Question 1

A direct labor cost variance can be divided into price and quantity variances,which are almost always called controllable and volume variances.

Accepted Answer

A) True 
 B)False

Question 2

Joseph,Inc. ,provides the following results of June's operations:   Required:
(a)Determine the total overhead cost variance for June.
(b)Applying the management by exception approach,which of the variances shown are of greatest concern? Why?

Accepted Answer

The answer of Joseph,Inc. ,provides the following results of June's...

Question 3

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.Actual cost = $1,100,250;AH * SR = (81,500 * $12.75)= $1,039,125 
A) $80,250 unfavorable. 
B) $80,250 favorable. 
C) $61,125 favorable. 
D) $61,125 unfavorable. 
E) $19,125 unfavorablE.Actual cost = $1,100,250;AH * SR = (81,500 * $12.75)= $1,039,125

Question 4

A company uses the following standard costs to produce a single unit of output.   During the latest month,the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output.Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked.Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400.Based on this information,the direct labor rate variance for the month was:

Accepted Answer

A) $1,200 favorable 
B) $3,650 favorable 
C) $2,450 favorable 
D) $3,650 unfavorable 
E) $1,200 unfavorable 
A) $1,200 favorable 
B) $3,650 favorable 
C) $2,450 favorable 
D) $3,650 unfavorable 
E) $1,200 unfavorable

Question 5

A _______________________ contains relevant information that compares actual results to planned activities.

Accepted Answer

The answer of A _______________________ contains relevant information that compares...

Question 6

Although a fixed budget is only useful over the relevant range of operations,a flexible budget is useful over all possible production levels.

Accepted Answer

A) True 
 B)False

Question 7

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:

Accepted Answer

A) $2,667. 
B) $14,000. 
C) $18,667. 
D) $24,000. 
E) $35,000. 
A) $2,667. 
B) $14,000. 
C) $18,667. 
D) $24,000. 
E) $35,000.

Question 8

Jefferson Co.uses the following standard to produce a single unit of its product: variable overhead $6 (2 hrs.per unit @ $3/hr. ).Actual data for the month show variable overhead costs of $150,000,and 24,000 units produced.The total variable overhead variance is:

Accepted Answer

A) $6,000F. 
B) $6,000U. 
C) $78,000U. 
D) $78,000F. 
E) $0. 
A) $6,000F. 
B) $6,000U. 
C) $78,000U. 
D) $78,000F. 
E) $0.

Question 9

A variable or flexible budget is so named because it only focuses on variable costs.

Accepted Answer

A) True 
 B)False

Question 10

Ship Co.produces storage crates that require 1.2 meters of material at $.85 per meter and 0.1 direct labor hours at $15.00 per hour.Overhead is assigned at the rate of $9 per direct labor hour.What is the total standard cost for one unit of product that would appear on a standard cost card?

Accepted Answer

A) $25.02. 
B) $11.52. 
C) $2.40. 
D) $2.52. 
E) $3.42. 
A) $25.02. 
B) $11.52. 
C) $2.40. 
D) $2.52. 
E) $3.42.

Question 11

A fixed budget is also called a _____________ budget.

Accepted Answer

The answer of A fixed budget is also called a...

Question 12

Fletcher Company collected the following data regarding production of one of its products.Compute the variable overhead cost variance.

Accepted Answer

A) $18,000 favorable. 
B) $4,000 favorable. 
C) $18,000 unfavorable. 
D) $18,300 favorable. 
E) $14,300 unfavorablE.Actual variable overhead costs = $1,140,000 
A) $18,000 favorable. 
B) $4,000 favorable. 
C) $18,000 unfavorable. 
D) $18,300 favorable. 
E) $14,300 unfavorablE.Actual variable overhead costs = $1,140,000

Question 13

The following information describes production activities of the Midtown Corp.:   30,000 units were completed during the year
Budgeted standards for each unit produced:
1/2 lb.of raw material at $4.15 per lb.
10 minutes of direct labor at $12.50 per hour
Compute the direct materials price and quantity and the direct labor rate and efficiency variances.Indicate whether each variance is favorable or unfavorable.

Accepted Answer

The answer of The following information describes production activities of...

Question 14

The anticipated costs incurred under normal conditions to produce a specific product or to perform a specific service are:

Accepted Answer

A) Variable costs. 
B) Fixed costs. 
C) Standard costs. 
D) Product costs. 
E) Period costs. 
A) Variable costs. 
B) Fixed costs. 
C) Standard costs. 
D) Product costs. 
E) Period costs.

Question 15

Companies promoting continuous improvement strive to achieve practical standards rather than ideal standards.

Accepted Answer

A) True 
 B)False

Question 16

An internal report that helps management analyze the difference between actual performance and budgeted performance based on the actual sales volume (or other level of activity)is called a(n):

Accepted Answer

A) Sales budget performance report. 
B) Flexible budget performance report. 
C) Master budget performance report. 
D) Static budget performance report. 
E) Operating budget performance report. 
A) Sales budget performance report. 
B) Flexible budget performance report. 
C) Master budget performance report. 
D) Static budget performance report. 
E) Operating budget performance report.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

A company uses the following standard costs to produce a single unit of output.   During the latest month,the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output.Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked.Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400.Based on this information,the direct labor efficiency variance for the month was:

Accepted Answer

A) $3,650 favorable 
B) $2,450 favorable 
C) $1,200 unfavorable 
D) $1,200 favorable 
E) $2,450 unfavorable 
A) $3,650 favorable 
B) $2,450 favorable 
C) $1,200 unfavorable 
D) $1,200 favorable 
E) $2,450 unfavorable

Question 19

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

Accepted Answer

The answer of The difference between the flexible budget sales...

Question 20

Sales variance analysis is used by managers for:

Accepted Answer

A) Planning purposes only. 
B) Budgeting purposes only. 
C) Control purposes only. 
D) Planning and control purposes. 
E) Planning and budgeting purposes. 
A) Planning purposes only. 
B) Budgeting purposes only. 
C) Control purposes only. 
D) Planning and control purposes. 
E) Planning and budgeting purposes.

Exam 23: Flexible Budgets and Standard Costs

A direct labor cost variance can be divided into price and quantity variances,which are almost always called controllable and volume variances.

Joseph,Inc. ,provides the following results of June's operations: Required: (a)Determine the total overhead cost variance for June. (b)Applying the management by exception approach,which of the variances shown are of greatest concern? Why?

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

A _______________________ contains relevant information that compares actual results to planned activities.

Although a fixed budget is only useful over the relevant range of operations,a flexible budget is useful over all possible production levels.

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:

Jefferson Co.uses the following standard to produce a single unit of its product: variable overhead $6 (2 hrs.per unit @ $3/hr. ).Actual data for the month show variable overhead costs of $150,000,and 24,000 units produced.The total variable overhead variance is:

A variable or flexible budget is so named because it only focuses on variable costs.

Ship Co.produces storage crates that require 1.2 meters of material at $.85 per meter and 0.1 direct labor hours at $15.00 per hour.Overhead is assigned at the rate of $9 per direct labor hour.What is the total standard cost for one unit of product that would appear on a standard cost card?

A fixed budget is also called a _____________ budget.

Fletcher Company collected the following data regarding production of one of its products.Compute the variable overhead cost variance.

The anticipated costs incurred under normal conditions to produce a specific product or to perform a specific service are:

Companies promoting continuous improvement strive to achieve practical standards rather than ideal standards.

An internal report that helps management analyze the difference between actual performance and budgeted performance based on the actual sales volume (or other level of activity)is called a(n):

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

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

Sales variance analysis is used by managers for:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost-Volume-Profit Analysis

Master Budgets and Planning

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

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