Question 1

Comparing a static planning budget to actual costs is a good way to assess whether variable costs are under control.

Accepted Answer

A) True 
 B)False

Question 2

Stitt Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During November, the company budgeted for 5, 900 units, but its actual level of activity was 5, 880 units.The company has provided the following data concerning the formulas used in its budgeting and its actual results for November: Data used in budgeting:   Actual results for November:   The activity variance for selling and administrative expenses in November would be closest to:

Accepted Answer

A) $516 U 
B) $16 F 
C) $516 F 
D) $16 U 
A) $516 U 
B) $16 F 
C) $516 F 
D) $16 U

Question 3

Shelby Boat Wash's cost formula for its cleaning equipment and supplies is $2, 200 per month plus $34 per boat.For the month of September, the company planned for activity of 82 boats, but the actual level of activity was 32 boats.The actual cleaning equipment and supplies for the month was $3, 340. The activity variance for cleaning equipment and supplies in September would be closest to:

Accepted Answer

A) $1, 648 F 
B) $1, 700 F 
C) $1, 700 U 
D) $1, 648 U 
A) $1, 648 F 
B) $1, 700 F 
C) $1, 700 U 
D) $1, 648 U

Question 4

Fixed costs should be included in a flexible budget even though they do not change when the level of activity changes.

Accepted Answer

A) True 
 B)False

Question 5

Federick Clinic uses client-visits as its measure of activity.During October, the clinic budgeted for 3, 000 client-visits, but its actual level of activity was 3, 040 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for October: Data used in budgeting:   Actual results for October:   The activity variance for administrative expenses in October would be closest to:

Accepted Answer

A) $152 U 
B) $152 F 
C) $8 U 
D) $8 F 
A) $152 U 
B) $152 F 
C) $8 U 
D) $8 F

Question 6

Labombard Clinic uses client-visits as its measure of activity.During February, the clinic budgeted for 3, 600 client-visits, but its actual level of activity was 3, 650 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting:   Actual results for February:   The net operating income in the planning budget for February would be closest to:

Accepted Answer

A) $7, 382 
B) $7, 800 
C) $8, 425 
D) $7, 589 
A) $7, 382 
B) $7, 800 
C) $8, 425 
D) $7, 589

Question 7

A spending variance is the difference between the cost in the static planning budget and the actual amount of the cost for the period.

Accepted Answer

A) True 
 B)False

Question 8

Bobe Air uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports.The cost formula for plane operating costs is $44, 580 per month plus $2, 390 per flight plus $8 per passenger.The company expected its activity in May to be 68 flights and 211 passengers, but the actual activity was 71 flights and 210 passengers.The actual cost for plane operating costs in May was $215, 140. The spending variance for plane operating costs in May would be closest to:

Accepted Answer

A) $810 U 
B) $6, 352 U 
C) $810 F 
D) $6, 352 F 
A) $810 U 
B) $6, 352 U 
C) $810 F 
D) $6, 352 F

Question 9

Spirer Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During September, the company budgeted for 6, 700 units, but its actual level of activity was 6, 750 units.The company has provided the following data concerning the formulas used in its budgeting and its actual results for September: Data used in budgeting:   Actual results for September:   The activity variance for net operating income in September would be closest to:

Accepted Answer

A) $1, 515 U 
B) $1, 515 F 
C) $605 F 
D) $605 U 
A) $1, 515 U 
B) $1, 515 F 
C) $605 F 
D) $605 U

Question 10

Nicolaysen Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During February, the company budgeted for 5, 700 units, but its actual level of activity was 5, 690 units.The company has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting:   Actual results for February:   The direct labor in the planning budget for February would be closest to:

Accepted Answer

A) $21, 093 
B) $21, 090 
C) $21, 130 
D) $21, 053 
A) $21, 093 
B) $21, 090 
C) $21, 130 
D) $21, 053

Question 11

Letts Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During January, the company budgeted for 7, 000 units, but its actual level of activity was 6, 970 units.The company has provided the following data concerning the formulas to be used in its budgeting:   The net operating income in the planning budget for January would be closest to:

Accepted Answer

A) $20, 292 
B) $12, 988 
C) $20, 700 
D) $12, 877 
A) $20, 292 
B) $12, 988 
C) $20, 700 
D) $12, 877

Question 12

Nicolini Kennel uses tenant-days as its measure of activity;an animal housed in the kennel for one day is counted as one tenant-day.During October, the kennel budgeted for 2, 200 tenant-days, but its actual level of activity was 2, 250 tenant-days.The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for October: Data used in budgeting:   Actual results for October:   The activity variance for wages and salaries in October would be closest to:

Accepted Answer

A) $580 F 
B) $370 F 
C) $370 U 
D) $580 U 
A) $580 F 
B) $370 F 
C) $370 U 
D) $580 U

Question 13

Seekell Memorial Diner is a charity supported by donations that provides free meals to the homeless.The diner's budget for October was based on 2, 500 meals, but the diner actually served 2, 900 meals.The diner's director has provided the following cost formulas to use in budgets:   Required:
Prepare the diner's flexible budget for the actual number of meals served in October.The budget will only contain the costs listed above;no revenues will be on the budget.

Accepted Answer

The answer of Seekell Memorial Diner is a charity supported...

Question 14

Tabeling Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During August, the company budgeted for 6, 500 units, but its actual level of activity was 6, 540 units.The company has provided the following data concerning the formulas used in its budgeting and its actual results for August: Data used in budgeting:   Actual results for August:   The net operating income in the planning budget for August would be closest to:

Accepted Answer

A) $21, 300 
B) $21, 908 
C) $11, 005 
D) $10, 871 
A) $21, 300 
B) $21, 908 
C) $11, 005 
D) $10, 871

Question 15

Spirer Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During September, the company budgeted for 6, 700 units, but its actual level of activity was 6, 750 units.The company has provided the following data concerning the formulas used in its budgeting and its actual results for September: Data used in budgeting:   Actual results for September:   The activity variance for selling and administrative expenses in September would be closest to:

Accepted Answer

A) $30 F 
B) $800 U 
C) $30 U 
D) $800 F 
A) $30 F 
B) $800 U 
C) $30 U 
D) $800 F

Question 16

Illescas Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During December, the company budgeted for 6, 400 units, but its actual level of activity was 6, 440 units.The company has provided the following data concerning the formulas to be used in its budgeting:   The direct labor in the planning budget for December would be closest to:

Accepted Answer

A) $40, 412 
B) $40, 572 
C) $40, 161 
D) $40, 320 
A) $40, 412 
B) $40, 572 
C) $40, 161 
D) $40, 320

Question 17

Peixoto Framing's cost formula for its supplies cost is $1, 150 per month plus $14 per frame.For the month of July, the company planned for activity of 556 frames, but the actual level of activity was 555 frames.The actual supplies cost for the month was $9, 190.The supplies cost in the planning budget for July would be closest to:

Accepted Answer

A) $8, 920 
B) $9, 207 
C) $8, 934 
D) $9, 190 
A) $8, 920 
B) $9, 207 
C) $8, 934 
D) $9, 190

Question 18

Diemert Corporation bases its budgets on machine-hours.The company's static planning budget for June appears below:   Actual results for the month were:   Actual results for the month were: The spending variance for equipment depreciation in the flexible budget performance report for the month should be:

Accepted Answer

A) $4, 250 U 
B) $620 F 
C) $4, 250 F 
D) $620 U 
A) $4, 250 U 
B) $620 F 
C) $4, 250 F 
D) $620 U

Question 19

A revenue variance is favorable if the actual revenue exceeds what the revenue should have been for the actual level of activity of the period.

Accepted Answer

A) True 
 B)False

Question 20

Ohme Framing's cost formula for its supplies cost is $1, 620 per month plus $13 per frame.For the month of April, the company planned for activity of 882 frames, but the actual level of activity was 878 frames.The actual supplies cost for the month was $13, 500.The supplies cost in the flexible budget for April would be closest to:

Accepted Answer

A) $13, 086 
B) $13, 500 
C) $13, 034 
D) $13, 027 
A) $13, 086 
B) $13, 500 
C) $13, 034 
D) $13, 027

Comparing a static planning budget to actual costs is a good way to assess whether variable costs are under control.

Fixed costs should be included in a flexible budget even though they do not change when the level of activity changes.

A spending variance is the difference between the cost in the static planning budget and the actual amount of the cost for the period.

A revenue variance is favorable if the actual revenue exceeds what the revenue should have been for the actual level of activity of the period.

Managerial Accounting and Cost Concepts

Cost-Volume-Profit Relationships

Job-Order Costing

Variable Costing and Segment Reporting: Tools for Management

Activity-Based-Costing: a Tool to Aid Decision Making

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

Profit Planning

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Pricing Products and Services

Profitability Analysis

Least Squares Regression Computations

Activity-Based Absorption Costing

the Predetermined Overhead Rate and Capacity

Super-Variable Costing

Abc Action Analysis

the Concept of Present Value

Income Taxes and the Net Present Value Method

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Transfer Pricing

Service Department Charges

Filters

Exam 9: Flexible Budgets and Performance Analysis

Comparing a static planning budget to actual costs is a good way to assess whether variable costs are under control.

Fixed costs should be included in a flexible budget even though they do not change when the level of activity changes.

A spending variance is the difference between the cost in the static planning budget and the actual amount of the cost for the period.

A revenue variance is favorable if the actual revenue exceeds what the revenue should have been for the actual level of activity of the period.

Managerial Accounting and Cost Concepts

Cost-Volume-Profit Relationships

Job-Order Costing

Variable Costing and Segment Reporting: Tools for Management

Activity-Based-Costing: a Tool to Aid Decision Making

Differential Analysis: the Key to Decision Making

Capital Budgeting Decisions

Profit Planning

Standard Costs and Variances

Performance Measurement in Decentralized Organizations

Pricing Products and Services

Profitability Analysis

Least Squares Regression Computations

Activity-Based Absorption Costing

the Predetermined Overhead Rate and Capacity

Super-Variable Costing

Abc Action Analysis

the Concept of Present Value

Income Taxes and the Net Present Value Method

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Transfer Pricing

Service Department Charges

Filters