Exam 13: Budgeting and Standard Costs

The process of developing budget estimates by requiring all levels of management to estimate sales, production, and other operating data as though operations were being initiated for the first time is referred to as:

The fact that workers are unable to meet a properly determined direct labor standard is sufficient cause to change the standard.

Based on the following production and sales estimates for May, determine the number of units expected to be manufactured in May. Estimated inventory (units), May 1 20,000 Desired inventory (units), May 31 15,000 Expected sales volume (units): South region 30,000 West region 40,000 North region 20,000 Unit sales price \ 10

Which of the following budgets summarizes plans for acquiring fixed assets?

The first budget customarily prepared as part of an entity's master budget is the:

Efficient Corporation uses a standard cost system.The following information was provided for the period that just ended: Actual price per gallon \ 11.75 Actual gallons of material used 5,000 Actual hourly labor rate \ 17.00 Actual hours of production 24,300 Standard price per gallon \ 12.00 Standard gallons per completed unit 1/2 Standard hourly labor rate \ 12.00 Standard time per completed unit 3 hrs. Units completed during the period 9,000 ? The direct materials cost variance is:

Changes in technology, machinery, or production methods may make past cost data irrelevant for future operations.

Frogue Corporation uses a standard cost system.The following information was provided for the period that just ended: Actual price per kilogram \ 2.50 Actual kilograms of material used 31,000 Actual hourly labor rate \ 18.10 Actual hours of production 4,900 labor hrs. Standard price per kilogram \ 2.80 Standard kilograms per completed unit 6 kilograms Standard hourly labor rate \ 18.00 Standard time per completed unit 1 hr. Actual total factory overhead \ 34,900 Actual fixed factory overhead \ 18,000 Standard fixed factory overhead rate \ 1.20 per labor hour Standard variable factory overhead rate \ 3.80 per labor hour Maximum plant capacity 15,000 hours Units completed during the period 5,000 ? The total factory overhead cost variance is:

Efficient Corporation uses a standard cost system.The following information was provided for the period that just ended:

Standards that can be achieved only under perfect operating conditions, such as no idle time, no machine breakdowns, and no materials spoilage, are called:

A budget procedure that provides for the maintenance at all times of a twelve-month projection into the future is called continuous budgeting.

​Many service businesses use process yield for assessing performance and the efficient use of assets.

Standard cost per unit is calculated as:

Production estimates for August are as follows: Estimated inventory (units), August 1 12,000 Desired inventory (units), August 31 9,000 Expected sales volume (units), August 75,000 $\text { For each unit produced, the direct materials requirements are as follows: }$ Direct material A (\ 5 per 1.) 3. Direct material B (\ 15 per 1.) 1/2. ? The total direct materials purchases of materials A and B required for August production is:

Production and sales estimates for June are as follows: Estimated inventory (units), June 1 18,500 Desired inventory (units), June 30 19,000 Expected sales volume (units): Area X 3,000 Area Y 4,000 Area Z 5,500 Unit sales price \ 20 ? The number of units expected to be manufactured in June is:

A variant of fiscal-year budgeting whereby a twelve-month projection into the future is maintained at all times is termed:

The standard factory overhead rate of Quaker Inc.is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% capacity of 30,000 direct labor hours.The standard cost and the actual cost of factory overhead for the production of 5,000 units during May were as follows: Standard: 25,000 hours at \ 10 \ 250,000 Actual: Variable factory overhead 202,500 Fixed factory overhead 60,000 ? What is the amount of the variable factory overhead controllable variance?

Assuming that the standard fixed overhead rate is based on full capacity, the cost of available but unused productive capacity is indicated by the:

Using a standard costing system for nonmanufacturing expenses is easily administered because the expenses generally relate to a repetitive, measurable output.

The master budget of a small manufacturer would normally include all component budgets that impact the financial statements.