Question 1

Flexible?budget variances are designed to measure the _____.

Accepted Answer

A) effectiveness of operations at projected level of activity 
B) effectiveness of operations at actual level of activity 
C) efficiency of operations at projected level of activity 
D) efficiency of operations at actual level of activity 
A) effectiveness of operations at projected level of activity 
B) effectiveness of operations at actual level of activity 
C) efficiency of operations at projected level of activity 
D) efficiency of operations at actual level of activity

Question 2

Differences between the static budget and the flexible budget are due to _____.

Accepted Answer

A) problems of cost control 
B) poor usage of material and labor 
C) a combination of price and material variances 
D) actual activity differing from expected activity levels 
A) problems of cost control 
B) poor usage of material and labor 
C) a combination of price and material variances 
D) actual activity differing from expected activity levels

Question 3

Expressions of the most efficient performance possible under the best conceivable conditions

Accepted Answer

Perfection

Question 4

A favorable direct-labor quantity variance may lead to an unfavorable direct-labor price variance.

Accepted Answer

A) True 
 B)False

Question 5

Berea Company produces 2,500 units.Each unit was expected to require 2 labor hours at a cost of $10 per hour.Total labor cost was $55,250 for 4,750 hours worked.Direct labor is measured in hours._____ is the direct-labor quantity variance.

Accepted Answer

A) $2,750 favorable 
B) $2,750 unfavorable 
C) $2,500 favorable 
D) $2,500 unfavorable 
A) $2,750 favorable 
B) $2,750 unfavorable 
C) $2,500 favorable 
D) $2,500 unfavorable

Question 6

If actual expenses are less than expected expenses, the expense variance in the performance report will be unfavorable.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) $207,000 
B) $213,500 
C) $222,000 
D) $225,000 
A) $207,000 
B) $213,500 
C) $222,000 
D) $225,000

Question 8

If the total sales-activity variance and the static-budget variance are equal to each other, there is no flexible-budget variance.

Accepted Answer

A) True 
 B)False

Question 9

The reasons that actual results differ from the master budget are independent of one another.

Accepted Answer

A) True 
 B)False

Question 10

The Foot Company currently produces sandals in an automated process.Expected produc?tion per month is 20,000 units.The required direct materials cost $1.50 per unit.Manufacturing fixed overhead costs are $45,000 per month.Manufacturing overhead is allocated based on units of production._____ is the budgeted manufacturing fixed overhead rate.

Accepted Answer

A) $.50 per unit 
B) $1.50 per unit 
C) $2.25 per unit 
D) None of these answers is correct 
A) $.50 per unit 
B) $1.50 per unit 
C) $2.25 per unit 
D) None of these answers is correct

Question 11

The Paul Company makes tables for which the following standards have been developed: $\begin{array}{cc}
&\text { Standard Inputs } & \text { Standard Frice } \
&\text { Expected for Each } & \text { Expected per } \
&\text { Unit of Output } & \text { Unit of Output }\\hline
\text { Direct materials } & 10 \text { pounds } & \$ 4 \text { per pound } \
\text { Direct labor } & 3 \text { hours } & \$ 16 \text { per hour }
\end{array}$ Production of 200 tables was expected in June, but 220 tables were actually completed. Direct materials purchased and used were 2,100 pounds at an actual price of $4.40 per pound.Direct-labor cost for the month was $10,620, and the actual pay per hour was $18.00._____ is the direct-labor quantity variance for the month of June.

Accepted Answer

A) $1,120 favorable 
B) $1,120 unfavorable 
C) $1,260 favorable 
D) None of these answers is correct 
A) $1,120 favorable 
B) $1,120 unfavorable 
C) $1,260 favorable 
D) None of these answers is correct

Question 12

As the terms are used in the budgeting process, it is possible for a company to be efficient at the same time it is ineffective.

Accepted Answer

A) True 
 B)False

Question 13

Favorable variances do not require investigation.

Accepted Answer

A) True 
 B)False

Flexible?budget variances are designed to measure the _____.

Differences between the static budget and the flexible budget are due to _____.

Expressions of the most efficient performance possible under the best conceivable conditions

A favorable direct-labor quantity variance may lead to an unfavorable direct-labor price variance.

Berea Company produces 2,500 units.Each unit was expected to require 2 labor hours at a cost of $10 per hour.Total labor cost was $55,250 for 4,750 hours worked.Direct labor is measured in hours._____ is the direct-labor quantity variance.

If actual expenses are less than expected expenses, the expense variance in the performance report will be unfavorable.

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

If the total sales-activity variance and the static-budget variance are equal to each other, there is no flexible-budget variance.

The reasons that actual results differ from the master budget are independent of one another.

As the terms are used in the budgeting process, it is possible for a company to be efficient at the same time it is ineffective.

Favorable variances do not require investigation.

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

Flexible?budget variances are designed to measure the _____.

Differences between the static budget and the flexible budget are due to _____.

Expressions of the most efficient performance possible under the best conceivable conditions

A favorable direct-labor quantity variance may lead to an unfavorable direct-labor price variance.

Berea Company produces 2,500 units.Each unit was expected to require 2 labor hours at a cost of $10 per hour.Total labor cost was $55,250 for 4,750 hours worked.Direct labor is measured in hours._____ is the direct-labor quantity variance.

If actual expenses are less than expected expenses, the expense variance in the performance report will be unfavorable.

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

If the total sales-activity variance and the static-budget variance are equal to each other, there is no flexible-budget variance.

The reasons that actual results differ from the master budget are independent of one another.

As the terms are used in the budgeting process, it is possible for a company to be efficient at the same time it is ineffective.

Favorable variances do not require investigation.

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