Question 1

The sales-quantity variance will be favorable when which of the following occurs?

Accepted Answer

A) sales-volume variance and flexible-budget variance are favorable 
B) actual units of all products sold exceed budgeted units of all products sold 
C) the actual sales mix shifts towards the more profitable units 
D) static-budget variance and flexible-budget variance are favorable 
A) sales-volume variance and flexible-budget variance are favorable 
B) actual units of all products sold exceed budgeted units of all products sold 
C) the actual sales mix shifts towards the more profitable units 
D) static-budget variance and flexible-budget variance are favorable

Question 2

A company has two distribution channels: wholesale and business sales.Which of the following costs would be allocated as distribution-channel-level costs when analyzing the profitability of customer distribution channels?

Accepted Answer

A) sales order costs 
B) customer visit costs 
C) salary of the wholesale distribution channel manager 
D) corporate adminstration costs 
A) sales order costs 
B) customer visit costs 
C) salary of the wholesale distribution channel manager 
D) corporate adminstration costs

Question 3

Which of the following is a challenge to using cost-benefit criteria for allocating costs?

Accepted Answer

A) the costs of designing and implementing complex cost allocations are not readily apparent 
B) the benefits of making better-informed pricing decisions are difficult to measure 
C) cost systems are being simplified and fewer multiple cost-allocation bases are being used 
D) the costs of collecting and processing information keep spiraling upward 
A) the costs of designing and implementing complex cost allocations are not readily apparent 
B) the benefits of making better-informed pricing decisions are difficult to measure 
C) cost systems are being simplified and fewer multiple cost-allocation bases are being used 
D) the costs of collecting and processing information keep spiraling upward

Question 4

The Corata Appliance Manufacturing Corporation manufactures two vacuum cleaners,the Standard and the Super.The following information was gathered about the two products:
 
What is the total sales-quantity variance in terms of the contribution margin? (Round intermediary calculations to two decimal places. )

Accepted Answer

A) $316,000 favorable 
B) $179,760 favorable 
C) $495,760 favorable 
D) $136,240 favorable 
A) $316,000 favorable 
B) $179,760 favorable 
C) $495,760 favorable 
D) $136,240 favorable

Question 5

Costs of activities related to a group of units sold to a customer is termed as customer batch-level costs.

Accepted Answer

A) True 
 B)False

Question 6

Why would a manager perform customer-profitability analysis?

Accepted Answer

Customer profitability analysis highligh

Question 7

The market-share variance is the difference in actual contribution margin for actual market size in units caused solely by actual market share being different from budgeted market share.

Accepted Answer

A) True 
 B)False

Question 8

The Fortise Corporation manufactures two types of vacuum cleaners,the Victor for commercial building use and the House-Mate for residences.Budgeted and actual operating data for the year 2017 were as follows:

What is the total flexible-budget variance in terms of the contribution margin? (Round intermediary calculations to the nearest dollar. )

Accepted Answer

A) $340,800 favorable 
B) $1,356,800 favorable 
C) $340,800 unfavorable 
D) $4,514,000 unfavorable 
A) $340,800 favorable 
B) $1,356,800 favorable 
C) $340,800 unfavorable 
D) $4,514,000 unfavorable

Question 9

What are the two components of the sales-volume variance?

Accepted Answer

The two components of sales-volume varia

Question 10

Today,companies are simplifying their cost systems and moving toward less-detailed and less-complex cost allocation bases.

Accepted Answer

A) True 
 B)False

Question 11

The sales-volume variance is the difference between ________.

Accepted Answer

A) a sales-mix variance and the corresponding sales-quantity variance 
B) a flexible-budget amount and the corresponding static-budget amount 
C) a market-share variance and the corresponding market-size variance 
D) a sales-mix variance and the corresponding market size variance 
A) a sales-mix variance and the corresponding sales-quantity variance 
B) a flexible-budget amount and the corresponding static-budget amount 
C) a market-share variance and the corresponding market-size variance 
D) a sales-mix variance and the corresponding market size variance

Question 12

How is value-engineering relevant to a well done customer profitability analysis,especially when an ABC system is utilized to calculate customer profits (or losses)?

Accepted Answer

A) ABC will satisfy GAAP and provide input into value-engineering decisions 
B) ABC offers the opportunity to analyze the costs of activities assigned to each customer and to determine if improvements can be made to optimize profits 
C) customer profitability analysis will reveal that the cost drivers of less profitable customers are the problem and that value-engineering is the solution 
D) Only value-added activities will be shown in the cost analysis and thus all other costs will be eliminated via value-engineering 
A) ABC will satisfy GAAP and provide input into value-engineering decisions 
B) ABC offers the opportunity to analyze the costs of activities assigned to each customer and to determine if improvements can be made to optimize profits 
C) customer profitability analysis will reveal that the cost drivers of less profitable customers are the problem and that value-engineering is the solution 
D) Only value-added activities will be shown in the cost analysis and thus all other costs will be eliminated via value-engineering

Question 13

Price discounts must be uniform among all customers.

Accepted Answer

A) True 
 B)False

Question 14

The sales-quantity variance occurs in a multi-product company from a change in the sales mix.

Accepted Answer

A) True 
 B)False

Question 15

A shift towards a higher proportion of sales of products with a lower contribution margin per unit will most likely result in a(n)________.

Accepted Answer

A) unfavorable sales-mix variance 
B) unfavorable sales-quantity variance 
C) favorable sales-mix variance 
D) favorable sales-quantity variance 
A) unfavorable sales-mix variance 
B) unfavorable sales-quantity variance 
C) favorable sales-mix variance 
D) favorable sales-quantity variance

Question 16

Dartmouth Building Products Inc.provides the following information.
Corporate advertising costs = $850,000
Division A - $5,000,000
Division B - $20,000,000
Number of ads run relevant on Division A products 500
Number of ads run relevant to Division B products 3667
Assume that customers with higher revenues benefited more from corporate advertising costs than customers with lower revenues.What is the allocated corporate costs for Division A?

Accepted Answer

A) $748,000 
B) $212,500 
C) $170,000 
D) $850,000 
A) $748,000 
B) $212,500 
C) $170,000 
D) $850,000

Question 17

Sales-mix variance = $300,000 (F),sales-volume variance = $470,000 (U),flexible-budget variance = $230,000 (F),market-size variance = $34,000 (U),calculate the sales-quantity variance.

Accepted Answer

A) $770,000 (U) 
B) $804,000 (U) 
C) $136,000 (U) 
D) $170,000 (U) 
A) $770,000 (U) 
B) $804,000 (U) 
C) $136,000 (U) 
D) $170,000 (U)

Question 18

When the purpose of cost allocation is to provide information for economic decisions or to motivate managers and employees,which of the following would be the best criteria?

Accepted Answer

A) the cause-and-effect and the ability-to bear criteria 
B) the cause-and-effect and the benefits-received criteria 
C) the benefits-received and the fairness criteria 
D) the fairness and the ability-to-bear criteria 
A) the cause-and-effect and the ability-to bear criteria 
B) the cause-and-effect and the benefits-received criteria 
C) the benefits-received and the fairness criteria 
D) the fairness and the ability-to-bear criteria

Question 19

Managers can gain more insight about the static-budget variance by subdividing it into the flexible-budget variance and the sales-volume variance.

Accepted Answer

A) True 
 B)False

Question 20

The Octova Corporation manufactures two types of vacuum cleaners: the ZENITH for commercial building use and the House-Helper for residences.Budgeted and actual operating data for the year 2017 are as follows:

Required:
a.Calculate the contribution margin for the flexible budget.
b.Determine the total static-budget variance,the total flexible-budget variance,and the total sales-volume variance in terms of the contribution margin.

Accepted Answer

Budgeted contribution margin p

The sales-quantity variance will be favorable when which of the following occurs?

A company has two distribution channels: wholesale and business sales.Which of the following costs would be allocated as distribution-channel-level costs when analyzing the profitability of customer distribution channels?

Which of the following is a challenge to using cost-benefit criteria for allocating costs?

Costs of activities related to a group of units sold to a customer is termed as customer batch-level costs.

Why would a manager perform customer-profitability analysis?

The market-share variance is the difference in actual contribution margin for actual market size in units caused solely by actual market share being different from budgeted market share.

What are the two components of the sales-volume variance?

Today,companies are simplifying their cost systems and moving toward less-detailed and less-complex cost allocation bases.

The sales-volume variance is the difference between ________.

How is value-engineering relevant to a well done customer profitability analysis,especially when an ABC system is utilized to calculate customer profits (or losses)?

Price discounts must be uniform among all customers.

The sales-quantity variance occurs in a multi-product company from a change in the sales mix.

A shift towards a higher proportion of sales of products with a lower contribution margin per unit will most likely result in a(n)________.

Sales-mix variance = $300,000 (F),sales-volume variance = $470,000 (U),flexible-budget variance = $230,000 (F),market-size variance = $34,000 (U),calculate the sales-quantity variance.

When the purpose of cost allocation is to provide information for economic decisions or to motivate managers and employees,which of the following would be the best criteria?

Managers can gain more insight about the static-budget variance by subdividing it into the flexible-budget variance and the sales-volume variance.

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,direct-Cost Variances,and Management Control

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

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

The sales-quantity variance will be favorable when which of the following occurs?

A company has two distribution channels: wholesale and business sales.Which of the following costs would be allocated as distribution-channel-level costs when analyzing the profitability of customer distribution channels?

Which of the following is a challenge to using cost-benefit criteria for allocating costs?

Costs of activities related to a group of units sold to a customer is termed as customer batch-level costs.

Why would a manager perform customer-profitability analysis?

The market-share variance is the difference in actual contribution margin for actual market size in units caused solely by actual market share being different from budgeted market share.

What are the two components of the sales-volume variance?

Today,companies are simplifying their cost systems and moving toward less-detailed and less-complex cost allocation bases.

The sales-volume variance is the difference between ________.

How is value-engineering relevant to a well done customer profitability analysis,especially when an ABC system is utilized to calculate customer profits (or losses)?

Price discounts must be uniform among all customers.

The sales-quantity variance occurs in a multi-product company from a change in the sales mix.

A shift towards a higher proportion of sales of products with a lower contribution margin per unit will most likely result in a(n)________.

Sales-mix variance = $300,000 (F),sales-volume variance = $470,000 (U),flexible-budget variance = $230,000 (F),market-size variance = $34,000 (U),calculate the sales-quantity variance.

When the purpose of cost allocation is to provide information for economic decisions or to motivate managers and employees,which of the following would be the best criteria?

Managers can gain more insight about the static-budget variance by subdividing it into the flexible-budget variance and the sales-volume variance.

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,direct-Cost Variances,and Management Control

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

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