Exam 13: Budgeting and Standard Cost Systems

Using a standard costing system for nonmanufacturing expenses is easily administered because the expenses generally relate to a repetitive,measurable output.

Periodic comparisons between planned objectives and actual performance are reported in:

Refer to the information provided for Octofic Cans Inc.Budgeted sales for the month are:

Department managers plan lower goals than possible in order to build in a cushion for unexpected events.This result in:

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

The standard fixed factory overhead rate is based on 100% capacity of 135,000 machine hours for Interile Inc.The standard costs and the actual costs of factory overhead for the production of 32,000 units during March were as follows:

The difference between the budgeted fixed overhead at 100% of normal capacity and the standard fixed cost for the actual units produced is termed volume variance.

Standard costs serve as a device for measuring efficiency.

It would be most appropriate to develop direct labor time standards for use in administrative activities when the activity involves:

Based on the following production and sales estimates for May,determine the number of units expected to be manufactured in May.

If Division Inc.expects to sell 200,000 units in 2015,desires ending inventory of 24,000 units,and has 22,000 units on hand as of the beginning of the year,the budgeted volume of production for 2015 is 198,000 units.

The formula to compute direct materials price variance is:

Refer to the information provided for MetalHead Inc.What is the direct materials quantity variance?

Refer to the information provided for Standard Inc.The amount of the direct materials quantity variance is:

Refer to the information provided for Benjamin Corporation.The cash collections from accounts receivable in September are:

Which of the following budgets provides the starting point for the preparation of the direct labor cost budget?

As a device for measuring efficiency,standard cost systems enables management to determine the causes of differences between what a product should cost and how much it actually costs to produce.

The first budget to be prepared is usually the sales budget.

Standard Corporation uses a standard cost system.The following information was provided for the period that just ended:

For which of the following reasons,management accountants usually provide for a minimum cash balance in their cash budgets?