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

Jan's Boxes manufactures corrugated boxes.The standard materials allowed for each box is 0.3 kilograms of paper,which has a standard cost of $4.50 per kilogram.During April 6,300 kilograms were used to manufacture 18,000 boxes.The actual materials cost was $4.55 per kilogram. Required: a.Determine the materials rate variance. b.Determine the materials efficiency variance.

Answer the following question(s)using the information below. Apple Valley Orchards,Inc.(AVO),developed standard costs for direct material and direct labour.In 2016,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 2017,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

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

Use the information below to answer the following question(s). Bates 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?

The use of high-quality raw materials is likely to result in a favourable efficiency variance and an unfavourable rate variance.

An unfavourable direct materials mix variance results when cheaper direct materials are substituted for more expensive direct materials.

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

If variance analysis is used for performance evaluation,managers are encouraged to meet targets using creativity and resourcefulness.

The relative amount of inputs used to reach a given level output is a measure of which of the following?

A standard cost method is based on

Use the information below to answer the following question(s). Ames Golf Company used the following data to evaluate their current operating system.The company sells 1 pack of golf balls for $10 per pack.The $10 selling price is also the budgeted selling price. -What is the total static budget variance for Ames Golf Company?

Use the information below to answer the following question(s). Robb Industries Inc.(RII),developed standard costs for direct material and direct labour.In 2016,RII estimated the following standard costs for one of their major products,the 10-litre plastic container. During June 2017,RII produced and sold 5,000 containers using 490 kilograms of direct materials at an average actual cost per kilogram of $32 and 250 direct manufacturing labour-hours at an average actual wage of $15.25 per hour. -June's direct manufacturing labour efficiency variance is

Management by exception is the practice of focusing management attention on areas where performance meets expectations.

The type of budget that is based on one level of output,without adjustment for any operational or financial changes is called

A company uses a static budget approach and the previous management accountant calculated the following information: Fixed costs variance $10,000 U;revenues variance $400,000 F;contribution margin variance $60,000 F.What is the total static-budget variance?

An unfavourable variance is conclusive evidence of poor performance.

Answer the following question(s)using the information below. Apple Valley Orchards,Inc.(AVO),developed standard costs for direct material and direct labour.In 2016,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 2017,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 flexible-budget variance is

Delila Equipment Ltd.is a company that manufactures an abdominal exerciser called The Tummy Toner.The following information is for three of the company's activities in 2015: Required: a.Calculate the flexible-budget variance for each activity in 2015. b.Calculate the price and efficiency variances for each activity in 2015.

Answer the following question(s)using the information below. Apple Valley Orchards,Inc.(AVO),developed standard costs for direct material and direct labour.In 2016,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 2017,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 efficiency variance is

Variances and flexible budgets help managers gain insights into why actual results differ from planned performance.