Question 1

A flexible budget is useful both before and after the period's activities are complete.

Accepted Answer

A) True 
 B)False

Question 2

A favorable variance for a cost means that when compared to the budget, the actual cost is ________ than the budgeted cost.

Accepted Answer

The answer of A favorable variance for a cost means...

Question 3

Variable budget is another name for a flexible budget.

Accepted Answer

A) True 
 B)False

Question 4

Fixed budget performance reports compare actual results with the results expected under a fixed budget.

Accepted Answer

A) True 
 B)False

Question 5

Regent, Inc. uses the following standard to produce a single unit of its product: overhead $6 (2 hrs. @ $3/hr.). The flexible budget for overhead is $100,000 plus $1 per direct labor hour. Actual data for the month show overhead costs of $150,000, and 24,000 units produced. The overhead volume variance is:

Accepted Answer

A)  $10,000 favorable. 
B)  $12,000 favorable. 
C)  $4,000 unfavorable. 
D)  $16,000 unfavorable. 
E)  $36,000 unfavorable. 
A)  $10,000 favorable. 
B)  $12,000 favorable. 
C)  $4,000 unfavorable. 
D)  $16,000 unfavorable. 
E)  $36,000 unfavorable.

Question 6

A standard that takes into account the reality that some loss usually occurs with any process under normal application of the process is known as a ________ standard.

Accepted Answer

The answer of A standard that takes into account the...

Question 7

Hassock Corp. produces woven wall hangings. It takes 2 hours of direct labor to produce a single wall hanging. Hassock's standard labor cost is $12 per hour. During August, Hassock produced 10,000 units and used 21,040 hours of direct labor at a total cost of $250,376. What is Hassock's labor efficiency variance for August?

Accepted Answer

A)  $12,480 favorable. 
B)  $10,376 unfavorable. 
C)  $14,584 unfavorable. 
D)  $4,160 favorable. 
E)  $12,480 unfavorable. 
A)  $12,480 favorable. 
B)  $10,376 unfavorable. 
C)  $14,584 unfavorable. 
D)  $4,160 favorable. 
E)  $12,480 unfavorable.

Question 8

Claremont Company sells refurbished copiers. During the month, the company sold 180 copiers for total sales of $540,000. The budget for the month was to sell 175 copiers at an average price of $3,200. The sales price variance for the month was:

Accepted Answer

A)  $20,000 unfavorable. 
B)  $20,000 favorable. 
C)  $36,000 unfavorable. 
D)  $32,000 unfavorable. 
E)  $36,000 favorable. 
A)  $20,000 unfavorable. 
B)  $20,000 favorable. 
C)  $36,000 unfavorable. 
D)  $32,000 unfavorable. 
E)  $36,000 favorable.

Question 9

Fletcher Company collected the following data regarding production of one of its products. Compute the standard quantity allowed for the actual output.

Accepted Answer

A)  243,000 pounds. 
B)  240,000 pounds. 
C)  40,000 pounds. 
D)  480,000 pounds. 
E)  80,000 pounds. 
A)  243,000 pounds. 
B)  240,000 pounds. 
C)  40,000 pounds. 
D)  480,000 pounds. 
E)  80,000 pounds.

Question 10

Standard costs are preset costs for delivering a product or service under normal conditions.

Accepted Answer

A) True 
 B)False

Question 11

The overhead cost variance is:

Accepted Answer

A)  The difference between the overhead costs actually incurred and the overhead budgeted at the actual operating level. 
B)  The difference between the actual overhead incurred during a period and the standard overhead applied. 
C)  The difference between actual and budgeted cost caused by the difference between the actual price per unit and the budgeted price per unit. 
D)  The costs that should be incurred under normal conditions to produce a specific product (or component) or to perform a specific service. 
E)  The difference between the total overhead cost that would have been expected if the actual operating volume had been accurately predicted and the amount of overhead cost that was allocated to products using the standard overhead rate. 
A)  The difference between the overhead costs actually incurred and the overhead budgeted at the actual operating level. 
B)  The difference between the actual overhead incurred during a period and the standard overhead applied. 
C)  The difference between actual and budgeted cost caused by the difference between the actual price per unit and the budgeted price per unit. 
D)  The costs that should be incurred under normal conditions to produce a specific product (or component) or to perform a specific service. 
E)  The difference between the total overhead cost that would have been expected if the actual operating volume had been accurately predicted and the amount of overhead cost that was allocated to products using the standard overhead rate.

Question 12

Fletcher Company collected the following data regarding production of one of its products. Compute the direct labor rate variance.

Accepted Answer

A)  $80,250 unfavorable. 
B)  $80,250 favorable. 
C)  $61,125 favorable. 
D)  $61,125 unfavorable. 
E)  $19,125 unfavorable. 
A)  $80,250 unfavorable. 
B)  $80,250 favorable. 
C)  $61,125 favorable. 
D)  $61,125 unfavorable. 
E)  $19,125 unfavorable.

Question 13

A flexible budget is based on a single predicted amount of sales or other activity measure.

Accepted Answer

A) True 
 B)False

Question 14

The total sales variance can be divided into the sales price variance and the sales volume variance.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not part of the flow of events in variance analysis:

Accepted Answer

A)  Preparing a standard cost performance report. 
B)  Identifying questions and their answers. 
C)  Taking corrective and strategic actions. 
D)  Computing and analyzing variances. 
E)  Working to ensure that all variances are favorable. 
A)  Preparing a standard cost performance report. 
B)  Identifying questions and their answers. 
C)  Taking corrective and strategic actions. 
D)  Computing and analyzing variances. 
E)  Working to ensure that all variances are favorable.

Question 16

If ending variance account balances are immaterial, they can be closed directly to Cost of Goods Sold.

Accepted Answer

A) True 
 B)False

Question 17

Based on a predicted level of production and sales of 22,000 units, a company anticipates total variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based on this information, the budgeted amount of operating income for 20,000 units would be:

Accepted Answer

A)  $30,000. 
B)  $60,000. 
C)  $69,000. 
D)  $150,000. 
E)  $32,727. 
A)  $30,000. 
B)  $60,000. 
C)  $69,000. 
D)  $150,000. 
E)  $32,727.

Question 18

Explain how favorable and unfavorable variances impact income.

Accepted Answer

Favorable variances contribute

Question 19

An ________ standard is based on 100% efficiency without any loss or waste.

Accepted Answer

The answer of An ________ standard is based on 100%...

Question 20

Georgia, Inc. has collected the following data on one of its products. The actual cost of direct materials used is:

Accepted Answer

A)  $133,750. 
B)  $150,000. 
C)  $106,250. 
D)  $158,750. 
E)  $120,000. 
A)  $133,750. 
B)  $150,000. 
C)  $106,250. 
D)  $158,750. 
E)  $120,000.

A flexible budget is useful both before and after the period's activities are complete.

A favorable variance for a cost means that when compared to the budget, the actual cost is ________ than the budgeted cost.

Variable budget is another name for a flexible budget.

Fixed budget performance reports compare actual results with the results expected under a fixed budget.

A standard that takes into account the reality that some loss usually occurs with any process under normal application of the process is known as a ________ standard.

Claremont Company sells refurbished copiers. During the month, the company sold 180 copiers for total sales of $540,000. The budget for the month was to sell 175 copiers at an average price of $3,200. The sales price variance for the month was:

Fletcher Company collected the following data regarding production of one of its products. Compute the standard quantity allowed for the actual output.

Standard costs are preset costs for delivering a product or service under normal conditions.

The overhead cost variance is:

Fletcher Company collected the following data regarding production of one of its products. Compute the direct labor rate variance.

A flexible budget is based on a single predicted amount of sales or other activity measure.

The total sales variance can be divided into the sales price variance and the sales volume variance.

Which of the following is not part of the flow of events in variance analysis:

If ending variance account balances are immaterial, they can be closed directly to Cost of Goods Sold.

Based on a predicted level of production and sales of 22,000 units, a company anticipates total variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based on this information, the budgeted amount of operating income for 20,000 units would be:

Explain how favorable and unfavorable variances impact income.

An ________ standard is based on 100% efficiency without any loss or waste.

Georgia, Inc. has collected the following data on one of its products. The actual cost of direct materials used is:

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Lean Principles and Accounting

Accounting for Business Transactions

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Exam 8: Flexible Budgets and Standard Costs

A flexible budget is useful both before and after the period's activities are complete.

A favorable variance for a cost means that when compared to the budget, the actual cost is ________ than the budgeted cost.

Variable budget is another name for a flexible budget.

Fixed budget performance reports compare actual results with the results expected under a fixed budget.

A standard that takes into account the reality that some loss usually occurs with any process under normal application of the process is known as a ________ standard.

Claremont Company sells refurbished copiers. During the month, the company sold 180 copiers for total sales of $540,000. The budget for the month was to sell 175 copiers at an average price of $3,200. The sales price variance for the month was:

Fletcher Company collected the following data regarding production of one of its products. Compute the standard quantity allowed for the actual output.

Standard costs are preset costs for delivering a product or service under normal conditions.

The overhead cost variance is:

Fletcher Company collected the following data regarding production of one of its products. Compute the direct labor rate variance.

A flexible budget is based on a single predicted amount of sales or other activity measure.

The total sales variance can be divided into the sales price variance and the sales volume variance.

Which of the following is not part of the flow of events in variance analysis:

If ending variance account balances are immaterial, they can be closed directly to Cost of Goods Sold.

Based on a predicted level of production and sales of 22,000 units, a company anticipates total variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based on this information, the budgeted amount of operating income for 20,000 units would be:

Explain how favorable and unfavorable variances impact income.

An ________ standard is based on 100% efficiency without any loss or waste.

Georgia, Inc. has collected the following data on one of its products. The actual cost of direct materials used is:

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Lean Principles and Accounting

Accounting for Business Transactions

Filters