Question 1

Employees view budgeting more positively when goals are established for them by senior management.

Accepted Answer

A) True 
 B)False

Question 2

The standard costs and actual costs for direct materials, direct labor, and factory overhead for the manufacture of 2,500 units of product are as follows: $\text { Standard Costs }$
$\begin{array}{ll}
\text { Direct materials } & 2,500 \text { kilograms } @ \$ 8 \
\text { Direct labor } & 7,500 \text { hours } @ \$ 12
\end{array}$

$\underline{\text {Actual Costs}}$
$\begin{array}{ll}
\text { Direct materials } & 2,600 \text { kilograms } @ \$ 8.75 \
\text { Direct labor } & 7,400 \text { hours } @ \$ 11.40
\end{array}$ Factory overhead (100% capacity - 10,000 hrs.): Variable cost @ $2 per hour
Total variable cost, $18,000
Fixed cost @ $0.80 per hour
Total fixed cost, $8,000
The amount of the fixed factory overhead volume variance is:

Accepted Answer

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

Question 3

Which of the following formula is used to calculate direct labor rate variance?

Accepted Answer

A)  Actual Costs + (Actual hours × Standard Rate) 
B)  Actual costs - Standard cost 
C)  (Actual hours × Standard rate) - Standard costs 
D)  Actual costs - (Actual hours × Standard rate) 
A)  Actual Costs + (Actual hours × Standard Rate) 
B)  Actual costs - Standard cost 
C)  (Actual hours × Standard rate) - Standard costs 
D)  Actual costs - (Actual hours × Standard rate)

Question 4

The difference between the actual amount of variable factory overhead cost incurred and the amount of variable factory overhead budgeted for the standard product is termed as variable factory overhead controllable variance.

Accepted Answer

A) True 
 B)False

Question 5

Benjamin Corporation began its operations on September 1 of the current year.Budgeted sales for the first three months of business are $250,000, $300,000, and $420,000, respectively, for September, October, and November.The company expects to sell 20% of its merchandise for cash.Of sales on account, 70% are expected to be collected in the month of the sale, 25% in the month following the sale, and the remainder in the following month. The cash collections from accounts receivable in November are:

Accepted Answer

A)  $305,200. 
B)  $294,000. 
C)  $235,200. 
D)  $381,500. 
A)  $305,200. 
B)  $294,000. 
C)  $235,200. 
D)  $381,500.

Question 6

Goal conflict can be avoided if budget goals are carefully designed for consistency across all areas of the organization.

Accepted Answer

A) True 
 B)False

Question 7

In preparing flexible budgets, the first step is to identify the fixed and variable components of the various costs and expenses being budgeted.

Accepted Answer

A) True 
 B)False

Question 8

Benjamin Corporation began its operations on September 1 of the current year.Budgeted sales for the first three months of business are $250,000, $300,000, and $420,000, respectively, for September, October, and November.The company expects to sell 20% of its merchandise for cash.Of sales on account, 70% are expected to be collected in the month of the sale, 25% in the month following the sale, and the remainder in the following month. The cash collections from accounts receivable in October are:

Accepted Answer

A)  $270,000. 
B)  $272,500. 
C)  $210,000. 
D)  $218,000. 
A)  $270,000. 
B)  $272,500. 
C)  $210,000. 
D)  $218,000.

Question 9

The sales budget is the starting point for preparation of the direct labor cost budget.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is true of standards?

Accepted Answer

A)  Standards are an integrated set of operating, investing, and financing budgets for a period of time. 
B)  Standards help employees to focus on the larger objectives of an organization by giving less importance to their own operations. 
C)  Standards are easy to maintain in a dynamic manufacturing environment. 
D)  Standards limit operating improvements by discouraging improvement beyond the standard. 
A)  Standards are an integrated set of operating, investing, and financing budgets for a period of time. 
B)  Standards help employees to focus on the larger objectives of an organization by giving less importance to their own operations. 
C)  Standards are easy to maintain in a dynamic manufacturing environment. 
D)  Standards limit operating improvements by discouraging improvement beyond the standard.

Question 11

Based on the following information, calculate the overall process yield.? ? Process M:
Units passing inspection $\quad$7,755 units
Units entering process $\quad$11,750 units
Process N:
Units passing inspection $\quad 5,762$ units
Units entering process $\quad 6,700$ units

Accepted Answer

A)  80.93% 
B)  ?60.82% 
C)  ?66.00% 
D)  ?56.76% 
A)  80.93% 
B)  ?60.82% 
C)  ?66.00% 
D)  ?56.76%

Question 12

The _____ budget shows the expected results of a responsibility center for several activity levels.

Accepted Answer

A)  flexible 
B)  standard 
C)  break-even 
D)  static 
A)  flexible 
B)  standard 
C)  break-even 
D)  static

Question 13

The _____ estimates the number of units to be manufactured to meet budgeted sales and desired inventory levels.

Accepted Answer

A)  capital expenditures budget 
B)  production budget 
C)  sales budget 
D)  cash budget 
A)  capital expenditures budget 
B)  production budget 
C)  sales budget 
D)  cash budget

Question 14

Nyt Garments Co.'s static budget at 10,000 units of production includes $30,000 for direct material and $5,000 for electric power.Total fixed costs are $31,000.At 12,000 units of production, a flexible budget would show:

Accepted Answer

A)  variable costs of $40,000 and $35,000 of fixed costs. 
B)  variable costs of $44,000 and $23,000 of fixed costs. 
C)  variable costs of $42,000 and $31,000 of fixed costs. 
D)  variable costs of $41,000 and $30,000 of fixed costs. 
A)  variable costs of $40,000 and $35,000 of fixed costs. 
B)  variable costs of $44,000 and $23,000 of fixed costs. 
C)  variable costs of $42,000 and $31,000 of fixed costs. 
D)  variable costs of $41,000 and $30,000 of fixed costs.

Question 15

A _____ shows the expected results of a responsibility center for only one activity level.

Accepted Answer

A)  break-even budget 
B)  standard costs system 
C)  static budget 
D)  budgetary slack 
A)  break-even budget 
B)  standard costs system 
C)  static budget 
D)  budgetary slack

Question 16

The _____ is an integrated set of operating, investing, and financing budgets for a period of time.

Accepted Answer

A)  standard budget 
B)  budget performance report 
C)  zero-based budget 
D)  master budget 
A)  standard budget 
B)  budget performance report 
C)  zero-based budget 
D)  master budget

Question 17

An unfavorable volume variance may be due to a failure of supervisors to maintain an even flow of work.

Accepted Answer

A) True 
 B)False

Question 18

In most businesses, cost standards are established principally by accountants.

Accepted Answer

A) True 
 B)False

Question 19

​In computing _____, output is measured as the percentage of units from a process that pass inspection.

Accepted Answer

A)  ​standard units 
B)  ​process yield 
C)  ​process variance 
D)  ​utilization rate 
A)  ​standard units 
B)  ​process yield 
C)  ​process variance 
D)  ​utilization rate

Question 20

If the expected sales volume for the current period is 25,000 units, the desired ending inventory is 700 units, and the beginning inventory is 450 units, the number of units set forth in the production budget, representing total production for the current period, is:

Accepted Answer

A)  25,250 units. 
B)  21,500 units. 
C)  22,300 units. 
D)  22,800 units. 
A)  25,250 units. 
B)  21,500 units. 
C)  22,300 units. 
D)  22,800 units.

Employees view budgeting more positively when goals are established for them by senior management.

Which of the following formula is used to calculate direct labor rate variance?

The difference between the actual amount of variable factory overhead cost incurred and the amount of variable factory overhead budgeted for the standard product is termed as variable factory overhead controllable variance.

Goal conflict can be avoided if budget goals are carefully designed for consistency across all areas of the organization.

In preparing flexible budgets, the first step is to identify the fixed and variable components of the various costs and expenses being budgeted.

The sales budget is the starting point for preparation of the direct labor cost budget.

Which of the following is true of standards?

Based on the following information, calculate the overall process yield.? ? Process M: Units passing inspection $\quad$ 7,755 units Units entering process $\quad$ 11,750 units Process N: Units passing inspection $\quad 5,762$ units Units entering process $\quad 6,700$ units

The _____ budget shows the expected results of a responsibility center for several activity levels.

The _____ estimates the number of units to be manufactured to meet budgeted sales and desired inventory levels.

Nyt Garments Co.'s static budget at 10,000 units of production includes $30,000 for direct material and $5,000 for electric power.Total fixed costs are $31,000.At 12,000 units of production, a flexible budget would show:

A _____ shows the expected results of a responsibility center for only one activity level.

The _____ is an integrated set of operating, investing, and financing budgets for a period of time.

An unfavorable volume variance may be due to a failure of supervisors to maintain an even flow of work.

In most businesses, cost standards are established principally by accountants.

In computing _____, output is measured as the percentage of units from a process that pass inspection.

If the expected sales volume for the current period is 25,000 units, the desired ending inventory is 700 units, and the beginning inventory is 450 units, the number of units set forth in the production budget, representing total production for the current period, is:

The Role of Accounting in Business

Basic Accounting Systems: Cash Basis

Basic Accounting Systems: Accrual Basis

Accounting for Merchandising Businesses

Internal Control and Cash

Receivables and Inventories

Fixed Assets, Natural Resources, and Intangible Assets

Liabilities and Stockholders Equity

Metric Analysis of Financial Statements

Accounting for Manufacturing Operations

Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

Exam 13: Budgeting and Standard Costs

Employees view budgeting more positively when goals are established for them by senior management.

Which of the following formula is used to calculate direct labor rate variance?

The difference between the actual amount of variable factory overhead cost incurred and the amount of variable factory overhead budgeted for the standard product is termed as variable factory overhead controllable variance.

Goal conflict can be avoided if budget goals are carefully designed for consistency across all areas of the organization.

In preparing flexible budgets, the first step is to identify the fixed and variable components of the various costs and expenses being budgeted.

The sales budget is the starting point for preparation of the direct labor cost budget.

Which of the following is true of standards?

Based on the following information, calculate the overall process yield.? ? Process M: Units passing inspection \quad 7,755 units Units entering process \quad 11,750 units Process N: Units passing inspection 5,762\quad 5,7625,762 units Units entering process 6,700\quad 6,7006,700 units

The _____ budget shows the expected results of a responsibility center for several activity levels.

The _____ estimates the number of units to be manufactured to meet budgeted sales and desired inventory levels.

Nyt Garments Co.'s static budget at 10,000 units of production includes $30,000 for direct material and $5,000 for electric power.Total fixed costs are $31,000.At 12,000 units of production, a flexible budget would show:

A _____ shows the expected results of a responsibility center for only one activity level.

The _____ is an integrated set of operating, investing, and financing budgets for a period of time.

An unfavorable volume variance may be due to a failure of supervisors to maintain an even flow of work.

In most businesses, cost standards are established principally by accountants.

​In computing _____, output is measured as the percentage of units from a process that pass inspection.

If the expected sales volume for the current period is 25,000 units, the desired ending inventory is 700 units, and the beginning inventory is 450 units, the number of units set forth in the production budget, representing total production for the current period, is:

The Role of Accounting in Business

Basic Accounting Systems: Cash Basis

Basic Accounting Systems: Accrual Basis

Accounting for Merchandising Businesses

Internal Control and Cash

Receivables and Inventories

Fixed Assets, Natural Resources, and Intangible Assets

Liabilities and Stockholders Equity

Metric Analysis of Financial Statements

Accounting for Manufacturing Operations

Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

Based on the following information, calculate the overall process yield.? ? Process M: Units passing inspection $\quad$ 7,755 units Units entering process $\quad$ 11,750 units Process N: Units passing inspection $\quad 5,762$ units Units entering process $\quad 6,700$ units

In computing _____, output is measured as the percentage of units from a process that pass inspection.