Question 1

Sales variances allow managers to focus on sales mix as well as sales quantities.

Accepted Answer

A) True 
 B)False

Question 2

When standard manufacturing costs are recorded in the accounts and the cost variances are immaterial at the end of the accounting period,the cost variances should be:

Accepted Answer

A) Carried forward to the next accounting period. 
B) Allocated between cost of goods sold, finished goods, and goods in process. 
C) Closed to cost of goods sold. 
D) Written off as a selling expense. 
E) Ignored. 
A) Carried forward to the next accounting period. 
B) Allocated between cost of goods sold, finished goods, and goods in process. 
C) Closed to cost of goods sold. 
D) Written off as a selling expense. 
E) Ignored.

Question 3

Companies promoting continuous improvement strive to achieve practical standards rather than ideal standards.

Accepted Answer

A) True 
 B)False

Question 4

What is the overhead volume variance?
 What would be the cause of a favorable volume variance?

Accepted Answer

A volume variance occurs when the actual

Question 5

Identify the four steps in the budgetary control process.

Accepted Answer

The four steps are: (1)develop the budge

Question 6

A management approach that emphasizes significant differences from plans is known as ___________________.

Accepted Answer

management

Question 7

A variable or flexible budget is so named because it only focuses on variable costs.

Accepted Answer

A) True 
 B)False

Question 8

A flexible budget expresses all costs on a per unit basis.

Accepted Answer

A) True 
 B)False

Question 9

The difference between actual and standard cost caused by the difference between the actual quantity and the standard quantity is called the:

Accepted Answer

A) Controllable variance. 
B) Standard variance. 
C) Budget variance. 
D) Quantity variance. 
E) Price variance. 
A) Controllable variance. 
B) Standard variance. 
C) Budget variance. 
D) Quantity variance. 
E) Price variance.

Question 10

Regarding overhead costs,as volume increases:

Accepted Answer

A) Unit fixed cost increases, unit variable cost decreases. 
B) Unit fixed cost decreases, unit variable cost increases. 
C) Unit variable cost decreases, unit fixed cost remains constant. 
D) Unit fixed cost decreases, unit variable cost remains constant. 
E) Both unit fixed cost and unit variable cost remain constant. 
A) Unit fixed cost increases, unit variable cost decreases. 
B) Unit fixed cost decreases, unit variable cost increases. 
C) Unit variable cost decreases, unit fixed cost remains constant. 
D) Unit fixed cost decreases, unit variable cost remains constant. 
E) Both unit fixed cost and unit variable cost remain constant.

Question 11

Kyle,Inc.has collected the following data on one of its products.The direct materials quantity variance is:
$$\begin{array} { l l } 
\text { Direct materials stardard (4lbs. @ \$1/lb.) } & \$ 4 \text { per firished unit } \
\text { Total direct materials cost variance-unfavorable } & \$ 13,750 \
\text { Actual direct materials used } & 150,000 \text { bs. } \
\text { Actual firushed units produced } & 30,000 \text { units }
\end{array}$$

Accepted Answer

A) $30,000 favorable. 
B) $13,750 unfavorable. 
C) $16,250 favorable. 
D) $30,000 unfavorable. 
E) $13,750 favorable. 
A) $30,000 favorable. 
B) $13,750 unfavorable. 
C) $16,250 favorable. 
D) $30,000 unfavorable. 
E) $13,750 favorable.

Question 12

Adams,Inc.uses the following standard to produce a single unit of its product: overhead (2 hrs.@ $3/hr.)$ 6.The flexible budget for overhead is $100,000 plus $1 per direct labor hour.Actual data for the month show overhead costs of $150,000,and 24,000 units produced.The overhead volume variance is:

Accepted Answer

A) $10,000 favorable. 
B) $12,000 favorable. 
C) $ 4,000 unfavorable. 
D) $16,000 unfavorable. 
E) $36,000 unfavorable. 
A) $10,000 favorable. 
B) $12,000 favorable. 
C) $ 4,000 unfavorable. 
D) $16,000 unfavorable. 
E) $36,000 unfavorable.

Question 13

The difference between the flexible budget sales and the fixed budget sales is called the __________________________ variance.

Accepted Answer

The answer of The difference between the flexible budget sales...

Question 14

A cost variance is the difference between actual cost and standard cost.

Accepted Answer

A) True 
 B)False

Question 15

Elroy Co.has prepared the following fixed budget for the year,assuming production and sales of 30,000 units.This level of production represents 80% of capacity.
   Calculate the following flexible budget amounts at the indicated levels of capacity:

Accepted Answer

Capacity = 30,000 un

Question 16

A volume variance is the difference between overhead at maximum production volume and that at the budgeted production volume.

Accepted Answer

A) True 
 B)False

Question 17

Kyle,Inc.has collected the following data on one of its products.The direct materials price variance is:
$$\begin{array} { l l } 
\text { Direct materials stardard (4lbs. @ \$1/lb.) } & \$ 4 \text { per firished unit } \
\text { Total direct materials cost variance-unfavorable } & \$ 13,750 \
\text { Actual direct materials used } & 150,000 \text { bs. } \
\text { Actual firushed units produced } & 30,000 \text { units }
\end{array}$$

Accepted Answer

A) $13,750 unfavorable. 
B) $16,250 unfavorable. 
C) $16,250 favorable. 
D) $30,000 unfavorable. 
E) $33,000 favorable. 
A) $13,750 unfavorable. 
B) $16,250 unfavorable. 
C) $16,250 favorable. 
D) $30,000 unfavorable. 
E) $33,000 favorable.

Question 18

When recording the journal entry for labor,the Goods in Process Inventory account is

Accepted Answer

A) Debited for standard labor cost. 
B) Debited for actual labor cost. 
C) Credited for standard labor cost. 
D) Credited for actual labor cost. 
E) Not used. 
A) Debited for standard labor cost. 
B) Debited for actual labor cost. 
C) Credited for standard labor cost. 
D) Credited for actual labor cost. 
E) Not used.

Question 19

The difference between the actual cost incurred and the standard cost is called the:

Accepted Answer

A) Flexible variance. 
B) Price variance. 
C) Cost variance. 
D) Controllable variance. 
E) Volume variance. 
A) Flexible variance. 
B) Price variance. 
C) Cost variance. 
D) Controllable variance. 
E) Volume variance.

Question 20

The following information comes from the records of Dina Co.for the current period.
a.Compute the overhead controllable and volume variances.In each case,state whether the variance is favorable or unfavorable.
b.Prepare the journal entries to charge overhead costs to goods in process and the overhead variances to their proper accounts.
   Factory overhead (based on budgeted production of 24,500 units)
Variable overhead $2.25/direct labor hour
Fixed overhead $1.95/direct labor hour

Accepted Answer

The answer of The following information comes from the records...

Exam 23: Flexible Budgets and Standard Costs

Sales variances allow managers to focus on sales mix as well as sales quantities.

When standard manufacturing costs are recorded in the accounts and the cost variances are immaterial at the end of the accounting period,the cost variances should be:

Companies promoting continuous improvement strive to achieve practical standards rather than ideal standards.

What is the overhead volume variance? What would be the cause of a favorable volume variance?

Identify the four steps in the budgetary control process.

A management approach that emphasizes significant differences from plans is known as ___________________.

A variable or flexible budget is so named because it only focuses on variable costs.

A flexible budget expresses all costs on a per unit basis.

The difference between actual and standard cost caused by the difference between the actual quantity and the standard quantity is called the:

Regarding overhead costs,as volume increases:

Adams,Inc.uses the following standard to produce a single unit of its product: overhead (2 hrs.@ $3/hr.)$ 6.The flexible budget for overhead is $100,000 plus $1 per direct labor hour.Actual data for the month show overhead costs of $150,000,and 24,000 units produced.The overhead volume variance is:

The difference between the flexible budget sales and the fixed budget sales is called the __________________________ variance.

A cost variance is the difference between actual cost and standard cost.

Elroy Co.has prepared the following fixed budget for the year,assuming production and sales of 30,000 units.This level of production represents 80% of capacity. Calculate the following flexible budget amounts at the indicated levels of capacity:

A volume variance is the difference between overhead at maximum production volume and that at the budgeted production volume.

When recording the journal entry for labor,the Goods in Process Inventory account is

The difference between the actual cost incurred and the standard cost is called the:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

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