Exam 8: Flexible Budgets and Standard Costs

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 sales for 20,000 units would be:

Summerlin 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 price variance?

If actual price per unit of materials is greater than the standard price per unit of materials, the direct materials price variance is ________.

A flexible budget performance report compares the differences between:

In the analysis of variances, management commonly focuses on four categories of production costs: ________ cost, ________ cost; ________ cost; and ________ cost.

Use the following cost information to calculate the direct labor rate and efficiency variances and indicate whether they are favorable or unfavorable.

When standard manufacturing costs are recorded in the accounts and the cost variances are immaterial at the end of the accounting period, the cost variances should be:

If Mercury Company's actual overhead incurred during a period was $32,700 and the company reported a favorable overhead controllable variance of $1,200 and an unfavorable overhead volume variance of $900, how much standard overhead cost was assigned to the products produced during the period?

Sanchez Company's output for the current period was assigned a $200,000 standard direct materials cost. The direct materials variances included a $5,000 favorable price variance and a $3,000 unfavorable quantity variance. What is the actual total direct materials cost for the current period?

When standard costs are used, factory overhead is assigned to products with a predetermined standard overhead rate.

Based on a predicted level of production and sales of 12,000 units, a company anticipates reporting operating income of $26,000 after deducting variable costs of $72,000 and fixed costs of $10,000. Based on this information, the budgeted amounts of fixed and variable costs for 15,000 units would be:

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:

The process of closing ending variance account balances increases Cost of Goods Sold.

Anniston Co. planned to produce and sell 40,000 units. At that volume level, variable costs are determined to be $320,000 and fixed costs are $30,000. The planned selling price is $10 per unit. Anniston actually produced and sold 42,000 units. Using a contribution margin format: (a) Prepare a fixed budget income statement for the planned level of sales and production. (b) Prepare a flexible budget income statement for the actual level of sales and production.

A company's flexible budget for 48,000 units of production showed variable overhead costs of $72,000 and fixed overhead costs of $64,000. The company incurred overhead costs of $122,800 while operating at a volume of 40,000 units. The total controllable cost variance is:

Based on a predicted level of production and sales of 30,000 units, a company anticipates total contribution margin of $105,000, fixed costs of $40,000, and operating income of $65,000. Based on this information, the budgeted operating income for 28,000 units would be:

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

The difference between the flexible budget sales and the fixed budget sales is called the ________ variance.

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

Within the same flexible budget performance report, it is impossible to have both favorable and unfavorable variances.