Question 1

Given the following information in standard costing:   What is the total direct labor cost variance?

Accepted Answer

A) $3,160 favorable. 
B) $3,160 unfavorable. 
C) $2,360 favorable. 
D) $2,360 unfavorable. 
A) $3,160 favorable. 
B) $3,160 unfavorable. 
C) $2,360 favorable. 
D) $2,360 unfavorable.

Question 2

The materials price variance is computed by multiplying the difference between the actual price and the standard price by the actual quantity of materials used in production.The materials price variance is computed by multiplying the difference between the actual and standard price by the actual quantity of materials purchased.

Accepted Answer

A) True 
 B)False

Question 3

The following data pertains to the direct materials cost for the month of October:   What is the direct materials efficiency (quantity)variance?

Accepted Answer

A) $950 favorable. 
B) $950 unfavorable. 
C) $1,000 favorable. 
D) $1,000 unfavorable. 
A) $950 favorable. 
B) $950 unfavorable. 
C) $1,000 favorable. 
D) $1,000 unfavorable.

Question 4

When using a flexible budget,what will happen to variable costs on a per-unit basis as production increases within the relevant range?

Accepted Answer

A) Decrease. 
B) Increase. 
C) Remain unchanged. 
D) Fixed costs are not considered in flexible budgeting. 
A) Decrease. 
B) Increase. 
C) Remain unchanged. 
D) Fixed costs are not considered in flexible budgeting.

Question 5

Variances are the difference between actual results and budgeted results.This is a definition of a variance.

Accepted Answer

A) True 
 B)False

Question 6

Which of these variances is least significant for cost control?

Accepted Answer

A) Labor price variance. 
B) Material quantity variance. 
C) Fixed overhead price variance. 
D) Production volume variance. 
A) Labor price variance. 
B) Material quantity variance. 
C) Fixed overhead price variance. 
D) Production volume variance.

Question 7

What is the actual sales revenue?

Accepted Answer

A) $156,000. 
B) $169,000. 
C) $180,000. 
D) $191,000. 
A) $156,000. 
B) $169,000. 
C) $180,000. 
D) $191,000.

Question 8

Both the actual material used and the standard quantity allowed for material is based on the actual output attained.Standard quantity allowed = standard per unit × actual output.

Accepted Answer

A) True 
 B)False

Question 9

A standard cost system may be used in: (CPA adapted)

Accepted Answer

A) job-order costing but not process costing. 
B) either joB.order costing or process costing. 
C) process costing but not job-order costing. 
D) neither process costing nor job-order costing. 
A) job-order costing but not process costing. 
B) either joB.order costing or process costing. 
C) process costing but not job-order costing. 
D) neither process costing nor job-order costing.

Question 10

In essence,the terms "master budget" and "operating budget" mean the same thing and can be used interchangeably.The operating budget is part of the master budget,along with financial budgets.

Accepted Answer

A) True 
 B)False

Question 11

What is the production volume variance?

Accepted Answer

A) $200. 
B) $400. 
C) $300. 
D) $240. 
A) $200. 
B) $400. 
C) $300. 
D) $240.

Question 12

The sales activity variance is the result of a difference between budgeted units sold and actual units sold.This is the definition of the sales activity variance.

Accepted Answer

A) True 
 B)False

Question 13

What is the flexible budget contribution margin?

Accepted Answer

A) $39,000. 
B) $45,000. 
C) $52,000. 
D) $58,000. 
A) $39,000. 
B) $45,000. 
C) $52,000. 
D) $58,000.

Question 14

Variance analysis for fixed production costs is virtually the same as for variable production costs.There are no efficiency variances for fixed production costs.

Accepted Answer

A) True 
 B)False

Question 15

What is the fixed overhead spending (budget)variance for May?

Accepted Answer

A) $1,000 unfavorable. 
B) $3,000 unfavorable. 
C) $2,000 unfavorable. 
D) $2,000 favorable. 
A) $1,000 unfavorable. 
B) $3,000 unfavorable. 
C) $2,000 unfavorable. 
D) $2,000 favorable.

Question 16

What is the sales revenue in the flexible budget?

Accepted Answer

A) $139,000. 
B) $156,000. 
C) $169,000. 
D) $180,000. 
A) $139,000. 
B) $156,000. 
C) $169,000. 
D) $180,000.

Question 17

In the general model,an efficiency variance is calculated as:

Accepted Answer

A) (SP × AQ)- (SP × SQ) 
B) (AP × SQ)- (SP × SQ) 
C) (AP × AQ)- (SP × SQ) 
D) (AP × AQ)- (SP × AQ) 
A) (SP × AQ)- (SP × SQ) 
B) (AP × SQ)- (SP × SQ) 
C) (AP × AQ)- (SP × SQ) 
D) (AP × AQ)- (SP × AQ)

Question 18

Based on past experience,a company has developed the following budget formula for estimating its shipping expenses.The company's shipments average 12 lbs.per shipment: Shipping costs = $16,000 + ($0.50 × lbs.shipped).The planned activity and actual activity regarding orders and shipments for the current month are given in the following schedule:   The actual shipping costs for the month amounted to $21,000.The appropriate monthly flexible budget allowance for shipping costs for the purpose of performance evaluation would be: (CMA adapted)

Accepted Answer

A) $20,680. 
B) $20,920. 
C) $20,800. 
D) $22,150. 
A) $20,680. 
B) $20,920. 
C) $20,800. 
D) $22,150.

Question 19

The budget (or spending)variance for fixed production costs is the difference between the actual fixed costs and the budgeted fixed costs on the master budget.This is the definition of the budget/spending variance.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements regarding variances is (are)false? (A)In general and holding all other things constant,an unfavorable variance decreases operating profits.(B)A favorable variance is not always good,and an unfavorable variance is not always bad.

Accepted Answer

A) Only A is false. 
B) Only B is false. 
C) Both A and B are false. 
D) Neither A nor B is false. 
A) Only A is false. 
B) Only B is false. 
C) Both A and B are false. 
D) Neither A nor B is false.

Given the following information in standard costing: What is the total direct labor cost variance?

The following data pertains to the direct materials cost for the month of October: What is the direct materials efficiency (quantity)variance?

When using a flexible budget,what will happen to variable costs on a per-unit basis as production increases within the relevant range?

Variances are the difference between actual results and budgeted results.This is a definition of a variance.

Which of these variances is least significant for cost control?

What is the actual sales revenue?

Both the actual material used and the standard quantity allowed for material is based on the actual output attained.Standard quantity allowed = standard per unit × actual output.

A standard cost system may be used in: (CPA adapted)

In essence,the terms "master budget" and "operating budget" mean the same thing and can be used interchangeably.The operating budget is part of the master budget,along with financial budgets.

What is the production volume variance?

The sales activity variance is the result of a difference between budgeted units sold and actual units sold.This is the definition of the sales activity variance.

What is the flexible budget contribution margin?

Variance analysis for fixed production costs is virtually the same as for variable production costs.There are no efficiency variances for fixed production costs.

What is the fixed overhead spending (budget)variance for May?

What is the sales revenue in the flexible budget?

In the general model,an efficiency variance is calculated as:

The budget (or spending)variance for fixed production costs is the difference between the actual fixed costs and the budgeted fixed costs on the master budget.This is the definition of the budget/spending variance.

Which of the following statements regarding variances is (are)false? (A)In general and holding all other things constant,an unfavorable variance decreases operating profits.(B)A favorable variance is not always good,and an unfavorable variance is not always bad.

Cost Accounting: Information for Decision Making

Cost Concepts and Behavior

Fundamentals of Cost-Volume-Profit Analysis

Fundamentals of Cost Analysis for Decision Making

Cost Estimation

Fundamentals of Product and Service Costing

Job Costing

Process Costing

Activity-Based Costing

Fundamentals of Cost Management

Service Department and Joint Cost Allocation

Fundamentals of Management Control Systems

Planning and Budgeting

Business Unit Performance Measurement

Transfer Pricing

Additional Topics in Variance Analysis

Performance Measurement to Support Business Strategy

Filters

Exam 16: Fundamentals of Variance Analysis

Given the following information in standard costing: What is the total direct labor cost variance?

The following data pertains to the direct materials cost for the month of October: What is the direct materials efficiency (quantity)variance?

When using a flexible budget,what will happen to variable costs on a per-unit basis as production increases within the relevant range?

Variances are the difference between actual results and budgeted results.This is a definition of a variance.

Which of these variances is least significant for cost control?

What is the actual sales revenue?

Both the actual material used and the standard quantity allowed for material is based on the actual output attained.Standard quantity allowed = standard per unit × actual output.

A standard cost system may be used in: (CPA adapted)

In essence,the terms "master budget" and "operating budget" mean the same thing and can be used interchangeably.The operating budget is part of the master budget,along with financial budgets.

What is the production volume variance?

The sales activity variance is the result of a difference between budgeted units sold and actual units sold.This is the definition of the sales activity variance.

What is the flexible budget contribution margin?

Variance analysis for fixed production costs is virtually the same as for variable production costs.There are no efficiency variances for fixed production costs.

What is the fixed overhead spending (budget)variance for May?

What is the sales revenue in the flexible budget?

In the general model,an efficiency variance is calculated as:

The budget (or spending)variance for fixed production costs is the difference between the actual fixed costs and the budgeted fixed costs on the master budget.This is the definition of the budget/spending variance.

Which of the following statements regarding variances is (are)false? (A)In general and holding all other things constant,an unfavorable variance decreases operating profits.(B)A favorable variance is not always good,and an unfavorable variance is not always bad.

Cost Accounting: Information for Decision Making

Cost Concepts and Behavior

Fundamentals of Cost-Volume-Profit Analysis

Fundamentals of Cost Analysis for Decision Making

Cost Estimation

Fundamentals of Product and Service Costing

Job Costing

Process Costing

Activity-Based Costing

Fundamentals of Cost Management

Service Department and Joint Cost Allocation

Fundamentals of Management Control Systems

Planning and Budgeting

Business Unit Performance Measurement

Transfer Pricing

Additional Topics in Variance Analysis

Performance Measurement to Support Business Strategy

Filters