Question 1

Differentiate between a static-budget variance and a flexible-budget variance.

Accepted Answer

A master-budget variance is the differen

Question 2

If the ending inventory of material is greater than beginning inventory, then the direct?material price variance is based on the _____.

Accepted Answer

A) standard quantity allowed for actual production 
B) quantity used 
C) quantity purchased 
D) goods actually produced 
A) standard quantity allowed for actual production 
B) quantity used 
C) quantity purchased 
D) goods actually produced

Question 3

Which of the following is a true statement?

Accepted Answer

A) The standard set for flexible budgets should always be attainable. 
B) The standard set for flexible budgets should always be set higher than expected. 
C) There is no one right statement here because the experts disagree. 
D) The standard set for flexible budgets should always be a standard that can easily be achieved because employees ignore unreasonable goals. 
A) The standard set for flexible budgets should always be attainable. 
B) The standard set for flexible budgets should always be set higher than expected. 
C) There is no one right statement here because the experts disagree. 
D) The standard set for flexible budgets should always be a standard that can easily be achieved because employees ignore unreasonable goals.

Question 4

An example of a favorable variance is _____.

Accepted Answer

A) actual revenues are less than expected 
B) actual expenses are less than expected 
C) material prices are greater than expected 
D) expected labor costs are less than actual costs 
A) actual revenues are less than expected 
B) actual expenses are less than expected 
C) material prices are greater than expected 
D) expected labor costs are less than actual costs

Question 5

An expected cost is the cost that is least likely to be attained.

Accepted Answer

A) True 
 B)False

Question 6

One of the first questions a manager should consider when explaining a large variance is whether expectations were valid.

Accepted Answer

A) True 
 B)False

Question 7

The following data for the Hermit Company pertain to the produc?tion of 2,000 clay pigeons during July: Standard variable-overhead cost: $6.00 per pound of clay.
Total actual variable-overhead cost: $11,000.
Standard variable-overhead cost allowed for units produced was $12,000.
Variable-overhead efficiency variance was $240 unfavorable.
_____ is the variable-overhead flexible-budget variance.

Accepted Answer

A) $1,000 favorable 
B) $240 unfavorable 
C) $1,280 favorable 
D) $1,000 unfavorable 
A) $1,000 favorable 
B) $240 unfavorable 
C) $1,280 favorable 
D) $1,000 unfavorable

Question 8

Identify which of the following is not an example of "efficient" performance.

Accepted Answer

A) More goods were produced and sold than anticipated. 
B) Direct labor hours per unit were less than expected. 
C) Direct material used per unit was less than expected. 
D) More outputs were achieved with less inputs than predicted. 
A) More goods were produced and sold than anticipated. 
B) Direct labor hours per unit were less than expected. 
C) Direct material used per unit was less than expected. 
D) More outputs were achieved with less inputs than predicted.

Question 9

The total flexible?budget variance can be broken down into a price variance and an effectiveness variance.

Accepted Answer

A) True 
 B)False

Question 10

Ben 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 static budget-variance for set-ups.

Accepted Answer

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

Question 11

Eagle Company had a favorable flexible?budget direct?material variance.In this case, it would not be possible for the direct?material price and quantity variances, respectively, to be _____.

Accepted Answer

A) favorable and unfavorable 
B) unfavorable and favorable 
C) unfavorable and unfavorable 
D) favorable and favorable 
A) favorable and unfavorable 
B) unfavorable and favorable 
C) unfavorable and unfavorable 
D) favorable and favorable

Question 12

Levels of performance that can be achieved by realistic levels of effort

Accepted Answer

Currently

Question 13

The static budget variance is the variance of actual results from the static budget.

Accepted Answer

A) True 
 B)False

Question 14

Identify which of the statements below is not a reason why actual results would differ from those projected in the master budget.

Accepted Answer

A) Current period projected sales volume differed from the prior period projection. 
B) Actual sales volume differed from projected sales volume. 
C) Variable costs per unit differed from expected amounts. 
D) Actual fixed costs were different than expected. 
A) Current period projected sales volume differed from the prior period projection. 
B) Actual sales volume differed from projected sales volume. 
C) Variable costs per unit differed from expected amounts. 
D) Actual fixed costs were different than expected.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Efficiency is the degree to which a goal, objective, or target is met.

Accepted Answer

A) True 
 B)False

Question 17

The difference between the actual variable overhead and the variable overhead budgeted for the actual level of the cost-driver activity

Accepted Answer

Variable-o

Question 18

The following information is for Euclid Corporation: $\begin{array}{lrl}
&\text { Direct }\
&\text { Material }\
\text { Standard price per unit of input } & \$ 25 & \
\text { Actual price per unit of input } & \$ 24 & \
\text { Standard inputs allowed per unit of output } & 3 & \text { pounds } \
\text { Actual units of input } & 8,300 & \text { pounds } \
\text { Actual units of output } & 2,770& \text { units }
\end{array}$ * Direct material is measured in pounds _____ is the direct-material usage variance.

Accepted Answer

A) $250 unfavorable 
B) $250 favorable 
C) $8,300 unfavorable 
D) $8,300 favorable 
A) $250 unfavorable 
B) $250 favorable 
C) $8,300 unfavorable 
D) $8,300 favorable

Question 19

The difference between the actual results and the master budget

Accepted Answer

Static-bud

Question 20

If the actual level of sales significantly exceeds the sales in the static budget, the variances associated with the variable costs will probably be _____.

Accepted Answer

A) favorable 
B) unfavorable 
C) zero 
D) undeterminable 
A) favorable 
B) unfavorable 
C) zero 
D) undeterminable

Differentiate between a static-budget variance and a flexible-budget variance.

If the ending inventory of material is greater than beginning inventory, then the direct?material price variance is based on the _____.

Which of the following is a true statement?

An example of a favorable variance is _____.

An expected cost is the cost that is least likely to be attained.

One of the first questions a manager should consider when explaining a large variance is whether expectations were valid.

Identify which of the following is not an example of "efficient" performance.

The total flexible?budget variance can be broken down into a price variance and an effectiveness variance.

Ben 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 static budget-variance for set-ups.

Eagle Company had a favorable flexible?budget direct?material variance.In this case, it would not be possible for the direct?material price and quantity variances, respectively, to be _____.

Levels of performance that can be achieved by realistic levels of effort

The static budget variance is the variance of actual results from the static budget.

Identify which of the statements below is not a reason why actual results would differ from those projected in the master budget.

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

Efficiency is the degree to which a goal, objective, or target is met.

The difference between the actual variable overhead and the variable overhead budgeted for the actual level of the cost-driver activity

The difference between the actual results and the master budget

If the actual level of sales significantly exceeds the sales in the static budget, the variances associated with the variable costs will probably be _____.

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

Differentiate between a static-budget variance and a flexible-budget variance.

If the ending inventory of material is greater than beginning inventory, then the direct?material price variance is based on the _____.

Which of the following is a true statement?

An example of a favorable variance is _____.

An expected cost is the cost that is least likely to be attained.

One of the first questions a manager should consider when explaining a large variance is whether expectations were valid.

Identify which of the following is not an example of "efficient" performance.

The total flexible?budget variance can be broken down into a price variance and an effectiveness variance.

Ben 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 static budget-variance for set-ups.

Eagle Company had a favorable flexible?budget direct?material variance.In this case, it would not be possible for the direct?material price and quantity variances, respectively, to be _____.

Levels of performance that can be achieved by realistic levels of effort

The static budget variance is the variance of actual results from the static budget.

Identify which of the statements below is not a reason why actual results would differ from those projected in the master budget.

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

Efficiency is the degree to which a goal, objective, or target is met.

The difference between the actual variable overhead and the variable overhead budgeted for the actual level of the cost-driver activity

The difference between the actual results and the master budget

If the actual level of sales significantly exceeds the sales in the static budget, the variances associated with the variable costs will probably be _____.

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