Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Estimated cash payments are planned reductions in cash from all of the following except:

Accepted Answer

A) manufacturing and selling and administrative expenses. 
B) capital expenditures. 
C) notes receivables and accounts receivable collections. 
D) payments for interest or dividends. 
A) manufacturing and selling and administrative expenses. 
B) capital expenditures. 
C) notes receivables and accounts receivable collections. 
D) payments for interest or dividends.

Question 3

Since the controllable variance measures the efficiency of using variable overhead resources,if budgeted variable overhead exceeds actual results,the variance is favorable.

Accepted Answer

A) True 
 B)False

Question 4

Production and sales estimates for June are as follows:

Accepted Answer

A) 10,000. 
B) 12,000. 
C) 13,000. 
D) 12,500. 
A) 10,000. 
B) 12,000. 
C) 13,000. 
D) 12,500.

Question 5

The unfavorable volume variance may be due to all of the following factors except:

Accepted Answer

A) failure to maintain an even flow of work. 
B) machine breakdowns. 
C) unexpected increases in the cost of utilities. 
D) failure to obtain enough sales orders. 
A) failure to maintain an even flow of work. 
B) machine breakdowns. 
C) unexpected increases in the cost of utilities. 
D) failure to obtain enough sales orders.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

The standard price and quantity of direct materials are separated because:

Accepted Answer

A) GAAP reporting requires this separation. 
B) direct materials prices are controlled by the purchasing department,and quantity used is controlled by the production department. 
C) standard quantities are more difficult to estimate than standard prices. 
D) standard prices change more frequently than standard quantities. 
A) GAAP reporting requires this separation. 
B) direct materials prices are controlled by the purchasing department,and quantity used is controlled by the production department. 
C) standard quantities are more difficult to estimate than standard prices. 
D) standard prices change more frequently than standard quantities.

Question 8

If Division Inc.expects to sell 300,000 units in 2015,desires ending inventory of 22,000 units,and has 24,000 units on hand as of the beginning of the year,the budgeted volume of production for 2015 is 298,000 units.

Accepted Answer

A) True 
 B)False

Question 9

If the standard to produce a given amount of product is 900 units of direct materials at $11 and the actual was 800 units at $12,the direct materials quantity variance was $1,100 unfavorable.

Accepted Answer

A) True 
 B)False

Question 10

A variable cost system is an accounting system where standards are set for each manufacturing cost element.

Accepted Answer

A) True 
 B)False

Question 11

If the expected sales volume for the current period is 7,800 units,the desired ending inventory is 500 units,and the beginning inventory is 400 units,the number of units set forth in the production budget,representing total production for the current period,is:

Accepted Answer

A) 7,300. 
B) 6,900. 
C) 7,800. 
D) 7,900. 
A) 7,300. 
B) 6,900. 
C) 7,800. 
D) 7,900.

Question 12

The standard cost is a detailed estimate of how much a product should cost.

Accepted Answer

A) True 
 B)False

Question 13

The budget process involves all of the following except:

Accepted Answer

A) establishing specific goals. 
B) executing plans to achieve the goals. 
C) periodically comparing actual results with the goals. 
D) dismissing all managers who fail to achieve operational goals specified in the budget. 
A) establishing specific goals. 
B) executing plans to achieve the goals. 
C) periodically comparing actual results with the goals. 
D) dismissing all managers who fail to achieve operational goals specified in the budget.

Question 14

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor,the variance is termed:

Accepted Answer

A) variable variance. 
B) rate variance. 
C) quantity variance. 
D) volume variance. 
A) variable variance. 
B) rate variance. 
C) quantity variance. 
D) volume variance.

Question 15

The direct labor time variance measures the efficiency of the direct labor force.

Accepted Answer

A) True 
 B)False

Question 16

Production estimates for July are as follows:

Accepted Answer

A) 25,200. 
B) 27,100. 
C) 31,900. 
D) 34,800. 
A) 25,200. 
B) 27,100. 
C) 31,900. 
D) 34,800.

Question 17

Which of the following are the principal components of a master budget?

Accepted Answer

A) Production budget 
B) Sales budget 
C) Capital expenditures budget 
D) All of these 
A) Production budget 
B) Sales budget 
C) Capital expenditures budget 
D) All of these

Question 18

Refer to the information provided for Answer Corporation.The amount of the direct labor rate variance is:

Accepted Answer

A) $4,440 unfavorable. 
B) $4,500 favorable. 
C) $4,440 favorable. 
D) $4,500 unfavorable. 
A) $4,440 unfavorable. 
B) $4,500 favorable. 
C) $4,440 favorable. 
D) $4,500 unfavorable.

Question 19

Financial reporting systems that are guided by the principle of exceptions concept focus attention on variances from standard costs.

Accepted Answer

A) True 
 B)False

Question 20

Refer to the information provided for Octofic Cans Inc.Budgeted production for tin cans during the month is:

Accepted Answer

A) 108,000 units. 
B) 83,000 units. 
C) 112,000 units. 
D) 120,000 units. 
A) 108,000 units. 
B) 83,000 units. 
C) 112,000 units. 
D) 120,000 units.

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

Estimated cash payments are planned reductions in cash from all of the following except:

Since the controllable variance measures the efficiency of using variable overhead resources,if budgeted variable overhead exceeds actual results,the variance is favorable.

Production and sales estimates for June are as follows:

The unfavorable volume variance may be due to all of the following factors except:

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

The standard price and quantity of direct materials are separated because:

If Division Inc.expects to sell 300,000 units in 2015,desires ending inventory of 22,000 units,and has 24,000 units on hand as of the beginning of the year,the budgeted volume of production for 2015 is 298,000 units.

If the standard to produce a given amount of product is 900 units of direct materials at $11 and the actual was 800 units at $12,the direct materials quantity variance was $1,100 unfavorable.

A variable cost system is an accounting system where standards are set for each manufacturing cost element.

If the expected sales volume for the current period is 7,800 units,the desired ending inventory is 500 units,and the beginning inventory is 400 units,the number of units set forth in the production budget,representing total production for the current period,is:

The standard cost is a detailed estimate of how much a product should cost.

The budget process involves all of the following except:

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor,the variance is termed:

The direct labor time variance measures the efficiency of the direct labor force.

Production estimates for July are as follows:

Which of the following are the principal components of a master budget?

Refer to the information provided for Answer Corporation.The amount of the direct labor rate variance is:

Financial reporting systems that are guided by the principle of exceptions concept focus attention on variances from standard costs.

Refer to the information provided for Octofic Cans Inc.Budgeted production for tin cans during the month is:

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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Exam 13: Budgeting and Standard Cost Systems

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

Estimated cash payments are planned reductions in cash from all of the following except:

Since the controllable variance measures the efficiency of using variable overhead resources,if budgeted variable overhead exceeds actual results,the variance is favorable.

Production and sales estimates for June are as follows:

The unfavorable volume variance may be due to all of the following factors except:

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

The standard price and quantity of direct materials are separated because:

If Division Inc.expects to sell 300,000 units in 2015,desires ending inventory of 22,000 units,and has 24,000 units on hand as of the beginning of the year,the budgeted volume of production for 2015 is 298,000 units.

If the standard to produce a given amount of product is 900 units of direct materials at $11 and the actual was 800 units at $12,the direct materials quantity variance was $1,100 unfavorable.

A variable cost system is an accounting system where standards are set for each manufacturing cost element.

If the expected sales volume for the current period is 7,800 units,the desired ending inventory is 500 units,and the beginning inventory is 400 units,the number of units set forth in the production budget,representing total production for the current period,is:

The standard cost is a detailed estimate of how much a product should cost.

The budget process involves all of the following except:

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor,the variance is termed:

The direct labor time variance measures the efficiency of the direct labor force.

Production estimates for July are as follows:

Which of the following are the principal components of a master budget?

Refer to the information provided for Answer Corporation.The amount of the direct labor rate variance is:

Financial reporting systems that are guided by the principle of exceptions concept focus attention on variances from standard costs.

Refer to the information provided for Octofic Cans Inc.Budgeted production for tin cans during the month is:

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters