Exam 15: Cost Control

________________ is a technique used to filter cost information contained in performance reports to each manager within the organization at an appropriate level of detail or summarization.

What should the decision rule be to determine what budget variances to investigate?

The difference between standard and actual cost per unit of input is measured by:

The term transfer price refers to:

Which of the following is a true statement pertaining to segment income statements?

The total budget variance is caused by two factors:

If the net of all variances is immaterial relative to the total production costs incurred during the period, the net variance is:

A budget adjusted to reflect a budget allowance based on actual activity achieved rather than the planned level of activity in the original budget is a:

The principal objective of a performance report is to:

Innovation Inc.'s production budget for January is 35,000 units and includes the following component unit costs: direct materials, $16; direct labor, $20; variable overhead, $12. Budgeted fixed overhead is $70,000 (35,000 units × 1/2hour × $4unit). Actual production in January was 36,000 units. Actual unit component costs incurred during January include direct materials, $16.50; direct labor, $18.90; variable overhead, $13.64. Actual fixed overhead was $67,000. The standard fixed overhead application rate per unit consists of $4 per machine hour and each unit is allowed a standard of 1/2 hour of machine time.Calculate the fixed overhead budget variance and the fixed overhead volume variance.

_____________ allows managers to focus their attention on maximizing an amount of earnings above a minimum required ROI.

The total variance for any particular cost component is referred to as the:

The cost formula for the maintenance department of the Raven Co. is $13,000 per month plus $6.50 per machine hour used by the production department.a. Calculate the maintenance cost that would be budgeted for the month of November in which 10,800 machine hours are planned to be used.b. Prepare an appropriate performance report for the maintenance department assuming that 11,130 machine hours were actually used in the month of November, and the total maintenance cost incurred was $86,485.

The standards for one carton of Flavor Rite are: During the week ended May 17, the following activity took place: • 4,800 lbs. of raw material were purchased for inventory at a cost of $5.60 per pound; • 1,200 cartons of finished product were produced; • 4,020 lbs. of raw material were used; • 3,110 labor hours were worked at a total cost of $26,435.Calculate each of the following variances: (a.) Raw materials purchase price variance.(b.) Raw materials usage variance.(c.) Direct labor rate variance.(d.) Direct labor efficiency variance.(e.) Explain the factors that most likely caused the variances computed above.

The standards for one carton of Wonder Wax are: During the week ended December 4, the following activity took place: • 4,600 lbs. of raw material were purchased for inventory at a cost of $2.63 per pound; • 1,050 cartons of finished product were produced; • 4,225 lbs. of raw material were used; • 6,140 labor hours were worked at a total cost of $33,463; • $20,569 actual variable overhead costs were incurred.Calculate each of the following variances: (a.) Price variance for raw materials purchased.(b.) Raw materials usage variance.(c.) Direct labor rate variance.(d.) Direct labor efficiency variance.(e.) Variable overhead spending variance.(f.) Variable overhead efficiency variance.

Niangua Co. is divided into three segments and is interested in preparing a segmented income statement in order to better understand the operating performance of each segment. Fixed expenses in each division currently include an allocation of general corporate expenses equal to 20% of the division's sales.(a.) Complete the following segmented income statement for Niangua Co.

A performance report for direct labor shows a variance between the budget and actual amounts. This difference is a:

An example of a cost that is noncontrollable in the short run is:

A balanced scorecard framework is integrated through four key perspectives. The presentation of these key perspectives on a balanced scorecard from the lowest level perspective to the highest level perspectives is:

Val's travel budget for October was $720, based on her plan to drive 3,000 miles at a cost of $0.24 per mile. During October, she actually drove 2,800 miles at a total cost of $700. A flexed budget performance report would show a variance of: