis and its use in performance evaluation must be such that:

For revenue items,a favorable variance means that actual revenues are less than expected.

The flexible-budget variance for materials is $2,000 (U).The sales-volume variance is $18,000 (U).The price variance for material is $38,000 (F).The efficiency variance for direct manufacturing labor is $12,000 (F).Calculate the efficiency variance for materials.

In a flexible budget ________.

The price variance is the difference between the actual price and the budgeted price of the input,multiplied by the actual quantity of input.

A standard price is the minimum price a company will have to pay for a unit of input.

Standard material cost per kg of raw material is $6.50.Standard material allowed per unit is 5 Kg.Actual material used per unit is 6.00 Kg.Actual cost per kg is $6.00.What is the standard cost per output unit?

With disregard to other factors,direct manufacturing labor efficiency variance is likely to be unfavorable if underskilled workers are put on a job.

Midend's Camera Shop has prepared the following flexible budget for September and is in the process of interpreting the variances.F denotes a favorable variance and U denotes an unfavorable variance. The actual amount spent for Material A was ________.

The term for understanding why actual performance deviates from planned performance is.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy,balanced Scorecard,and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

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

Filters

Exam 7: Flexible Budgets,direct-Cost Variances,and Management Control

The degree to which a predetermined objective or target is met is known as ________.

The flexible-budget variance is the total of price variance and efficiency variance.

The emphasis on variance analysis and its use in performance evaluation must be such that:

For revenue items,a favorable variance means that actual revenues are less than expected.

The flexible-budget variance for materials is $2,000 (U).The sales-volume variance is $18,000 (U).The price variance for material is $38,000 (F).The efficiency variance for direct manufacturing labor is $12,000 (F).Calculate the efficiency variance for materials.

In a flexible budget ________.

The price variance is the difference between the actual price and the budgeted price of the input,multiplied by the actual quantity of input.

A standard price is the minimum price a company will have to pay for a unit of input.

Standard material cost per kg of raw material is $6.50.Standard material allowed per unit is 5 Kg.Actual material used per unit is 6.00 Kg.Actual cost per kg is $6.00.What is the standard cost per output unit?

With disregard to other factors,direct manufacturing labor efficiency variance is likely to be unfavorable if underskilled workers are put on a job.

Midend's Camera Shop has prepared the following flexible budget for September and is in the process of interpreting the variances.F denotes a favorable variance and U denotes an unfavorable variance. The actual amount spent for Material A was ________.

The term for understanding why actual performance deviates from planned performance is.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy,balanced Scorecard,and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

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

Filters