Question 1

Montaigne Corp.has the following information about its standards and production activity for November.The volume variance is:

Accepted Answer

A) $1,295U. 
B) $1,295F. 
C) $2,400U. 
D) $2,400F. 
E) $3,695U. 
A) $1,295U. 
B) $1,295F. 
C) $2,400U. 
D) $2,400F. 
E) $3,695U.

Question 2

Static budget is another name for:

Accepted Answer

A) Standard budget. 
B) Flexible budget. 
C) Variable budget. 
D) Fixed budget. 
E) Master budget. 
A) Standard budget. 
B) Flexible budget. 
C) Variable budget. 
D) Fixed budget. 
E) Master budget.

Question 3

Although a fixed budget is only useful over the relevant range of operations,a flexible budget is useful over all possible production levels.

Accepted Answer

A) True 
 B)False

Question 4

An unfavorable variance is recorded with a debit.

Accepted Answer

A) True 
 B)False

Question 5

A company uses the following standard costs to produce a single unit of output. $$\begin{array} { l l l l } 
\text { Direct materals } & 6 \text { pourds at } \$ 0.90 \text { per pound } & = & \$ 5.40 \
\text { Direct labor } & 0.5 \text { hour at } \$ 12.00 \text { per hour } & = & \$ 6.00 \
\text { Marufacturing overhead } & 0.5 \text { hour at } \$ 4.80 \text { per hour } & = \$ 2.40
\end{array}$$ During the latest month,the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output.Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked.Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400.Based on this information,the direct labor efficiency variance for the month was:

Accepted Answer

A) $3,650 favorable 
B) $2,450 favorable 
C) $1,200 unfavorable 
D) $1,200 favorable 
E) $2,450 unfavorable 
A) $3,650 favorable 
B) $2,450 favorable 
C) $1,200 unfavorable 
D) $1,200 favorable 
E) $2,450 unfavorable

Question 6

A company's flexible budget for 48,000 units of production showed variable overhead costs of $72,000 and fixed overhead costs of $64,000.The company incurred overhead costs of $122,800 while operating at a volume of 40,000 units.The total controllable cost variance is:

Accepted Answer

A) $ 1,200 favorable. 
B) $ 1,200 unfavorable. 
C) $13,200 favorable. 
D) $13,200 unfavorable. 
E) $15,200 favorable. 
A) $ 1,200 favorable. 
B) $ 1,200 unfavorable. 
C) $13,200 favorable. 
D) $13,200 unfavorable. 
E) $15,200 favorable.

Question 7

A company provided the following direct materials cost information.Compute the cost variance. Stardard costs assigned:
Direct materials standard cost $( 405,000$ urits@ $\$ 2 / unit)$      $\$ 810,000$
Actual costs
Direct Materials costs incured (403,750urits @ \$2.20/urit)      $\$ 888,250$

Accepted Answer

A) $2,500 Favorable. 
B) $78,250 Favorable 
C) $78,250 Unfavorable 
D) $80,750 Favorable. 
E) $80,750 Unfavorable. 
A) $2,500 Favorable. 
B) $78,250 Favorable 
C) $78,250 Unfavorable 
D) $80,750 Favorable. 
E) $80,750 Unfavorable.

Question 8

A flexible budget expresses variable costs on a per unit basis and fixed costs on a total basis.

Accepted Answer

A) True 
 B)False

Question 9

Casco Co.planned to produce and sell 40,000 units.At that volume level,variable costs are determined to be $320,000 and fixed costs are $30,000.The planned selling price is $10 per unit.Casco actually produced and sold 42,000 units.
Using a contribution margin format:
(a)Prepare a fixed budget income statement for the planned level of sales and production.
(b)Prepare a flexible budget income statement for the actual level of sales and production.

Accepted Answer

The answer of Casco Co.planned to produce and sell 40,000...

Question 10

Sales variances may be computed in a manner similar to cost variances-that is,computing both price and volume variances.

Accepted Answer

A) True 
 B)False

Question 11

At the end of the accounting period,immaterial variances are closed to _____________.

Accepted Answer

The answer of At the end of the accounting period,immaterial...

Question 12

Brewer Company specializes in selling used cars.During the month,the dealership sold 22 cars at an average price of $15,000 each.The budget for the month was to sell 20 cars at an average price of $16,000.Compute the dealership's sales price variance for the month.

Accepted Answer

A) $22,000 unfavorable. 
B) $10,000 favorable. 
C) $22,000 favorable. 
D) $32,000 unfavorable. 
E) $32,000 favorable. 
A) $22,000 unfavorable. 
B) $10,000 favorable. 
C) $22,000 favorable. 
D) $32,000 unfavorable. 
E) $32,000 favorable.

Question 13

Which department is often responsible for the direct materials price variance?

Accepted Answer

A) The accounting department. 
B) The production department. 
C) The purchasing department. 
D) The finance department. 
E) The budgeting department. 
A) The accounting department. 
B) The production department. 
C) The purchasing department. 
D) The finance department. 
E) The budgeting department.

Question 14

One possible explanation for direct labor rate and efficiency variances is the use of workers with different skill levels.

Accepted Answer

A) True 
 B)False

Question 15

Cabot Company collected the following data regarding production of one of its products.Compute the direct labor efficiency variance.

Accepted Answer

A) $13,000 favorable. 
B) $40,500 favorable. 
C) $53,500 favorable. 
D) $13,000 unfavorable. 
E) $40,500 unfavorable. 
A) $13,000 favorable. 
B) $40,500 favorable. 
C) $53,500 favorable. 
D) $13,000 unfavorable. 
E) $40,500 unfavorable.

Question 16

What are sales variances?
 How are they used?

Accepted Answer

Sales variances reflect differences in p

Question 17

Sales variance analysis is useful for:

Accepted Answer

A) Planning purposes only. 
B) Budgeting purposes only. 
C) Control purposes only. 
D) Planning and control purposes. 
E) Planning and budgeting purposes. 
A) Planning purposes only. 
B) Budgeting purposes only. 
C) Control purposes only. 
D) Planning and control purposes. 
E) Planning and budgeting purposes.

Question 18

Perkins Company provides the following data developed for its master budget:
   Required:
Prepare flexible budgets for sales of 20,000,22,000 and 24,000 units.Use a contribution margin format.

Accepted Answer

The answer of Perkins Company provides the following data developed...

Question 19

Falcon Company's output for a period was assigned the standard direct labor cost of $17,160.If the company had a favorable direct labor rate variance of $1,000 and an unfavorable direct labor efficiency variance of $275,what was the total actual cost of direct labor incurred during the period?

Accepted Answer

The answer of Falcon Company's output for a period was...

Question 20

A fixed budget is also called a _____________ budget.

Accepted Answer

The answer of A fixed budget is also called a...

Exam 23: Flexible Budgets and Standard Costs

Montaigne Corp.has the following information about its standards and production activity for November.The volume variance is:

Static budget is another name for:

Although a fixed budget is only useful over the relevant range of operations,a flexible budget is useful over all possible production levels.

An unfavorable variance is recorded with a debit.

A company's flexible budget for 48,000 units of production showed variable overhead costs of $72,000 and fixed overhead costs of $64,000.The company incurred overhead costs of $122,800 while operating at a volume of 40,000 units.The total controllable cost variance is:

A flexible budget expresses variable costs on a per unit basis and fixed costs on a total basis.

Sales variances may be computed in a manner similar to cost variances-that is,computing both price and volume variances.

At the end of the accounting period,immaterial variances are closed to _____________.

Brewer Company specializes in selling used cars.During the month,the dealership sold 22 cars at an average price of $15,000 each.The budget for the month was to sell 20 cars at an average price of $16,000.Compute the dealership's sales price variance for the month.

Which department is often responsible for the direct materials price variance?

One possible explanation for direct labor rate and efficiency variances is the use of workers with different skill levels.

Cabot Company collected the following data regarding production of one of its products.Compute the direct labor efficiency variance.

What are sales variances? How are they used?

Sales variance analysis is useful for:

Perkins Company provides the following data developed for its master budget: Required: Prepare flexible budgets for sales of 20,000,22,000 and 24,000 units.Use a contribution margin format.

Falcon Company's output for a period was assigned the standard direct labor cost of $17,160.If the company had a favorable direct labor rate variance of $1,000 and an unfavorable direct labor efficiency variance of $275,what was the total actual cost of direct labor incurred during the period?

A fixed budget is also called a _____________ budget.

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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