Question 1

The standard labor rate per hour defines the company's expected direct labor wage rate per hour,including employment taxes and fringe benefits.

Accepted Answer

A) True 
 B)False

Question 2

The standard price per unit for direct materials should not include the cost of delivering the materials.

Accepted Answer

A) True 
 B)False

Question 3

Sonner Tech is a for-profit vocational school.The school bases its budgets on two measures of activity (i.e. ,cost drivers),namely student and course.The school uses the following data in its budgeting:   In September,the school budgeted for 1,760 students and 156 courses.The actual activity for the month was 1,560 students and 153 courses.
Required:
Prepare the school's flexible budget for the actual level of activity in September.

Accepted Answer

The answer of Sonner Tech is a for-profit vocational school.The...

Question 4

Perla 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 March,the kennel budgeted for 2,200 tenant-days,but its actual level of activity was 2,160 tenant-days.The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting:   Actual results for March:   The revenue variance for March would be closest to:

Accepted Answer

A) $420 F 
B) $1,724 F 
C) $420 U 
D) $1,724 U 
A) $420 F 
B) $1,724 F 
C) $420 U 
D) $1,724 U

Question 5

Hatzenbuhler Manufacturing Corporation has prepared the following overhead budget for next month.   The company's variable overhead costs are driven by machine-hours. What would be the total budgeted overhead cost for next month if the activity level is 6,600 machine-hours rather than 6,800 machine-hours?

Accepted Answer

A) $107,824.00 
B) $110,600.00 
C) $108,300.00 
D) $107,347.06 
A) $107,824.00 
B) $110,600.00 
C) $108,300.00 
D) $107,347.06

Question 6

Toadvine Clinic uses patient-visits as its measure of activity.During April,the clinic budgeted for 3,800 patient-visits,but its actual level of activity was 3,400 patient-visits.The clinic uses the following revenue and cost formulas in its budgeting,where q is the number of patient-visits:
Revenue: $39.70q
Personnel expenses: $38,700 + $11.50q
Medical supplies: $1,000 + $7.30q
Occupancy expenses: $11,700 + $1.30q
Administrative expenses: $6,700 + $0.30q
The clinic reported the following actual results for April:   Required:
Prepare a report showing the clinic's revenue and spending variances for April.Label each variance as favorable (F)or unfavorable (U).

Accepted Answer

The answer of Toadvine Clinic uses patient-visits as its measure...

Question 7

Chirico Clinic uses client-visits as its measure of activity.During February,the clinic budgeted for 2,500 client-visits,but its actual level of activity was 2,550 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 personnel expenses in the planning budget for February would be closest to:

Accepted Answer

A) $68,642 
B) $70,015 
C) $69,125 
D) $68,350 
A) $68,642 
B) $70,015 
C) $69,125 
D) $68,350

Question 8

Lartey Corporation's cost formula for its selling and administrative expense is $22,200 per month plus $27 per unit.For the month of December,the company planned for activity of 5,300 units,but the actual level of activity was 5,270 units.The actual selling and administrative expense for the month was $168,150. The selling and administrative expense in the planning budget for December would be closest to:

Accepted Answer

A) $169,107 
B) $165,300 
C) $168,150 
D) $164,490 
A) $169,107 
B) $165,300 
C) $168,150 
D) $164,490

Question 9

Ortman Corporation makes a product with the following standard costs:   The company reported the following results concerning this product in May.   The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased. The variable overhead efficiency variance for May is:

Accepted Answer

A) $27 F 
B) $27 U 
C) $30 U 
D) $30 F 
A) $27 F 
B) $27 U 
C) $30 U 
D) $30 F

Question 10

Epley Corporation makes a product with the following standard costs:   In July the company produced 3,300 units using 12,240 pounds of the direct material and 2,760 direct labor-hours.During the month,the company purchased 13,000 pounds of the direct material at a cost of $35,100.The actual direct labor cost was $51,612 and the actual variable overhead cost was $20,148. The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased.
The variable overhead rate variance for July is:

Accepted Answer

A) $1,932 U 
B) $1,932 F 
C) $1,848 U 
D) $1,848 F 
A) $1,932 U 
B) $1,932 F 
C) $1,848 U 
D) $1,848 F

Question 11

Gilson Corporation manufactures and sells a single product.The company uses units as the measure of activity in its budgets and performance reports.During April,the company budgeted for 5,100 units,but its actual level of activity was 5,060 units.The company has provided the following data concerning the formulas used in its budgeting and its actual results for April: Data used in budgeting:   Actual results for April:   The overall revenue and spending variance (i.e. ,the variance for net operating income in the revenue and spending variance column on the revenue and spending variances report)for April would be closest to:

Accepted Answer

A) $2,538 F 
B) $2,538 U 
C) $1,910 F 
D) $1,910 U 
A) $2,538 F 
B) $2,538 U 
C) $1,910 F 
D) $1,910 U

Question 12

Epley Corporation makes a product with the following standard costs:   In July the company produced 3,300 units using 12,240 pounds of the direct material and 2,760 direct labor-hours.During the month,the company purchased 13,000 pounds of the direct material at a cost of $35,100.The actual direct labor cost was $51,612 and the actual variable overhead cost was $20,148. The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased.
The variable overhead efficiency variance for July is:

Accepted Answer

A) $960 F 
B) $960 U 
C) $876 F 
D) $876 U 
A) $960 F 
B) $960 U 
C) $876 F 
D) $876 U

Question 13

Holiday Chemical Corporation uses a standard cost system to collect costs related to the production of its "bowling ball" fruitcakes.The direct labor standard for each fruitcake is 1.25 hours at a standard cost of $11.00 per hour.During the month of November,Holiday's fruitcake production used 9,820 direct labor-hours at a total direct labor cost of $106,547.This resulted in production of 8,500 fruitcakes for November. What is Holiday's labor rate variance for November?

Accepted Answer

A) $8,855 Favorable 
B) $1,473 Favorable 
C) $13,047 Unfavorable 
D) $14,520 Unfavorable 
A) $8,855 Favorable 
B) $1,473 Favorable 
C) $13,047 Unfavorable 
D) $14,520 Unfavorable

Question 14

A favorable materials quantity variance occurs when the actual quantity used in production is less than the standard quantity allowed for the actual output of the period.

Accepted Answer

A) True 
 B)False

Question 15

Zenon 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 July,the kennel budgeted for 3,300 tenant-days,but its actual level of activity was 3,260 tenant-days.The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for July: Data used in budgeting:   Actual results for July:   The net operating income in the flexible budget for July would be closest to:

Accepted Answer

A) $9,700 
B) $6,599 
C) $6,762 
D) $9,340 
A) $9,700 
B) $6,599 
C) $6,762 
D) $9,340

Question 16

Smithj 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 February,the kennel budgeted for 3,500 tenant-days,but its actual level of activity was 3,490 tenant-days.The kennel 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 revenue variance for February would be closest to:

Accepted Answer

A) $640 F 
B) $918 F 
C) $640 U 
D) $918 U 
A) $640 F 
B) $918 F 
C) $640 U 
D) $918 U

Question 17

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 selling and administrative expenses in the planning budget for February would be closest to:

Accepted Answer

A) $29,787 
B) $28,507 
C) $29,839 
D) $28,510 
A) $29,787 
B) $28,507 
C) $29,839 
D) $28,510

Question 18

Biggs Enterprise's flexible budget cost formula for indirect materials,a variable cost,is $0.60 per unit of output.If the company's performance report for last month shows a $200 favorable spending variance for indirect materials and if 9,000 units of output were produced last month,then the actual costs incurred for indirect materials for the month must have been:

Accepted Answer

A) $5,600 
B) $5,400 
C) $6,000 
D) $5,200 
A) $5,600 
B) $5,400 
C) $6,000 
D) $5,200

Question 19

Privett Hospital bases its budgets on patient-visits.The hospital's static planning budget for November appears below:   Actual results for the month were:   The spending variance for laundry costs in the performance report for the month is:

Accepted Answer

A) $480 F 
B) $480 U 
C) $500 F 
D) $500 U 
A) $480 F 
B) $480 U 
C) $500 F 
D) $500 U

Question 20

Wales 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 February,the kennel budgeted for 2,700 tenant-days,but its actual level of activity was 2,730 tenant-days.The kennel has provided the following data concerning the formulas to be used in its budgeting:   The food and supplies in the flexible budget for February would be closest to:

Accepted Answer

A) $31,017 
B) $30,339 
C) $31,476 
D) $31,140 
A) $31,017 
B) $30,339 
C) $31,476 
D) $31,140

The standard labor rate per hour defines the company's expected direct labor wage rate per hour,including employment taxes and fringe benefits.

The standard price per unit for direct materials should not include the cost of delivering the materials.

A favorable materials quantity variance occurs when the actual quantity used in production is less than the standard quantity allowed for the actual output of the period.

Privett Hospital bases its budgets on patient-visits.The hospital's static planning budget for November appears below: Actual results for the month were: The spending variance for laundry costs in the performance report for the month is:

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Production Costs

Job-Order Costing: Cost Flows and External Reporting

Process Costing

Supplement: Process Costing Using the Fifo Method

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Activity-Based Costing: a Tool to Aid Decision Making

Flexible Budgets and Performance Analysis

Differential Analysis: The Key to Decision Making

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variance

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters

Exam 9: Master Budgeting

The standard labor rate per hour defines the company's expected direct labor wage rate per hour,including employment taxes and fringe benefits.

The standard price per unit for direct materials should not include the cost of delivering the materials.

A favorable materials quantity variance occurs when the actual quantity used in production is less than the standard quantity allowed for the actual output of the period.

Privett Hospital bases its budgets on patient-visits.The hospital's static planning budget for November appears below: Actual results for the month were: The spending variance for laundry costs in the performance report for the month is:

Managerial Accounting and Cost Concepts

Job-Order Costing: Calculating Unit Production Costs

Job-Order Costing: Cost Flows and External Reporting

Process Costing

Supplement: Process Costing Using the Fifo Method

Cost-Volume-Profit Relationships

Variable Costing and Segment Reporting: Tools for Management

Activity-Based Costing: a Tool to Aid Decision Making

Flexible Budgets and Performance Analysis

Differential Analysis: The Key to Decision Making

Performance Measurement in Decentralized Organizations

Differential Analysis: The Key to Decision Making

Capital Budgeting Decisions

Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

Journal Entries to Record Variance

The Concept of Present Value

The Direct Method of Determining the Net Cash Provided by Operating Activities

Filters