Question 1

What is Barber's direct labor price (rate)variance?

Accepted Answer

A)  $17,250
B)  $20,700
C)  $18,750
D)  $21,000 B

Question 2

The variable overhead price variance is due to

Accepted Answer

A)  price items only.
B)  efficiency items only.
C)  both price and efficiency items.
D)  neither price or efficiency items. C

Question 3

The production volume variance is computed by the difference between the

Accepted Answer

A)  actual fixed overhead and applied fixed overhead.
B)  actual fixed overhead and budget at actual level of activity reached.
C)  actual fixed overhead and budget at denominator level of activity planned.
D)  budget at actual levels of activity reached and fixed overhead applied. D

Question 4

Which of the following statements is (are)true? (A)A favorable variance is not necessarily good,and an unfavorable variance is not necessarily bad.
(B)The master budget includes operating budgets (e.g.,production budget)and financial budgets (e.g.,cash budget).

Accepted Answer

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

Question 5

Production cost variances are input variances,while sales activity variances are output variances.

Accepted Answer

A) True 
 B)False

Question 6

What is the production volume variance?

Accepted Answer

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

Question 7

Which one of the following variances is of least significance from a behavioral control perspective? (CMA adapted)

Accepted Answer

A)  Unfavorable materials quantity variance amounting to 20% of the quantity allowed for the output attained.
B)  Unfavorable labor efficiency variance amounting to 10% more than the budgeted hours for the output attained.
C)  Favorable materials price variance obtained by purchasing raw materials from a new vendor.
D)  Fixed factory overhead volume variance resulting from management's decision midway through the fiscal year to reduce its budgeted output by 20%.

Question 8

The production volume variance must be computed when a company uses

Accepted Answer

A)  activity-based costing.
B)  process costing.
C)  job-order costing.
D)  full-absorption costing.
E)  variable costing.

Question 9

The purpose of the flexible budget is to

Accepted Answer

A)  allow management some latitude in meeting goals.
B)  eliminate cyclical fluctuations in production reports by ignoring variable costs.
C)  compare actual and budgeted results at virtually any level of production.
D)  reduce the total time in preparing the annual budget.

Question 10

Excess direct labor wages resulting from overtime premium will be disclosed in which type of variance? (CPA adapted)

Accepted Answer

A)  Yield.
B)  Quantity.
C)  Labor efficiency.
D)  Labor rate.

Question 11

Information for Nighttime Company's direct labor cost for February is as follows: What were the standard direct labor hours for February?

Accepted Answer

A)  70,000
B)  69,000
C)  72,000
D)  71,400

Question 12

If overhead is applied to production using direct labor hours and the direct labor efficiency variance is favorable,then the variable overhead efficiency variance is

Accepted Answer

A)  favorable.
B)  unfavorable.
C)  either favorable or unfavorable.
D)  neither favorable not unfavorable.

Question 13

Is the direct materials efficiency (quantity)variance favorable or unfavorable?

Accepted Answer

A)  favorable
B)  unfavorable

Question 14

Is the activity variance for the variable manufacturing costs favorable or unfavorable?

Accepted Answer

A)  favorable
B)  unfavorable

Question 15

The flexible and master budget amounts are the same for fixed marketing and administrative costs.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

What is the activity variance for the variable manufacturing costs?

Accepted Answer

A)  $4,000
B)  $14,000
C)  $24,000
D)  $34,000

Question 18

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.

Question 19

In general,the terms favorable and unfavorable are used to describe the effect of a variance on

Accepted Answer

A)  net income.
B)  sales revenue.
C)  production costs.
D)  operating expenses.
E)  balance sheet.

Question 20

What was the actual price paid for the direct material during the month,assuming all materials purchased were put into production?

Accepted Answer

A)  $4.34.
B)  $4.22.
C)  $4.11.
D)  $4.00.
E)  $3.90.

Exam 16: Fundamentals of Variance Analysis

What is Barber's direct labor price (rate) variance?

The variable overhead price variance is due to

The production volume variance is computed by the difference between the

Which of the following statements is (are) true? (A) A favorable variance is not necessarily good,and an unfavorable variance is not necessarily bad. (B) The master budget includes operating budgets (e.g.,production budget) and financial budgets (e.g.,cash budget) .

Production cost variances are input variances,while sales activity variances are output variances.

What is the production volume variance?

Which one of the following variances is of least significance from a behavioral control perspective? (CMA adapted)

The production volume variance must be computed when a company uses

The purpose of the flexible budget is to

Excess direct labor wages resulting from overtime premium will be disclosed in which type of variance? (CPA adapted)

Information for Nighttime Company's direct labor cost for February is as follows: What were the standard direct labor hours for February?

If overhead is applied to production using direct labor hours and the direct labor efficiency variance is favorable,then the variable overhead efficiency variance is

Is the direct materials efficiency (quantity) variance favorable or unfavorable?

Is the activity variance for the variable manufacturing costs favorable or unfavorable?

The flexible and master budget amounts are the same for fixed marketing and administrative costs.

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

What is the activity variance for the variable manufacturing costs?

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

In general,the terms favorable and unfavorable are used to describe the effect of a variance on

What was the actual price paid for the direct material during the month,assuming all materials purchased were put into production?