Question 1

Identify and explain the primary differences between fixed and flexible budgets.

Accepted Answer

A fixed budget is prepared before an ope

Question 2

________ are preset costs for delivering a product or service under normal conditions.

Accepted Answer

The answer of ________ are preset costs for delivering a...

Question 3

Match between columns
                        Premises:  Occurs when there is a difference between the actual and standard volume of production.
 A planning budget based on a single predicted amount of sales or other activity measure.
 Preset costs for delivering a product, or service under normal conditions.
 A process of examining differences between actual and budgeted sales or costs and describing them in terms of the price and quantity differences.
 The difference between actual price per unit of input and standard price per unit of input.
 A budget prepared based on several different amounts of sales, often including a best-case and worst-case scenario.
 The difference between actual quantity of input used and standard quantity of input used.
 The difference between actual overhead costs incurred and the budgeted overhead costs based on a flexible budget.
 A management process to focus on significant variances and give less attention to areas where performance is close to the standard.
 The difference between actual and standard cost.

Accepted Answer

The Answer of Cost variance and Volume variance and Price is...

Question 4

Product A has a sales price of $10 per unit. Based on a 10,000-unit production level, the variable costs are $6 per unit and the fixed costs are $3 per unit. Using a flexible budget for 12,500 units, what is the budgeted operating income from Product A?

Accepted Answer

A)  $35,000. 
B)  $30,000. 
C)  $25,000. 
D)  $12,500. 
E)  $20,000. 
A)  $35,000. 
B)  $30,000. 
C)  $25,000. 
D)  $12,500. 
E)  $20,000.

Question 5

Georgia, Inc. has collected the following data on one of its products. The direct materials price variance is: Direct materials standard (4 lbs. @ $1/lb.) $ 4 per finished unit
Total direct materials cost variance-unfavorable $ 13,750 Actual direct materials used 150,000 lbs.
Actual finished units produced 30,000  units

Accepted Answer

A)  $16,250 unfavorable. 
B)  $16,250 favorable. 
C)  $30,000 unfavorable. 
D)  $33,000 favorable. 
E)  $13,750 unfavorable. 
A)  $16,250 unfavorable. 
B)  $16,250 favorable. 
C)  $30,000 unfavorable. 
D)  $33,000 favorable. 
E)  $13,750 unfavorable.

Question 6

A company provided the following direct materials cost information. Compute the direct materials price variance. $\text {Standard costs assigned:}$
$\begin{array}{llr}
  \text {Direct materials standard cost $ (405,000 $ units @\$2.00/unit)  } & \$ 810,000\
 \text {  Actual costs:} &\
 \text {Direct Materials costs incurred ( 403,750 units
@\$2.20/unit)  } &\$ 888,250 
\end{array}$

Accepted Answer

A)  $81,000 Unfavorable. 
B)  $80,750 Favorable. 
C)  $78,250 Favorable. 
D)  $80,750 Unfavorable. 
E)  $81,000 Favorable. 
A)  $81,000 Unfavorable. 
B)  $80,750 Favorable. 
C)  $78,250 Favorable. 
D)  $80,750 Unfavorable. 
E)  $81,000 Favorable.

Question 7

What are some causes of direct labor rate and efficiency variances?

Accepted Answer

The use of workers with different skill

Question 8

The following information comes from the records of Magno Co. for the current period.
a. Compute the overhead controllable and volume variances. In each case, state whether the variance is favorable or unfavorable.
b. Prepare the journal entries to charge overhead costs to work in process and the overhead variances to their proper accounts.
$\begin{array}{ll}
\text { Actual costs and quantities: }\
 \text { Direct materials used} & 38,000 \text { feet @ } \$ 6.20 \text { per foot } \
 \text { Direct labor hours used } & 50,660 \text { hours } \
 \text { Direct labor rate per hour } & \$ 16 \
\text { Factory overhead } & \$ 211,600 \
25,000 \text { units were produced during the period. }
\end{array}$

$\text { Standard costs and quantities per unit: }$
$\begin{array}{llr}
  \text { Direct materials } &\text {1.5 ft. @ \$6.10 per ft.}\
 \text {Direct labor  } &\text {2 hours@\$17per hour}\
\end{array}$

Factory overhead (based on budgeted production of 24,500 units) 
Variable overhead $ \$ 2.25 $ /direct labor hour 
Fixed overhead $ \$ 1.95 / $ direct labor hour

Accepted Answer

None

Question 9

Claymore Corp. has the following information about its standards and production activity for September. The volume variance is: $\begin{array}{lll}
  \text { Actual total factory overhead incured } &\$28,175\
 \text {Standard factory overhead:  } &\
 \text {  Variable overhead } &\$3.10&\text { per unit produced }\
 \text { Fixed overhead } &\
 \text { $ \$ 12,000 / 6,000 $ estimated units to be produced } &\$2&\text {per unit}\
 \text {  Actual units produced } &4,800&\text { units}\
\end{array}$

Accepted Answer

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

Question 10

While companies strive to achieve ideal standards, reality implies that some loss of materials usually occurs with any process.

Accepted Answer

A) True 
 B)False

Question 11

A flexible budget performance report compares the differences between:

Accepted Answer

A)  Budgeted performance over several periods. 
B)  Actual performance over several periods. 
C)  Actual performance and standard costs at the budgeted sales volume. 
D)  Actual performance and budgeted performance based on actual sales volume. 
E)  Actual performance and budgeted performance based on budgeted sales volume. 
A)  Budgeted performance over several periods. 
B)  Actual performance over several periods. 
C)  Actual performance and standard costs at the budgeted sales volume. 
D)  Actual performance and budgeted performance based on actual sales volume. 
E)  Actual performance and budgeted performance based on budgeted sales volume.

Question 12

The following company information is available. The direct materials quantity variance is: Direct materials used for production 36,000 gallons
Standard quantity for units produced 34,400 gallons Standard cost per gallon of direct material $ 6.00
Actual cost per gallon of direct material $ 6.10

Accepted Answer

A)  $13,200 favorable. 
B)  $10,000 unfavorable. 
C)  $10,000 favorable. 
D)  $13,200 unfavorable. 
E)  $9,600 unfavorable. 
A)  $13,200 favorable. 
B)  $10,000 unfavorable. 
C)  $10,000 favorable. 
D)  $13,200 unfavorable. 
E)  $9,600 unfavorable.

Question 13

Gala Enterprises reports the following information regarding the production on one of its products for the month. Compute the direct labor cost variance, the direct labor rate variance, the direct labor efficiency variance and identify each as either favorable or unfavorable.
$\begin{array} { l l } 
\text { Direct labor standard (2 hrs. @ } \$ 15 / \mathrm { hr } . ) & \$ 30 \text { per finished unit } \
\text { Actual direct labor hours } & 60,800 \mathrm { hrs } . \
\text { Actual finished units produced } & 30,000 \text { units } \
\text { Actual cost of direct labor } & \$ 905,920
\end{array}$

Accepted Answer

Direct labor cost variance:
Actual units

Question 14

A ______________contains relevant information that compares actual results to planned activities.

Accepted Answer

The answer of A ______________contains relevant information that compares actual...

Question 15

Regarding overhead costs, as volume increases:

Accepted Answer

A)  Total variable cost decreases, total fixed cost remains constant. 
B)  Both total fixed cost and total variable cost increase. 
C)  Total fixed cost increases, total variable cost remains constant. 
D)  Total fixed cost remains constant, total variable cost increases. 
E)  Both total fixed cost and total variable cost remain constant. 
A)  Total variable cost decreases, total fixed cost remains constant. 
B)  Both total fixed cost and total variable cost increase. 
C)  Total fixed cost increases, total variable cost remains constant. 
D)  Total fixed cost remains constant, total variable cost increases. 
E)  Both total fixed cost and total variable cost remain constant.

Question 16

Briefly describe the procedure of management by exception.

Accepted Answer

Management by exception is an analytical

Question 17

What are sales variances? How are they used?

Accepted Answer

Sales variances reflect differences in p

Question 18

What are the four steps in the effective management of variance analysis?

Accepted Answer

The four steps are: (1) prepar

Question 19

A flexible budget is also called a ________ budget.

Accepted Answer

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

Question 20

Job #411 was budgeted to require 3.5 hours of labor at $11.00 per hour. However, it was completed in 3 hours by a person who worked for $14.00 per hour. What is the total labor cost variance for Job #4115?

Accepted Answer

None

Exam 23: Flexible Budgets and Standard Costs

Identify and explain the primary differences between fixed and flexible budgets.

________ are preset costs for delivering a product or service under normal conditions.

Product A has a sales price of $10 per unit. Based on a 10,000-unit production level, the variable costs are $6 per unit and the fixed costs are $3 per unit. Using a flexible budget for 12,500 units, what is the budgeted operating income from Product A?

What are some causes of direct labor rate and efficiency variances?

While companies strive to achieve ideal standards, reality implies that some loss of materials usually occurs with any process.

A flexible budget performance report compares the differences between:

The following company information is available. The direct materials quantity variance is: Direct materials used for production 36,000 gallons Standard quantity for units produced 34,400 gallons Standard cost per gallon of direct material $ 6.00 Actual cost per gallon of direct material $ 6.10

A ______________contains relevant information that compares actual results to planned activities.

Regarding overhead costs, as volume increases:

Briefly describe the procedure of management by exception.

What are sales variances? How are they used?

What are the four steps in the effective management of variance analysis?

A flexible budget is also called a ________ budget.

Job #411 was budgeted to require 3.5 hours of labor at $11.00 per hour. However, it was completed in 3 hours by a person who worked for $14.00 per hour. What is the total labor cost variance for Job #4115?

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments

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

Present and Future Values in Accounting

Activity-Based Costing

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