Question 1

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

Accepted Answer

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

Question 2

The difference between actual overhead costs incurred and the budgeted overhead costs based on a flexible budget is the:

Accepted Answer

A) Production variance. 
B) Quantity variance. 
C) Volume variance. 
D) Price variance. 
E) Controllable variance. 
A) Production variance. 
B) Quantity variance. 
C) Volume variance. 
D) Price variance. 
E) Controllable variance.

Question 3

Georgia Inc. ,has collected the following data on one of its products.The actual cost of the direct materials used is:

Accepted Answer

A) $133,750. 
B) $150,000. 
C) $106,250. 
D) $158,750. 
E) $120,000. 
A) $133,750. 
B) $150,000. 
C) $106,250. 
D) $158,750. 
E) $120,000.

Question 4

Which of the following is not part of the flow of events in variance analysis:

Accepted Answer

A) Preparing a standard cost performance report. 
B) Identifying questions and their explanations. 
C) Taking corrective and strategic actions. 
D) Computing and analyzing variances. 
E) Working to ensure that all variances are favorable. 
A) Preparing a standard cost performance report. 
B) Identifying questions and their explanations. 
C) Taking corrective and strategic actions. 
D) Computing and analyzing variances. 
E) Working to ensure that all variances are favorable.

Question 5

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

Accepted Answer

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

Question 6

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

Accepted Answer

A) $2,430 unfavorable. 
B) $3,570 unfavorable. 
C) $2,430 favorable. 
D) $6,000 unfavorable. 
E) $3,570 favorablE.AQ * AP given = $483,570;AQ * SP = 243,000 * $2.00 = $486,000 
A) $2,430 unfavorable. 
B) $3,570 unfavorable. 
C) $2,430 favorable. 
D) $6,000 unfavorable. 
E) $3,570 favorablE.AQ * AP given = $483,570;AQ * SP = 243,000 * $2.00 = $486,000

Question 7

Maxwell Co.collected the following information about its production activities for the current year.
a.Compute the direct materials price and quantity variances and indicate whether each is favorable or unfavorable.
b.Prepare the journal entry to record the issuance of direct materials into production.
Actual costs and quantities:
Direct materials used 95,000 lbs.@ $6.30 per lb.
Units completed during the year,50,000 units
Standard costs and quantities:
Price per lb.of direct material,$6.05
Two lbs.of direct material per unit

Accepted Answer

@#IMG-DLM& @#IMG-DLM& *50,000

Question 8

Whidbey Co.fixed budget for the year is shown below:   Prepare a flexible budget for Whidbey 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 Whidbey Co.fixed budget for the year is...

Question 9

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:

Accepted Answer

A) $1,200 favorable. 
B) $1,200 unfavorable. 
C) $13,200 favorable. 
D) $13,200 unfavorable. 
E) $15,200 favorablE. 
A) $1,200 favorable. 
B) $1,200 unfavorable. 
C) $13,200 favorable. 
D) $13,200 unfavorable. 
E) $15,200 favorablE.

Question 10

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?

Accepted Answer

A) $400 unfavorable. 
B) $450 unfavorable. 
C) $2,500 unfavorable. 
D) $2,550 unfavorable. 
E) $2,950 unfavorablE. 
A) $400 unfavorable. 
B) $450 unfavorable. 
C) $2,500 unfavorable. 
D) $2,550 unfavorable. 
E) $2,950 unfavorablE.

Question 11

A flexible budget may be prepared:

Accepted Answer

A) Before the operating period only. 
B) After the operating period only. 
C) During the operating period only. 
D) At any time in the planning period. 
E) Only when the company encounters excessive costs. 
A) Before the operating period only. 
B) After the operating period only. 
C) During the operating period only. 
D) At any time in the planning period. 
E) Only when the company encounters excessive costs.

Question 12

Ransom,Inc.budgets direct materials cost at $1.10/liter and each product requires 4 liters per unit of finished product.April's activities show usage of 832 liters to complete 196 units at a cost of $798.72.Compute the direct materials price and quantity variances.Indicate if the variance is favorable or unfavorable.

Accepted Answer

@#IMG-DLM& *$798.72/832 liters

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Fixed budgets are also known as flexible budgets.

Accepted Answer

A) True 
 B)False

Question 15

Job #411 was budgeted to require 3.5 hours of labor at $11.00 per hour.However,it was completed in 3 hours by a person who worked for $14.00 per hour.What is the total labor cost variance for Job #4115?

Accepted Answer

The answer of Job #411 was budgeted to require 3.5...

Question 16

Lavoie Company planned to use 18,500 pounds of material costing $2.50 per pound to make 4,000 units of its product.In actually making 4,000 units,the company used 18,800 pounds that cost $2.54 per pound.Calculate the direct materials price variance.

Accepted Answer

The answer of Lavoie Company planned to use 18,500 pounds...

Question 17

A company's flexible budget for 10,000 units of production reflects sales of $200,000;variable costs of $40,000;and fixed costs of $75,000.Calculate the expected level of operating income if the company produces and sells 13,000 units.

Accepted Answer

A) $110,500. 
B) $85,000. 
C) $133,000. 
D) $100,000. 
E) $50,500. 
A) $110,500. 
B) $85,000. 
C) $133,000. 
D) $100,000. 
E) $50,500.

Question 18

A cost variance equals the difference between the quantity variance and the price variance.

Accepted Answer

A) True 
 B)False

Question 19

Levelor Company's flexible budget shows $10,710 of overhead at 75% of capacity,which was the operating level achieved during May.However,the company applied overhead to production during May at a rate of $2.00 per direct labor hour based on a budgeted operating level of 6,120 direct labor hours (90% of capacity).If overhead actually incurred was $11,183 during May,the controllable variance for the month was:

Accepted Answer

A) $473 unfavorable. 
B) $473 favorable. 
C) $1,530 favorable. 
D) $1,530 unfavorable. 
E) $1,057 favorablE. 
A) $473 unfavorable. 
B) $473 favorable. 
C) $1,530 favorable. 
D) $1,530 unfavorable. 
E) $1,057 favorablE.

Question 20

Beluga Corp.has developed standard costs based on a predicted operating level of 352,000 units of production,which is 80% of capacity.Variable overhead is $281,600 at this level of activity,or $0.80 per unit.Fixed overhead is $440,000.The standard costs per unit are:   Beluga actually produced 330,000 units at 75% of capacity and actual costs for the period were:   Calculate the following variances and indicate whether each variance is favorable or unfavorable:
(1)Direct labor efficiency variance: $__________________
(2)Direct materials price variance: $__________________
(3)Controllable overhead variance: $__________________

Accepted Answer

The answer of Beluga Corp.has developed standard costs based on...

Exam 23: Flexible Budgets and Standard Costs

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

The difference between actual overhead costs incurred and the budgeted overhead costs based on a flexible budget is the:

Georgia Inc. ,has collected the following data on one of its products.The actual cost of the direct materials used is:

Which of the following is not part of the flow of events in variance analysis:

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

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

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

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:

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?

A flexible budget may be prepared:

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

Fixed budgets are also known as flexible budgets.

Job #411 was budgeted to require 3.5 hours of labor at $11.00 per hour.However,it was completed in 3 hours by a person who worked for $14.00 per hour.What is the total labor cost variance for Job #4115?

Lavoie Company planned to use 18,500 pounds of material costing $2.50 per pound to make 4,000 units of its product.In actually making 4,000 units,the company used 18,800 pounds that cost $2.54 per pound.Calculate the direct materials price variance.

A company's flexible budget for 10,000 units of production reflects sales of $200,000;variable costs of $40,000;and fixed costs of $75,000.Calculate the expected level of operating income if the company produces and sells 13,000 units.

A cost variance equals the difference between the quantity variance and the price variance.

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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