Question 1

Which variance is calculated by using the formula: (AP - BP)AQ is the ________.

Accepted Answer

A) efficiency variance 
B) price variance 
C) total flexible-budget variance 
D) material spending variance 
A) efficiency variance 
B) price variance 
C) total flexible-budget variance 
D) material spending variance

Question 2

Which of the following information is needed to prepare a flexible budget?

Accepted Answer

A) actual units sold 
B) actual variable cost 
C) actual selling price per unit 
D) actual fixed cost 
A) actual units sold 
B) actual variable cost 
C) actual selling price per unit 
D) actual fixed cost

Question 3

Cost variances should be investigated ________.

Accepted Answer

A) when they are considered within the "in-control" range as determined by management 
B) when the variance is more than a certain percentage of budgeted costs,as determined by management 
C) even though the cost of investigation exceeds the benefit as determined by management 
D) when the variance is less than a certain percentage of budgeted costs,as determined by management 
A) when they are considered within the "in-control" range as determined by management 
B) when the variance is more than a certain percentage of budgeted costs,as determined by management 
C) even though the cost of investigation exceeds the benefit as determined by management 
D) when the variance is less than a certain percentage of budgeted costs,as determined by management

Question 4

The goal of variance analysis is for managers to understand why variances arise,to learn,and to improve future performance.

Accepted Answer

A) True 
 B)False

Question 5

Waddell Productions makes separate journal entries for all cost accounting-related activities.It uses a standard cost system for all manufacturing items.For the month of June,the following activities have taken place:
   
Required:
Record the necessary journal entries to close the accounts for the month.

Accepted Answer

@#IMG-DLM&_TB5540_00_TB5540_00

Question 6

Coast to Coast Bus Lines acquired the following data about the operating cost of three of its top competitors.
Operating cost per seat per mile
Competitor A $.11
Competitor B $.15
Competitor C $.16
Management decides to use the average operating cost per seat per mile as a mark.Coast to Coast per seat is 12.5 cents per mile.

Accepted Answer

A) It is equal to the mark 
B) It compares favorably 
C) It compares unfavorably 
D) It compares favorably to the best performing competitor 
A) It is equal to the mark 
B) It compares favorably 
C) It compares unfavorably 
D) It compares favorably to the best performing competitor

Question 7

Studies show that variance analysis is no longer a popular tool of corporate managers as they have adopted various other forms of performance evaluation.

Accepted Answer

A) True 
 B)False

Question 8

An efficiency variance reflects the difference between ________.

Accepted Answer

A) actual input quantities used last period and current period 
B) an actual input quantity and a budgeted input quantity 
C) an actual input quantity used in a company and its main competitors 
D) a standard input quantity in a company and its main competitors 
A) actual input quantities used last period and current period 
B) an actual input quantity and a budgeted input quantity 
C) an actual input quantity used in a company and its main competitors 
D) a standard input quantity in a company and its main competitors

Question 9

A purchasing manager's performance is best evaluated using information such as

Accepted Answer

A) usage efficiency and direct materials price variance 
B) direct materials flexible-budget variance 
C) direct manufacturing labor flexible-budget variance 
D) price and terms bargaining effectiveness,achievement of quality goals,and direct materials price variance 
A) usage efficiency and direct materials price variance 
B) direct materials flexible-budget variance 
C) direct manufacturing labor flexible-budget variance 
D) price and terms bargaining effectiveness,achievement of quality goals,and direct materials price variance

Question 10

Variances are used for evaluating performance and for motivating managers.

Accepted Answer

A) True 
 B)False

Question 11

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 B was ________.

Accepted Answer

A) $38,600 
B) $37,800 
C) $40,200 
D) $39,400 
A) $38,600 
B) $37,800 
C) $40,200 
D) $39,400

Question 12

The following data for the Panoid Garden Supplies Company pertains to the production of 2,000 garden spades during March.The spade consists of a wooden handle and a metal forged tool that comes in contact with the ground.

Required:
a.What is the standard direct material amount per garden spade?
b.What is the standard cost allowed for all units produced?
c.What is the total direct materials flexible-budget variance?
d.What is the direct material flexible-budget price variance?
e.What is the total actual cost of direct manufacturing labor?
f.What is the labor price variance for direct manufacturing labor?

Accepted Answer

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

Question 13

A flexible budget ________.

Accepted Answer

A) is another name for management by exception 
B) is developed at the end of the period 
C) is based on the budgeted level of output 
D) provides favorable operating results 
A) is another name for management by exception 
B) is developed at the end of the period 
C) is based on the budgeted level of output 
D) provides favorable operating results

Question 14

The sales-volume variance is sometimes due to ________.

Accepted Answer

A) the difference between selling price and budgeted selling price 
B) quality problems leading to customer dissatisfaction 
C) unexpected increase in manufacturing labor time 
D) unexpected increase in the use of quantities of inputs of raw material 
A) the difference between selling price and budgeted selling price 
B) quality problems leading to customer dissatisfaction 
C) unexpected increase in manufacturing labor time 
D) unexpected increase in the use of quantities of inputs of raw material

Question 15

The actual information pertains to the month of June.As part of the budgeting process,Colonial Fencing Company developed the following static budget for September.Colonial is in the process of preparing the flexible budget and understanding the results.

The flexible budget for sales revenues will be?

Accepted Answer

A) $615,000 
B) $510,000 
C) $635,500 
D) $570,000 
A) $615,000 
B) $510,000 
C) $635,500 
D) $570,000

Question 16

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

Accepted Answer

A) static-budget variance and a sales-volume variance 
B) sales-volume variance and an efficiency variance 
C) price variance and an efficiency variance 
D) static-budget variance and a price variance 
A) static-budget variance and a sales-volume variance 
B) sales-volume variance and an efficiency variance 
C) price variance and an efficiency variance 
D) static-budget variance and a price variance

Question 17

Better Products Inc.planned to use $36 of material per unit but actually used $34 of material per unit,and planned to make 1,520 units but actually made 1,310 units.
The flexible-budget variance for materials is ________.

Accepted Answer

A) $3,040 favorable 
B) $3,040 unfavorable 
C) $2,620 unfavorable 
D) $2,620 favorable 
A) $3,040 favorable 
B) $3,040 unfavorable 
C) $2,620 unfavorable 
D) $2,620 favorable

Question 18

The process by which a company's products or services are measured relative to the best possible levels of performance is known as ________.

Accepted Answer

A) efficiency 
B) benchmarking 
C) a standard costing system 
D) variance analysis 
A) efficiency 
B) benchmarking 
C) a standard costing system 
D) variance analysis

Question 19

If management experiences an unfavorable direct materials efficiency variance,which of the following would not be the possible corrective action?

Accepted Answer

A) Improve the design of the product 
B) Provide additional training for the direct laborers 
C) Purchase higher quality materials 
D) Negotiate lower prices for material acquisition 
A) Improve the design of the product 
B) Provide additional training for the direct laborers 
C) Purchase higher quality materials 
D) Negotiate lower prices for material acquisition

Question 20

The president of the company,Peter Francis,has come to you for help.Use the following data to prepare a flexible budget for possible sales/production levels of 10,000,15,000,and 20,000 units.Show the contribution margin at each activity level.

Accepted Answer

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

Which variance is calculated by using the formula: (AP - BP)AQ is the ________.

Which of the following information is needed to prepare a flexible budget?

Cost variances should be investigated ________.

The goal of variance analysis is for managers to understand why variances arise,to learn,and to improve future performance.

Studies show that variance analysis is no longer a popular tool of corporate managers as they have adopted various other forms of performance evaluation.

An efficiency variance reflects the difference between ________.

A purchasing manager's performance is best evaluated using information such as

Variances are used for evaluating performance and for motivating managers.

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 B was ________.

A flexible budget ________.

The sales-volume variance is sometimes due to ________.

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

Better Products Inc.planned to use $36 of material per unit but actually used $34 of material per unit,and planned to make 1,520 units but actually made 1,310 units. The flexible-budget variance for materials is ________.

The process by which a company's products or services are measured relative to the best possible levels of performance is known as ________.

If management experiences an unfavorable direct materials efficiency variance,which of the following would not be the possible corrective action?

The president of the company,Peter Francis,has come to you for help.Use the following data to prepare a flexible budget for possible sales/production levels of 10,000,15,000,and 20,000 units.Show the contribution margin at each activity level.

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

Which variance is calculated by using the formula: (AP - BP)AQ is the ________.

Which of the following information is needed to prepare a flexible budget?

Cost variances should be investigated ________.

The goal of variance analysis is for managers to understand why variances arise,to learn,and to improve future performance.

Studies show that variance analysis is no longer a popular tool of corporate managers as they have adopted various other forms of performance evaluation.

An efficiency variance reflects the difference between ________.

A purchasing manager's performance is best evaluated using information such as

Variances are used for evaluating performance and for motivating managers.

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 B was ________.

A flexible budget ________.

The sales-volume variance is sometimes due to ________.

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

Better Products Inc.planned to use $36 of material per unit but actually used $34 of material per unit,and planned to make 1,520 units but actually made 1,310 units. The flexible-budget variance for materials is ________.

The process by which a company's products or services are measured relative to the best possible levels of performance is known as ________.

If management experiences an unfavorable direct materials efficiency variance,which of the following would not be the possible corrective action?

The president of the company,Peter Francis,has come to you for help.Use the following data to prepare a flexible budget for possible sales/production levels of 10,000,15,000,and 20,000 units.Show the contribution margin at each activity level.

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