Question 1

Which of the following statements is false?

Accepted Answer

A) Flexible budgets help provide a basis for management by exception. 
B) Flexible budgets are not based on the same revenue and cost behavior assumptions as the static budget. 
C) Flexible budgets are prepared for a range of activity. 
D) Flexible budgets are automatically matched to changes in activity levels. 
A) Flexible budgets help provide a basis for management by exception. 
B) Flexible budgets are not based on the same revenue and cost behavior assumptions as the static budget. 
C) Flexible budgets are prepared for a range of activity. 
D) Flexible budgets are automatically matched to changes in activity levels.

Question 2

A _____ is most likely to be held accountable for price variances.

Accepted Answer

A) machine operator 
B) production supervisor 
C) purchasing agent 
D) marketing director 
A) machine operator 
B) production supervisor 
C) purchasing agent 
D) marketing director

Question 3

Activity-level variances plus flexible-budget variances equals _____.

Accepted Answer

A) total static-budget variances 
B) total standard variances 
C) total actual variances 
D) none of these answers is correct 
A) total static-budget variances 
B) total standard variances 
C) total actual variances 
D) none of these answers is correct

Question 4

If the flexible?budget variance was $6,000 favorable, and the sales-activity variance was $3,000 favorable, the total master-budget variance was _____.

Accepted Answer

A) $9,000 favorable 
B) $9,000 unfavorable 
C) $3,000 favorable 
D) $3,000 unfavorable 
A) $9,000 favorable 
B) $9,000 unfavorable 
C) $3,000 favorable 
D) $3,000 unfavorable

Question 5

By using a flexible budget, changes in activity level cannot cause any variances between the flexible budget and actual results.

Accepted Answer

A) True 
 B)False

Question 6

A budget based on budgeted costs for each activity and related cost driver

Accepted Answer

Activity-b

Question 7

The difference between actual input prices and expected input prices multiplied by the actual quantity of inputs used

Accepted Answer

The answer of The difference between actual input prices and...

Question 8

The following data for the See Through Company pertain to the produc?tion of 1,000 bottles during June: Standard variable-overhead cost: $26.00 per pound of glass.
Total actual variable-overhead cost: $24,800.
Standard variable-overhead cost allowed for units produced was $26,000.
Variable-overhead efficiency variance was $740 unfavorable.
_____ is the variable-overhead rate variance.

Accepted Answer

A) $1,260 unfavorable 
B) $1,200 favorable 
C) $1,200 unfavorable 
D) $1,940 favorable 
A) $1,260 unfavorable 
B) $1,200 favorable 
C) $1,200 unfavorable 
D) $1,940 favorable

Question 9

A flexible budget is different from a variable budget.

Accepted Answer

A) True 
 B)False

Question 10

Direct-labor quantity variance = actual quantity used - standard quantity allowed) x actual price.

Accepted Answer

A) True 
 B)False

Question 11

The Reindeer Company makes mugs for which the following standards have been developed: $\begin{array}{cc}
&\text { Standard Inputs } & \text { Standard Frice } \
&\text { Expected for Each } & \text { Expected per } \
&\text { Unit of Output } & \text { Unit of Output }\\hline
\text { Direct materials } & 5 \text { ounces } & \$ 2 \text { per ounce } \
\text { Direct labor } & 1.5 \text { hours } & \$ 8 \text { per hour }
\end{array}$ Production of 400 mugs was expected in July, but 440 mugs were actually completed. Direct materials purchased and used were 2,100 ounces at an actual price of $2.30 per ounce.Direct-labor cost for the month was $5,310, and the actual pay per hour was $9.00._____ is the direct-material price variance for July.

Accepted Answer

A) $630 unfavorable 
B) $630 favorable 
C) $400 unfavorable 
D) $400 favorable 
A) $630 unfavorable 
B) $630 favorable 
C) $400 unfavorable 
D) $400 favorable

Question 12

A budget that is often changed at the end of a reporting period is called a _____budget.

Accepted Answer

A) balanced 
B) cost 
C) flexible 
D) trial balance 
A) balanced 
B) cost 
C) flexible 
D) trial balance

Question 13

_____ probably would not be used as a measure of activity in a flexible budget.

Accepted Answer

A) Sales volume 
B) Number of direct labor hours worked 
C) Number of machine hours used 
D) Number of hours worked by salespeople 
A) Sales volume 
B) Number of direct labor hours worked 
C) Number of machine hours used 
D) Number of hours worked by salespeople

Question 14

Actual quantity used - standard quantity allowed) x standard price of material

Accepted Answer

Direct-lab

Question 15

Why should a budgeted cost not be merely an extension of past experience?

Accepted Answer

A budgeted cost should not be merely an

Question 16

A favorable expense variance is when budgeted expenses are less than actual expenses.

Accepted Answer

A) True 
 B)False

Question 17

Hut Company's variable selling and administrative cost is $48,000 when production is 6,000 units._____ are the variable selling and administrative expenses for 7,000 and 8,000 units, respectively.

Accepted Answer

A) $48,000 and $48,000 
B) $56,000 and $64,000 
C) $64,000 and $56,000 
D) None of these answers is correct 
A) $48,000 and $48,000 
B) $56,000 and $64,000 
C) $64,000 and $56,000 
D) None of these answers is correct

Question 18

Green Company planned to produce 12,000 units.Processing required 16,000 machine hours at a cost of $15,000 + $10.50 per machine hour.Actual sales were 14,000 units requiring 20,000 machine hours.Actual processing cost was $222,000._____ is the static-budget variance for processing.

Accepted Answer

A) $39,000 favorable 
B) $39,000 unfavorable 
C) $42,000 favorable 
D) $42,000 unfavorable 
A) $39,000 favorable 
B) $39,000 unfavorable 
C) $42,000 favorable 
D) $42,000 unfavorable

Question 19

Seinfeld Company planned to produce 12,000 units.This level of activities required 20 set-ups at a cost of $18,000 plus $500 per set-up.Actual sales were 10,000 units, requiring 15 set-ups and 12,000 machine hours.Actual set-up cost was $26,000._____ is the flexible-budget variance for set-ups.

Accepted Answer

A) $2,000 favorable 
B) $2,000 unfavorable 
C) $500 favorable 
D) $500 unfavorable 
A) $2,000 favorable 
B) $2,000 unfavorable 
C) $500 favorable 
D) $500 unfavorable

Question 20

John Company's master budget sales were $225,000.Actual sales were $220,000. Sales in the prior year were $219,000.The static-budget variance for sales was _____.

Accepted Answer

A) $5,000 favorable 
B) $5,000 unfavorable 
C) $6,000 favorable 
D) $6,000 unfavorable 
A) $5,000 favorable 
B) $5,000 unfavorable 
C) $6,000 favorable 
D) $6,000 unfavorable

Which of the following statements is false?

A _____ is most likely to be held accountable for price variances.

Activity-level variances plus flexible-budget variances equals _____.

If the flexible?budget variance was $6,000 favorable, and the sales-activity variance was $3,000 favorable, the total master-budget variance was _____.

By using a flexible budget, changes in activity level cannot cause any variances between the flexible budget and actual results.

A budget based on budgeted costs for each activity and related cost driver

The difference between actual input prices and expected input prices multiplied by the actual quantity of inputs used

A flexible budget is different from a variable budget.

Direct-labor quantity variance = actual quantity used - standard quantity allowed) x actual price.

A budget that is often changed at the end of a reporting period is called a _____budget.

_____ probably would not be used as a measure of activity in a flexible budget.

Actual quantity used - standard quantity allowed) x standard price of material

Why should a budgeted cost not be merely an extension of past experience?

A favorable expense variance is when budgeted expenses are less than actual expenses.

Hut Company's variable selling and administrative cost is $48,000 when production is 6,000 units._____ are the variable selling and administrative expenses for 7,000 and 8,000 units, respectively.

Green Company planned to produce 12,000 units.Processing required 16,000 machine hours at a cost of $15,000 + $10.50 per machine hour.Actual sales were 14,000 units requiring 20,000 machine hours.Actual processing cost was $222,000._____ is the static-budget variance for processing.

Seinfeld Company planned to produce 12,000 units.This level of activities required 20 set-ups at a cost of $18,000 plus $500 per set-up.Actual sales were 10,000 units, requiring 15 set-ups and 12,000 machine hours.Actual set-up cost was $26,000._____ is the flexible-budget variance for set-ups.

John Company's master budget sales were $225,000.Actual sales were $220,000. Sales in the prior year were $219,000.The static-budget variance for sales was _____.

Managerial Accounting, the Business Organization, and Professional Ethics

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and an Introduction to Activity-Based Costing

Relevant Information and Decision Making With a Focus on Pricing Decisions

Relevant Information and Decision Making: Operational Decisions

Introduction to Budgets and Preparing the Master Budget

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Costing and Process-Costing Systems

Basic Accounting: Concepts, Techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

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Exam 8: Flexible Budgets and Variance Analysis

Which of the following statements is false?

A _____ is most likely to be held accountable for price variances.

Activity-level variances plus flexible-budget variances equals _____.

If the flexible?budget variance was $6,000 favorable, and the sales-activity variance was $3,000 favorable, the total master-budget variance was _____.

By using a flexible budget, changes in activity level cannot cause any variances between the flexible budget and actual results.

A budget based on budgeted costs for each activity and related cost driver

The difference between actual input prices and expected input prices multiplied by the actual quantity of inputs used

A flexible budget is different from a variable budget.

Direct-labor quantity variance = actual quantity used - standard quantity allowed) x actual price.

A budget that is often changed at the end of a reporting period is called a _____budget.

_____ probably would not be used as a measure of activity in a flexible budget.

Actual quantity used - standard quantity allowed) x standard price of material

Why should a budgeted cost not be merely an extension of past experience?

A favorable expense variance is when budgeted expenses are less than actual expenses.

Hut Company's variable selling and administrative cost is $48,000 when production is 6,000 units._____ are the variable selling and administrative expenses for 7,000 and 8,000 units, respectively.

Green Company planned to produce 12,000 units.Processing required 16,000 machine hours at a cost of $15,000 + $10.50 per machine hour.Actual sales were 14,000 units requiring 20,000 machine hours.Actual processing cost was $222,000._____ is the static-budget variance for processing.

Seinfeld Company planned to produce 12,000 units.This level of activities required 20 set-ups at a cost of $18,000 plus $500 per set-up.Actual sales were 10,000 units, requiring 15 set-ups and 12,000 machine hours.Actual set-up cost was $26,000._____ is the flexible-budget variance for set-ups.

John Company's master budget sales were $225,000.Actual sales were $220,000. Sales in the prior year were $219,000.The static-budget variance for sales was _____.

Managerial Accounting, the Business Organization, and Professional Ethics

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and an Introduction to Activity-Based Costing

Relevant Information and Decision Making With a Focus on Pricing Decisions

Relevant Information and Decision Making: Operational Decisions

Introduction to Budgets and Preparing the Master Budget

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Costing and Process-Costing Systems

Basic Accounting: Concepts, Techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters