Question 1

A variance is the difference between the actual result and a budgeted amount.

Accepted Answer

A) True 
 B)False

Question 2

Managers generally have more control over efficiency variances than rate variances.

Accepted Answer

A) True 
 B)False

Question 3

________ is a carefully predetermined amount usually expressed on a per-unit basis.

Accepted Answer

A) Variable marketing overhead 
B) A flexible budget 
C) A standard 
D) Fixed factory overhead 
E) A static budget 
A) Variable marketing overhead 
B) A flexible budget 
C) A standard 
D) Fixed factory overhead 
E) A static budget

Question 4

Universal Dive Products Ltd.makes high quality gear for scuba diving.Their top quality mask is called Super Mask and is produced in batches.The two batch activities are setup (cost driver = setup hours)and quality inspection (cost driver = inspection hours).The company budgeted to produce 40,000 masks; however, actual production was 50,000.The pertinent ABC data for the upcoming period is as follows:
   Static Budget:
   Actual Result:
   Required:
Calculate the flexible-budget rate and efficiency variances for the quality inspection activity.

Accepted Answer

Static budget batches = 40,000 units/100

Question 5

Use the information below to answer the following question(s).Sawyer Industries Inc.(SII), developed standard costs for direct material and direct labour.In 2019, SII estimated the following standard costs for one of their major products, the 30-litre heavy-duty plastic container.   During July 2020, SII produced and sold 10,000 containers using 2,200 kilograms of direct materials at an average actual cost per kilogram of $24 and 1,050 direct manufacturing labour hours at an average actual wage of $14.75 per hour.
-July's direct manufacturing labour flexible-budget variance is

Accepted Answer

A) $750.00 unfavourable. 
B) $262.50 favourable. 
C) $262.50 unfavourable. 
D) $487.50 favourable. 
E) $487.50 unfavourable. 
A) $750.00 unfavourable. 
B) $262.50 favourable. 
C) $262.50 unfavourable. 
D) $487.50 favourable. 
E) $487.50 unfavourable.

Question 6

Answer the following question(s)using the information below.Apple Valley Orchards, Inc.(AVO), developed standard costs for direct material and direct labour.In 2019, AVO estimated the following standard costs for one of their most well loved products, the AVO classic Grandma's large apple pie which had a brown sugar coating on the top of the crust as well as including cranberry and mince ingredients in addition to the apples.   During September 2020, AVO produced and sold 1,200 pies using 1,875 kilograms of direct materials at an average cost per kilogram of $7.00 and 280 direct labour hours at an average wage of $14.25 per hour.
-September's direct material rate variance is

Accepted Answer

A) $468.75 favourable. 
B) $300.00 favourable. 
C) $468.75 unfavourable. 
D) $450.00 favourable. 
E) $300.00 unfavourable. 
A) $468.75 favourable. 
B) $300.00 favourable. 
C) $468.75 unfavourable. 
D) $450.00 favourable. 
E) $300.00 unfavourable.

Question 7

Maldive Designs makes chair cushions.The standard direct materials quantity is 0.8 kilogram per cushion at a cost of $2.70 per kilogram.The actual results for the production of 15,000 cushions was 0.75 kilograms per cushion, at a cost of $2.65 per kilogram.Calculate the direct materials input rate variance and the direct materials efficiency variance.

Accepted Answer

a.Material input rat

Question 8

More insight into the efficiency variance for direct materials can be gained by subdividing it into the direct materials

Accepted Answer

A) mix and volume variances. 
B) market-share and market-size variances. 
C) rate and usage variances. 
D) price and efficiency variances. 
E) mix and yield variances. 
A) mix and volume variances. 
B) market-share and market-size variances. 
C) rate and usage variances. 
D) price and efficiency variances. 
E) mix and yield variances.

Question 9

The following data for the Garden Supplies Company pertains to the production of 2,500 garden spades during March.The spade consists of a wooden handle and a metal forged tool that comes in contact with the ground.Direct Materials (all materials purchased were used):
   Direct Manufacturing Labour:
   Required:
a.What is the standard direct material amount per garden spade?
b.What is the standard cost allowed for all units produced?
c.What is the total direct materials flexible-budget variance?
d.What is the direct material flexible-budget rate variance?
e.What is the total actual cost of direct manufacturing labour?
f.What is the labour rate variance for direct manufacturing labour?

Accepted Answer

a. @#IMG-DLM& b. @#IMG-DLM& c.

Question 10

Use the information below to answer the following question(s).Sawyer Industries Inc.(SII), developed standard costs for direct material and direct labour.In 2019, SII estimated the following standard costs for one of their major products, the 30-litre heavy-duty plastic container.   During July 2020, SII produced and sold 10,000 containers using 2,200 kilograms of direct materials at an average actual cost per kilogram of $24 and 1,050 direct manufacturing labour hours at an average actual wage of $14.75 per hour.
-July's direct material rate variance is

Accepted Answer

A) $2,800 favourable. 
B) $2,200 favourable. 
C) $5,000 unfavourable. 
D) $2,200 unfavourable. 
E) $2,000 favourable. 
A) $2,800 favourable. 
B) $2,200 favourable. 
C) $5,000 unfavourable. 
D) $2,200 unfavourable. 
E) $2,000 favourable.

Question 11

The static-budget variance can be subdivided into the flexible-budget variance and the sales-volume variance.

Accepted Answer

A) True 
 B)False

Question 12

Jackson a is a company that delivers automobile repair parts to service garages.The following information is for three of the company's activities in 2018:
   The output measure is the number of deliveries.   Batch size in terms of deliveries:
   Required:
a.Calculate the flexible-budget variance for each activity in 2018.
b.Calculate the price and efficiency variances for each activity in 2018.

Accepted Answer

a.Flexible-budget variances
Receivables:

Question 13

A flexible budget enables managers to compute a richer set of variances than a static budget does.

Accepted Answer

A) True 
 B)False

Question 14

Vienna Chocolate Company produces fudge in large batches.One batch of fudge has the following standard costs and amounts:
   Vienna Chocolate Company produced 400 batches of fudge in the most recent month.Actual input costs and per batch usage levels were as follows:
   Required:
a.Calculate the total material input rate variance.
b.Calculate the total material efficiency variance.
c.Calculate the total labour rate variance.
d.Calculate the total labour efficiency variance.

Accepted Answer

a.Material input rate variance

Question 15

Answer the following question(s)using the information below.Abernathy Corporation used the following data to evaluate their current operating system.The company sells items for $10 each and used a budgeted selling price of $10 per unit.  
-What is the static-budget variance of variable costs?

Accepted Answer

A) $1,200 favourable 
B) $18,800 favourable 
C) $20,000 favourable 
D) $1,200 unfavourable 
E) $18,800 unfavourable 
A) $1,200 favourable 
B) $18,800 favourable 
C) $20,000 favourable 
D) $1,200 unfavourable 
E) $18,800 unfavourable

Question 16

A budget that is adjusted in accordance with changes in actual output is called

Accepted Answer

A) a balanced budget. 
B) a cost budget. 
C) a flexible budget. 
D) a trial balance budget. 
E) a static budget. 
A) a balanced budget. 
B) a cost budget. 
C) a flexible budget. 
D) a trial balance budget. 
E) a static budget.

Question 17

The sales-volume variance of operating income is a measure of efficiency.

Accepted Answer

A) True 
 B)False

Question 18

Some financial variances show increases in operating income relative to a budgeted or allocated amount, and others show decreases in operating income.Respectively, these variances are

Accepted Answer

A) budgeted, standard. 
B) favourable, unfavourable. 
C) standard, budgeted. 
D) unfavourable, favourable. 
E) fixed, variable. 
A) budgeted, standard. 
B) favourable, unfavourable. 
C) standard, budgeted. 
D) unfavourable, favourable. 
E) fixed, variable.

Question 19

Answer the following question(s)using the information below.Eco Furniture Ltd.makes wooden furniture.One of their products is a wooden desk.The exterior is made of walnut, a high quality wood, but the interior drawers are made of pine, a less expensive wood.The budgeted direct materials quantities and prices for one desk are:
   During the month of November 600 desks were produced.The actual material volume and costs were:
  
-What is the direct materials efficiency variance for pine?

Accepted Answer

A) $8,550 U 
B) $7,650 F 
C) $8,700 F 
D) $9,250 U 
E) $8,150 U 
A) $8,550 U 
B) $7,650 F 
C) $8,700 F 
D) $9,250 U 
E) $8,150 U

Question 20

Samson Equipment Ltd.is a company that manufactures an abdominal exerciser called The Ab Rippler.The following information is for three of the company's activities in 2018:
   The output measure is the number of units produced.   Batch size in terms of units produced:
   Required:
a.Calculate the flexible-budget variance for each activity in 2018.
b.Calculate the price and efficiency variances for each activity in 2018.

Accepted Answer

a.Flexible-budget variances
Manufacturin

A variance is the difference between the actual result and a budgeted amount.

Managers generally have more control over efficiency variances than rate variances.

________ is a carefully predetermined amount usually expressed on a per-unit basis.

More insight into the efficiency variance for direct materials can be gained by subdividing it into the direct materials

The static-budget variance can be subdivided into the flexible-budget variance and the sales-volume variance.

A flexible budget enables managers to compute a richer set of variances than a static budget does.

Answer the following question(s)using the information below.Abernathy Corporation used the following data to evaluate their current operating system.The company sells items for $10 each and used a budgeted selling price of $10 per unit. -What is the static-budget variance of variable costs?

A budget that is adjusted in accordance with changes in actual output is called

The sales-volume variance of operating income is a measure of efficiency.

Some financial variances show increases in operating income relative to a budgeted or allocated amount, and others show decreases in operating income.Respectively, these variances are

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets, Variances, and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, Product Profitability Decisions, and Cost Management

Strategy, Balanced Scorecard, and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, Rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters

Exam 7: Flexible Budgets, Variances, and Management Control: I

A variance is the difference between the actual result and a budgeted amount.

Managers generally have more control over efficiency variances than rate variances.

________ is a carefully predetermined amount usually expressed on a per-unit basis.

More insight into the efficiency variance for direct materials can be gained by subdividing it into the direct materials

The static-budget variance can be subdivided into the flexible-budget variance and the sales-volume variance.

A flexible budget enables managers to compute a richer set of variances than a static budget does.

Answer the following question(s)using the information below.Abernathy Corporation used the following data to evaluate their current operating system.The company sells items for $10 each and used a budgeted selling price of $10 per unit. -What is the static-budget variance of variable costs?

A budget that is adjusted in accordance with changes in actual output is called

The sales-volume variance of operating income is a measure of efficiency.

Some financial variances show increases in operating income relative to a budgeted or allocated amount, and others show decreases in operating income.Respectively, these variances are

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets, Variances, and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, Product Profitability Decisions, and Cost Management

Strategy, Balanced Scorecard, and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, Rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters