Question 1

The difference between actual results and expected performances is referred to as the ________.

Accepted Answer

A) variance 
B) critical area 
C) target numerate 
D) cardinal denominator 
E) parameter of importance 
A) variance 
B) critical area 
C) target numerate 
D) cardinal denominator 
E) parameter of importance

Question 2

The master budget is called a static budget because the budget for the period is developed around a single,or static,planned output level.

Accepted Answer

A) True 
 B)False

Question 3

All of the following qualify as a standard except ________.

Accepted Answer

A) costs 
B) prices 
C) actual costs 
D) input quantities 
E) output quantities 
A) costs 
B) prices 
C) actual costs 
D) input quantities 
E) output quantities

Question 4

Laughton Incorporated planned to use $30 of material per unit but actually used $31 of material per unit,and planned to make 1,500 units but actually made 1,900 units.
Required:
Compute the flexible budget;the flexible-budget variance,and the sales-volume variance.

Accepted Answer

The flexible budget is $57,000;the flexi

Question 5

Which of the following if not true about the variance-analysis approach?

Accepted Answer

A) Variable costs have unused capacity. 
B) Variable costs never have any unused capacity. 
C) The detailed analysis helps managers identify and focus on the areas not operating as expected. 
D) Manages of small businesses understand their operations based on personal observations and nonfinancial measures. 
E) Managers find less value in doing additional measurements required for comprehensive analyses. 
A) Variable costs have unused capacity. 
B) Variable costs never have any unused capacity. 
C) The detailed analysis helps managers identify and focus on the areas not operating as expected. 
D) Manages of small businesses understand their operations based on personal observations and nonfinancial measures. 
E) Managers find less value in doing additional measurements required for comprehensive analyses.

Question 6

Delicious Dishes Company has a fixed overhead budget of $3,600,000 in 2013,the operating managers budgeted 60,000 machine-hours for the year.A fixed overhead cost rate of $65 per machine hour and rate of 0.70 hours per actual output unit.
Required
Compute the budgeted fixed overhead cost per output unit.

Accepted Answer

A) $35 per dish set 
B) $42 per dish set 
C) $18 per dish set 
D) $32 per dish set 
E) $23 per dish set 
A) $35 per dish set 
B) $42 per dish set 
C) $18 per dish set 
D) $32 per dish set 
E) $23 per dish set

Question 7

What is the purpose of standard costing?

Accepted Answer

Managers can use standard costing to sim

Question 8

The only difference between the static budget and the flexible budget is that the static budget is prepared for the planned output of units,whereas the flexible budget is based on the actual output of units.

Accepted Answer

A) True 
 B)False

Question 9

Scribe Paper Production Company has calculated a budgeted fixed overhead cost of $500,000 and one unit of output consumes 0.70 machine hours.One machine hour has been calculated to cost $70.Because of several order changes the actual output is 10,000 units.
Required
Compute the production-volume variance for Scribe Paper Production Company and indicate whether the value indicates a favorable,F,or unfavorable,U,variance.

Accepted Answer

A) $10,000;U 
B) $100,000;F 
C) $10,000;F 
D) $70,000;U 
E) $100,000;U 
A) $10,000;U 
B) $100,000;F 
C) $10,000;F 
D) $70,000;U 
E) $100,000;U

Question 10

The measure of the actual result deducted from the flexible budget amount is the:

Accepted Answer

A) static budget. 
B) price variance. 
C) rate variance. 
D) sales-budget variance. 
E) flexible-budget variance. 
A) static budget. 
B) price variance. 
C) rate variance. 
D) sales-budget variance. 
E) flexible-budget variance.

Question 11

Atlas Cable Company has a total variable overhead cost at $3,200,000;operational management has estimated that one actual output unit takes 0.5 machine hours.The 80,000 machine hours have been budgeted for the year 2013.
Required
Compute the budgeted variable overhead cost rate per output unit.

Accepted Answer

A) $35 per cable unit 
B) $15 per cable unit 
C) $20 per cable unit 
D) $30 per cable unit 
E) $28 per cable unit 
A) $35 per cable unit 
B) $15 per cable unit 
C) $20 per cable unit 
D) $30 per cable unit 
E) $28 per cable unit

Question 12

Managers use actual input data from past periods because this historical data can be analyzed for trends or patterns to obtain estimates of budgeted prices.

Accepted Answer

A) True 
 B)False

Question 13

There is no efficiency variance for fixed overhead costs because a specific number of hours of fixed overhead costs will be unaffected by how efficiently machine-hours are used to produce output in a given budget period.

Accepted Answer

A) True 
 B)False

Question 14

Total-overhead variance:

Accepted Answer

A) equals the total amount of overallocated overhead. 
B) equals the total amount of underallocated overhead. 
C) is less than the total amount of underallocated overhead. 
D) is more than the total amount of underallocated overhead. 
E) is more than the total amount of overallocated plus underallocated overhead. 
A) equals the total amount of overallocated overhead. 
B) equals the total amount of underallocated overhead. 
C) is less than the total amount of underallocated overhead. 
D) is more than the total amount of underallocated overhead. 
E) is more than the total amount of overallocated plus underallocated overhead.

Question 15

Spectrum Fine Glass,a glass door manufacturer,has a static-budget variance of $35,000,U,and a sales-volume variance of $430,000,U.
Required
Compute the flexible-budget variance for Spectrum Fine Glass and identify whether the flexible-budget variance is favorable or unfavorable.

Accepted Answer

A) $395,000 U variance 
B) $295,000 F variance. 
C) $405,000 U variance 
D) $465,000 U variance 
E) $505,000 F variance
Required 
A) $395,000 U variance 
B) $295,000 F variance. 
C) $405,000 U variance 
D) $465,000 U variance 
E) $505,000 F variance
Required

Question 16

A disadvantage of using actual input data from past periods is that past data can include inefficiencies such as wastage of direct materials.

Accepted Answer

A) True 
 B)False

Question 17

Maryland Company planned to use $40 of material per unit,but actually used $38.75 of material per unit,and planned to make 2,000 units but actually made 1,785 units.
Required:
Compute the flexible-budget amount;the flexible-budget variance;and,the sales-volume variance.

Accepted Answer

The flexible budget is $71,400.The flexi

Question 18

Because there is no efficiency variance,the fixed overhead spending variance is more than the fixed overhead flexible-budget variance.

Accepted Answer

A) True 
 B)False

The difference between actual results and expected performances is referred to as the ________.

The master budget is called a static budget because the budget for the period is developed around a single,or static,planned output level.

All of the following qualify as a standard except ________.

Laughton Incorporated planned to use $30 of material per unit but actually used $31 of material per unit,and planned to make 1,500 units but actually made 1,900 units. Required: Compute the flexible budget;the flexible-budget variance,and the sales-volume variance.

Which of the following if not true about the variance-analysis approach?

What is the purpose of standard costing?

The only difference between the static budget and the flexible budget is that the static budget is prepared for the planned output of units,whereas the flexible budget is based on the actual output of units.

The measure of the actual result deducted from the flexible budget amount is the:

Atlas Cable Company has a total variable overhead cost at $3,200,000;operational management has estimated that one actual output unit takes 0.5 machine hours.The 80,000 machine hours have been budgeted for the year 2013. Required Compute the budgeted variable overhead cost rate per output unit.

Managers use actual input data from past periods because this historical data can be analyzed for trends or patterns to obtain estimates of budgeted prices.

There is no efficiency variance for fixed overhead costs because a specific number of hours of fixed overhead costs will be unaffected by how efficiently machine-hours are used to produce output in a given budget period.

Total-overhead variance:

Spectrum Fine Glass,a glass door manufacturer,has a static-budget variance of $35,000,U,and a sales-volume variance of $430,000,U. Required Compute the flexible-budget variance for Spectrum Fine Glass and identify whether the flexible-budget variance is favorable or unfavorable.

A disadvantage of using actual input data from past periods is that past data can include inefficiencies such as wastage of direct materials.

Maryland Company planned to use $40 of material per unit,but actually used $38.75 of material per unit,and planned to make 2,000 units but actually made 1,785 units. Required: Compute the flexible-budget amount;the flexible-budget variance;and,the sales-volume variance.

Because there is no efficiency variance,the fixed overhead spending variance is more than the fixed overhead flexible-budget variance.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Performance Measurement and Compensation

Filters

Exam 13: Flexible Budgets, cost Variances, and Management Control

The difference between actual results and expected performances is referred to as the ________.

The master budget is called a static budget because the budget for the period is developed around a single,or static,planned output level.

All of the following qualify as a standard except ________.

Laughton Incorporated planned to use $30 of material per unit but actually used $31 of material per unit,and planned to make 1,500 units but actually made 1,900 units. Required: Compute the flexible budget;the flexible-budget variance,and the sales-volume variance.

Which of the following if not true about the variance-analysis approach?

What is the purpose of standard costing?

The only difference between the static budget and the flexible budget is that the static budget is prepared for the planned output of units,whereas the flexible budget is based on the actual output of units.

The measure of the actual result deducted from the flexible budget amount is the:

Atlas Cable Company has a total variable overhead cost at $3,200,000;operational management has estimated that one actual output unit takes 0.5 machine hours.The 80,000 machine hours have been budgeted for the year 2013. Required Compute the budgeted variable overhead cost rate per output unit.

Managers use actual input data from past periods because this historical data can be analyzed for trends or patterns to obtain estimates of budgeted prices.

There is no efficiency variance for fixed overhead costs because a specific number of hours of fixed overhead costs will be unaffected by how efficiently machine-hours are used to produce output in a given budget period.

Total-overhead variance:

Spectrum Fine Glass,a glass door manufacturer,has a static-budget variance of $35,000,U,and a sales-volume variance of $430,000,U. Required Compute the flexible-budget variance for Spectrum Fine Glass and identify whether the flexible-budget variance is favorable or unfavorable.

A disadvantage of using actual input data from past periods is that past data can include inefficiencies such as wastage of direct materials.

Maryland Company planned to use $40 of material per unit,but actually used $38.75 of material per unit,and planned to make 2,000 units but actually made 1,785 units. Required: Compute the flexible-budget amount;the flexible-budget variance;and,the sales-volume variance.

Because there is no efficiency variance,the fixed overhead spending variance is more than the fixed overhead flexible-budget variance.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Performance Measurement and Compensation

Filters