Exam 24: Flexible Budgets and Standard Costs

A flexible budget is also called a _______________ budget.

Sales variances may be computed in a manner similar to cost variances-that is, computing both price and volume variances.

Although a fixed budget is only useful over the relevant range of operations, a flexible budget is useful over all possible production levels.

Regarding overhead costs, as volume increases:

Bradford Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. What is the direct materials quantity variance?

The following information relating to a company's overhead costs is available. Based on this information, the total overhead variance is: Based on this information, the total overhead variance is:

A flexible budget expresses variable costs on a per unit basis and fixed costs on a total basis.

A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs, $18,000; and fixed costs, $16,000. The operating income expected if the company produces and sells 16,000 units is:

A report based on predicted amounts of revenues and expenses corresponding to the actual level of output is called a:

A company provided the following direct materials cost information. Compute the cost variance.

In producing 700 units of Product CBA last period, Cobalt Company used 5,000 pounds of Material H, costing $34,250. The company has established the standard of using 7.2 pounds of Material H per unit of CBA, at a price of $7.50 per pound. Calculate the materials price and quantity variances associated with producing the 700 units, and indicate whether they are favorable or unfavorable:

Gates Company collected the following data regarding production of one of its products. Compute the variable overhead cost variance, the variable overhead spending variance, the variable overhead efficiency variance, the fixed overhead cost variance, the fixed overhead spending variance, and the fixed overhead volume variance.

What is the overhead volume variance? What would be the cause of a favorable volume variance?

The purchasing department is often responsible for the price paid for materials that may create a direct materials price variance.

Define standard costs. How do they assist management?

Duval, Inc. budgets direct materials at $1/liter and each product requires 4 liters per unit of finished product. April's activities show usage of 832 liters to complete 196 units at a cost of $798.72. Compute the direct materials price and quantity variances. Indicate is the variance is favorable or unfavorable.

What are the four steps in the effective management of variance analysis?

Kyle, Inc. has collected the following data on one of its products. The direct materials price variance is:

Another name for a static budget is a variable budget.

While companies strive to achieve ideal standards, reality implies that some loss of materials usually occurs with any process.