Question 1

Differences between the static-budget amounts and the flexible budget

Accepted Answer

Activity-l

Question 2

Price variances reflect the organization's efficiency at actual levels of activity.

Accepted Answer

A) True 
 B)False

Question 3

Favorable flexible-budget variances are good.

Accepted Answer

A) True 
 B)False

Question 4

In most companies, variances are investigated only if they exceed a minimum dollar or percentage deviation from budgeted amounts.

Accepted Answer

A) True 
 B)False

Question 5

This variance measures how effective managers have been in meeting the planned sales objective.

Accepted Answer

Sales-acti

Question 6

In a manufacturing area of an organization, poor product design, problems with the quality of materials, and scheduling conflicts will, more than likely, result in a n) _____ materials efficiency variance.

Accepted Answer

A) favorable 
B) unfavorable 
C) favorable. 
D) unfavorable. 
A) favorable 
B) unfavorable 
C) favorable. 
D) unfavorable.

Question 7

Roger 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 activity-level 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 8

Efficiency is indicated by _____.

Accepted Answer

A) sales-activity variances 
B) static-budget variances 
C) flexible-budget variances 
D) all of these answers are correct 
A) sales-activity variances 
B) static-budget variances 
C) flexible-budget variances 
D) all of these answers are correct

Question 9

The difference between the actual cost-driver activity and the amount allowed for the actual output achieved costed at the standard variable-overhead rate

Accepted Answer

Variable-o

Question 10

Using standard costs is popular with companies in the United States.

Accepted Answer

A) True 
 B)False

Question 11

What are some common causes of quantity variances?

Accepted Answer

Some common causes of quantity or effici

Question 12

Job set-up costs for Rob Ublind Company are variable costs based on the number of jobs.Rob Ublind Company expected to work 600 jobs at a total cost of $189,000.Rob Ublind Company worked a total of 630 jobs and actual job set-up costs totaled $177,000.
Required:
Compute the master-budget variance, activity-level variance, and flexible-budget variance for job set-up costs.

Accepted Answer

Activity-level variance: $189,000 - [$18

Question 13

What are two possible interpretations of "currently attainable standards"?

Accepted Answer

The first interpretation is that standar

Question 14

Farm Bureau Insurance Company had a static budgeted operating income of $8.6 million; however, actual income was $6.4 million._____ is the static-budget variance of operating income.

Accepted Answer

A) $6.4 million favorable 
B) $8.6 million unfavorable 
C) $2.2 million favorable 
D) $2.2 million unfavorable 
A) $6.4 million favorable 
B) $8.6 million unfavorable 
C) $2.2 million favorable 
D) $2.2 million unfavorable

Question 15

Purple 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 flexible-budget variance for processing.

Accepted Answer

A) $3,000 favorable 
B) $39,000 unfavorable 
C) $3,000 unfavorable 
D) None of these answers is correct 
A) $3,000 favorable 
B) $39,000 unfavorable 
C) $3,000 unfavorable 
D) None of these answers is correct

Question 16

An activity-based budget is based on budgeted costs for every activity and related cost driver.

Accepted Answer

A) True 
 B)False

Question 17

Materials price variance = actual price - standard price) x standard quantity allowed.

Accepted Answer

A) True 
 B)False

Question 18

The labor flexible-budget variance equals the labor price variance plus the labor quantity variance.

Accepted Answer

A) True 
 B)False

Question 19

A flexible budget adjusts for changes in sales volume and other cost-driver activities.

Accepted Answer

A) True 
 B)False

Question 20

A variance is the difference between _____.

Accepted Answer

A) a budgeted amount and a benchmark amount 
B) the required number of inputs for the number of outputs 
C) an actual result and a budgeted amount 
D) a budgeted amount and a stan?dard amount 
A) a budgeted amount and a benchmark amount 
B) the required number of inputs for the number of outputs 
C) an actual result and a budgeted amount 
D) a budgeted amount and a stan?dard amount

Differences between the static-budget amounts and the flexible budget

Price variances reflect the organization's efficiency at actual levels of activity.

Favorable flexible-budget variances are good.

In most companies, variances are investigated only if they exceed a minimum dollar or percentage deviation from budgeted amounts.

This variance measures how effective managers have been in meeting the planned sales objective.

In a manufacturing area of an organization, poor product design, problems with the quality of materials, and scheduling conflicts will, more than likely, result in a n) _____ materials efficiency variance.

Roger 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 activity-level variance for processing.

Efficiency is indicated by _____.

The difference between the actual cost-driver activity and the amount allowed for the actual output achieved costed at the standard variable-overhead rate

Using standard costs is popular with companies in the United States.

What are some common causes of quantity variances?

What are two possible interpretations of "currently attainable standards"?

Farm Bureau Insurance Company had a static budgeted operating income of $8.6 million; however, actual income was $6.4 million._____ is the static-budget variance of operating income.

Purple 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 flexible-budget variance for processing.

An activity-based budget is based on budgeted costs for every activity and related cost driver.

Materials price variance = actual price - standard price) x standard quantity allowed.

The labor flexible-budget variance equals the labor price variance plus the labor quantity variance.

A flexible budget adjusts for changes in sales volume and other cost-driver activities.

A variance is the difference between _____.

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

Exam 8: Flexible Budgets and Variance Analysis

Differences between the static-budget amounts and the flexible budget

Price variances reflect the organization's efficiency at actual levels of activity.

Favorable flexible-budget variances are good.

In most companies, variances are investigated only if they exceed a minimum dollar or percentage deviation from budgeted amounts.

This variance measures how effective managers have been in meeting the planned sales objective.

In a manufacturing area of an organization, poor product design, problems with the quality of materials, and scheduling conflicts will, more than likely, result in a n) _____ materials efficiency variance.

Roger 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 activity-level variance for processing.

Efficiency is indicated by _____.

The difference between the actual cost-driver activity and the amount allowed for the actual output achieved costed at the standard variable-overhead rate

Using standard costs is popular with companies in the United States.

What are some common causes of quantity variances?

What are two possible interpretations of "currently attainable standards"?

Farm Bureau Insurance Company had a static budgeted operating income of $8.6 million; however, actual income was $6.4 million._____ is the static-budget variance of operating income.

Purple 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 flexible-budget variance for processing.

An activity-based budget is based on budgeted costs for every activity and related cost driver.

Materials price variance = actual price - standard price) x standard quantity allowed.

The labor flexible-budget variance equals the labor price variance plus the labor quantity variance.

A flexible budget adjusts for changes in sales volume and other cost-driver activities.

A variance is the difference between _____.

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