Question 1

What are sales variances? How are they used?

Accepted Answer

Sales variances reflect differences in p...

Question 2

Cost variances are ignored under management by exception.

Accepted Answer

A) True 
 B)False

Question 3

Big Bend Co. fixed budget for the year is shown below:
Prepare a flexible budget for Big Bend Co. that shows a detailed budget for its actual sales volume of 42,000 units. Use the contribution margin format.

Accepted Answer

The answer of Big Bend Co. fixed budget for the...

Question 4

The following information describes a company's usage of direct labor in a recent period. The direct labor efficiency variance is:

Accepted Answer

A)   $28,000 unfavorable.
B)   $28,000 favorable.
C)   $45,000 unfavorable.
D)   $45,000 favorable.
E)   $17,000 unfavorable.F) A) and D)
G) A) and B)

Question 5

Companies promoting continuous improvement strive to achieve _____________ standards by eliminating inefficiencies and waste.

Accepted Answer

The answer of Companies promoting continuous improvement strive to achieve...

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Regarding overhead costs, as volume increases:

Accepted Answer

A)   Unit fixed cost increases, unit variable cost decreases.
B)   Unit fixed cost decreases, unit variable cost increases.
C)   Unit variable cost decreases, unit fixed cost remains constant.
D)   Unit fixed cost decreases, unit variable cost remains constant.
E)   Both unit fixed cost and unit variable cost remain constant.F) A) and B)
G) A) and C)

Question 8

Identify the four steps in the budgetary control process.

Accepted Answer

The four steps are: (1) develop the budg...

Question 9

Montaigne Corp. has the following information about its standards and production activity for November. The controllable variance is:

Accepted Answer

A)   $1,295U.
B)   $1,295F.
C)   $2,400U.
D)   $2,400F.
E)   $3,695U.F) B) and C)
G) A) and E)

Question 10

Explain variance analysis. Describe how variance analysis assists managers.

Accepted Answer

Variance analysis compares actual result...

Question 11

A company has established 5 pounds of Material M at $2 per pound as the standard for the material in its Product A. The company has just produced 1,000 units of this product, using 5,200 pounds of Material M that cost $9,880.The direct materials price variance is:

Accepted Answer

A)   $520 unfavorable.
B)   $400 unfavorable.
C)   $120 favorable.
D)   $520 favorable.
E)   $400 favorable.F) C) and D)
G) A) and B)

Question 12

The following company information is available for January. The direct materials price variance is:

Accepted Answer

A)   $5,000 favorable.
B)   $300 favorable.
C)   $5,200 unfavorable.
D)   $5,000 unfavorable.
E)   $5,200 favorable.F) A) and B)
G) A) and C)

Question 13

Whistler Company determined that in the production of their products last period; they had a favorable price variance and an unfavorable quantity variance for direct materials. What might be the cause of this pattern of variances?

Accepted Answer

The company's purchasing manager may hav...

Question 14

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

Accepted Answer

The answer of If actual price per unit of materials...

Question 15

Another name for a static budget is a variable budget.

Accepted Answer

A) True 
 B)False

Question 16

Static budget is another name for:

Accepted Answer

A)   Standard budget.
B)   Flexible budget.
C)   Variable budget.
D)   Fixed budget.
E)   Master budget.F) A) and B)
G) C) and D)

Question 17

The fixed overhead variance can be broken down into the _________________ variance and the _________________ variance.

Accepted Answer

The answer of The fixed overhead variance can be broken...

Question 18

When computing a price variance, the price is held constant.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A)   Rolling budget.
B)   Production budget.
C)   Flexible budget.
D)   Merchandise purchases budget.
E)   Fixed budget.F) A) and E)
G) C) and D)

Question 20

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:

Accepted Answer

A)   $10,000 of fixed costs and $72,000 of variable costs.
B)   $10,000 of fixed costs and $90,000 of variable costs.
C)   $12,500 of fixed costs and $90,000 of variable costs.
D)   $12,500 of fixed costs and $72,000 of variable costs.
E)   $10,000 of fixed costs and $81,000 of variable costs.F) All of the above
G) C) and E)

Exam 24: Flexible Budgets and Standard Costs

The fixed overhead variance can be broken down into the _________________ variance and the _________________ variance.

Correct AnswerverifiedShow Answer

Static budget is another name for:

Correct AnswerverifiedShow Answer

Regarding overhead costs, as volume increases:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When computing a price variance, the price is held constant.

Correct AnswerverifiedShow Answer

Montaigne Corp. has the following information about its standards and production activity for November. The controllable variance is:

Correct AnswerverifiedShow Answer

Cost variances are ignored under management by exception.

Correct AnswerverifiedShow Answer

Identify the four steps in the budgetary control process.

Correct AnswerverifiedThe four steps are: (1) develop the budg...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Explain variance analysis. Describe how variance analysis assists managers.

Correct AnswerverifiedVariance analysis compares actual result...View AnswerShow Answer

A company has established 5 pounds of Material M at $2 per pound as the standard for the material in its Product A. The company has just produced 1,000 units of this product, using 5,200 pounds of Material M that cost $9,880.The direct materials price variance is:

Correct AnswerverifiedShow Answer

The following company information is available for January. The direct materials price variance is:

Correct AnswerverifiedShow Answer

Big Bend Co. fixed budget for the year is shown below: Prepare a flexible budget for Big Bend Co. that shows a detailed budget for its actual sales volume of 42,000 units. Use the contribution margin format.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What are sales variances? How are they used?

Correct AnswerverifiedSales variances reflect differences in p...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

The following information describes a company's usage of direct labor in a recent period. The direct labor efficiency variance is:

Correct AnswerverifiedShow Answer

Whistler Company determined that in the production of their products last period; they had a favorable price variance and an unfavorable quantity variance for direct materials. What might be the cause of this pattern of variances?

Correct AnswerverifiedThe company's purchasing manager may hav...View AnswerShow Answer

Companies promoting continuous improvement strive to achieve _____________ standards by eliminating inefficiencies and waste.

Correct AnswerverifiedShow Answer

Another name for a static budget is a variable budget.

Correct AnswerverifiedShow Answer

The fixed overhead variance can be broken down into the _ variance and the _ variance.

Correct Answer
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The four steps are: (1) develop the budg...
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Variance analysis compares actual result...
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Sales variances reflect differences in p...
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The company's purchasing manager may hav...
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