Question 1

Which one of the following is the difference in direct material costs between the actual amount incurred and the total standard cost in the flexible budget for the units manufactured during the period?

Accepted Answer

A) Direct materials price variance. 
B) Direct materials mix variance. 
C) Direct materials usage variance. 
D) Direct materials flexible-budget variance. 
E) Direct materials efficiency variance.

Question 2

In September,Larson Inc.sold 40,000 units of its only product for $240,000 and incurred a total cost of $225,000,of which $25,000 is fixed costs.The flexible budget for September showed total sales of $300,000.Among variances of the period were: total variable cost flexible-budget variance,$8,000U;total flexible-budget variance,$63,000U;and,sales volume variance,in terms of contribution margin,$27,000U.The master budget operating income for September was:

Accepted Answer

A) $78,000. 
B) $105,000. 
C) $108,000. 
D) $110,000. 
E) $135,000.

Question 3

The arrival of new manufacturing techniques such as automation,flexible manufacturing systems,and cluster or cell manufacturing has:

Accepted Answer

A) Emphasized the importance of direct labor variances. 
B) Not had an effect on the importance of direct labor variances. 
C) De-emphasized the importance of direct labor variances. 
D) Made direct labor variances obsolete. 
E) Eliminated the need to calculate and report direct materials variances.

Question 4

Minmax Co.'s direct labor information for February is as follows: 
The actual direct labor rate per hour is:

Accepted Answer

A) $13.44. 
B) $13.65. 
C) $13.78. 
D) $14.00. 
E) $14.35.

Question 5

The difference between the flexible-budget operating income and the actual operating income in a period is the:

Accepted Answer

A) Sales-mix variance. 
B) Sales-volume variance. 
C) Sales price variance. 
D) Operating income flexible-budget variance. 
E) Total operating income variance.

Question 6

Precilla Company uses a standard costing system that allows 2 pounds of direct materials for one finished unit.During July,the company purchased 40,000 pounds of direct materials for $210,000 and manufactured 12,000 finished units.The standard direct materials cost allowed for the units manufactured is $120,000.The performance report shows that Pricilla has an unfavorable direct materials usage variance of $5,000.Also,the company records any price variance for materials at time of purchase.
Precilla's standard price per pound of direct materials is:

Accepted Answer

A) $4.00. 
B) $5.00. 
C) $6.00. 
D) $10.00. 
E) $12.00.

Question 7

In September,Larson Inc.sold 40,000 units of its only product for $240,000 and incurred a total cost of $225,000,of which $25,000 is fixed costs.The flexible budget for September showed total sales of $300,000.Among variances of the period were: total variable cost flexible-budget variance,$8,000U;total flexible-budget variance,$63,000U;and,sales volume variance,in terms of contribution margin,$27,000U.The total amount of variable costs in the flexible budget for September was:

Accepted Answer

A) $129,000. 
B) $192,000. 
C) $200,000. 
D) $208,000. 
E) $255,000.

Question 8

A "currently attainable standard" emphasizes:

Accepted Answer

A) Ideal or theoretical performance. 
B) Past performance of the organization. 
C) Future performance of the organization's primary competitors. 
D) Maximum performance. 
E) Relatively efficient operating performance.

Question 9

A standard that assumes perfect implementation and maximum efficiency is called a(n):

Accepted Answer

A) Currently attainable standard. 
B) Practical standard. 
C) Efficiency standard. 
D) Normal standard. 
E) Ideal standard.

Question 10

Sheldon Company manufactures only one product and uses a standard cost system.During the past month,the manufacturing operations had the following variances: Direct labor rate variance $30,000 Favorable.Direct labor efficiency variance 50,000 Unfavorable Sheldon allows 5 standard direct labor hours per unit produced,and its standard direct labor hourly rate is $50.During the month,the company used 25 percent more direct labor hours than the standard allowed.How many units of the product were produced during the past month?

Accepted Answer

A) 800. 
B) 1,000. 
C) 1,200. 
D) 1,500. 
E) 2,000.

Question 11

The total operating-income variance for any period:

Accepted Answer

A) Is unaffected by variances between actual and budgeted sales volume. 
B) Can be decomposed into a total flexible-budget variance and a sales-volume variance. 
C) Can be decomposed into a total flexible-budget variance and a sales price variance. 
D) Is equal to the sum of selling and administrative expense variances plus the total sales-volume variance for the period. 
E) Equals the sum of the total flexible-budget variance plus the sales-mix variance for the period.

Question 12

Minmax Co.'s direct labor information for February is as follows: 
The total standard direct labor cost for the units manufactured in February is:

Accepted Answer

A) $458,640. 
B) $470,400. 
C) $477,750. 
D) $478,240. 
E) $490,000.

Question 13

Roncy Manufacturing uses enhanced powder plastics (EPP)to manufacture high-pressure boards,Dura-Plastic.Information concerning its operation in June was as follows: 
The direct materials usage (efficiency)variance for June was:

Accepted Answer

A) $13,300 unfavorable. 
B) $26,600 unfavorable. 
C) $29,925 unfavorable. 
D) $34,020 unfavorable.

Question 14

Europa Company manufactures only one product.Presented below is direct labor information for November. 
The actual direct labor hours worked during November was:

Accepted Answer

A) 18,720. 
B) 19,200. 
C) 20,800. 
D) 22,400. 
E) 22,464.

Question 15

A company's flexible budget for 15,000 units of production showed sales of $48,000;variable costs of $18,000;and fixed costs of $12,000.The operating income in the master budget for 20,000 units is:

Accepted Answer

A) $8,000. 
B) $13,500. 
C) $24,000. 
D) $28,000. 
E) $30,000.

Question 16

Customer-response time (CRT)is defined as:

Accepted Answer

A) The time between when a customer places an order and the time when the order is received by the customer. 
B) The elapsed time between initial customer contact and the time a customer places an order. 
C) The time between when a customer places an order and when that order is manufactured. 
D) The time between when an order is started into production and when that order is completed.

Question 17

James has the following information pertaining to its usage of direct labor in a recent period:

Accepted Answer

The answer of James has the following information pertaining to...

Question 18

Patterson,Inc.wishes to evaluate,in summary fashion,its financial performance for the most recent period.The budget and the actual operating results for this period are presented below.

Accepted Answer

The answer of Patterson,Inc.wishes to evaluate,in summary fashion,its financial performance...

Question 19

Traditional financial control systems have recently been criticized because:

Accepted Answer

A) They use flexible,not static,budgets. 
B) They generally lead to goal-congruent behavior on the part of managers. 
C) They focus more in improving basic business processes than short-term financial results. 
D) They fail to incorporate nonfinancial performance indicators into the evaluation process. 
E) They use static,not flexible,budgets.

Question 20

In September,Larson Inc.sold 40,000 units of its only product for $240,000 and incurred a total cost of $225,000,of which $25,000 is fixed costs.The flexible budget for September showed total sales of $300,000.Among variances of the period were: total variable cost flexible-budget variance,$8,000U;total flexible-budget variance,$63,000U;and,sales volume variance,in terms of contribution margin,$27,000U.The actual amount of operating income earned in September was:

Accepted Answer

A) $15,000. 
B) $40,000. 
C) $63,000. 
D) $78,000. 
E) $105,000.

Exam 14: Operational Performance Measurement: Sales and Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Which one of the following is the difference in direct material costs between the actual amount incurred and the total standard cost in the flexible budget for the units manufactured during the period?

The arrival of new manufacturing techniques such as automation,flexible manufacturing systems,and cluster or cell manufacturing has:

Minmax Co.'s direct labor information for February is as follows: The actual direct labor rate per hour is:

The difference between the flexible-budget operating income and the actual operating income in a period is the:

A "currently attainable standard" emphasizes:

A standard that assumes perfect implementation and maximum efficiency is called a(n) :

The total operating-income variance for any period:

Minmax Co.'s direct labor information for February is as follows: The total standard direct labor cost for the units manufactured in February is:

Roncy Manufacturing uses enhanced powder plastics (EPP) to manufacture high-pressure boards,Dura-Plastic.Information concerning its operation in June was as follows: The direct materials usage (efficiency) variance for June was:

Europa Company manufactures only one product.Presented below is direct labor information for November. The actual direct labor hours worked during November was:

A company's flexible budget for 15,000 units of production showed sales of $48,000;variable costs of $18,000;and fixed costs of $12,000.The operating income in the master budget for 20,000 units is:

Customer-response time (CRT) is defined as:

James has the following information pertaining to its usage of direct labor in a recent period:

Patterson,Inc.wishes to evaluate,in summary fashion,its financial performance for the most recent period.The budget and the actual operating results for this period are presented below.

Traditional financial control systems have recently been criticized because: