Question 1

A planning budget is prepared before the period begins and is valid for whatever the actual level of activity turns out to be.

Accepted Answer

A) True 
 B)False

Question 2

Juenemann 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 December,the kennel budgeted for 3,800 tenant-days,but its actual level of activity was 3,770 tenant-days.The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for December: Data used in budgeting:   Actual results for December:   The facility expenses in the flexible budget for December would be closest to:

Accepted Answer

A) $24,080 
B) $22,858 
C) $23,223 
D) $24,200 
A) $24,080 
B) $22,858 
C) $23,223 
D) $24,200

Question 3

Cruea 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 November,the school budgeted for 1,410 students and 138 courses.The actual activity for the month was 1,810 students and 139 courses.
Required:
Prepare the school's planning budget for November.

Accepted Answer

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

Question 4

Hairston 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 7,700 units,but its actual level of activity was 7,720 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 selling and administrative expenses in the planning budget for November would be closest to:

Accepted Answer

A) $22,144 
B) $21,104 
C) $22,140 
D) $21,049 
A) $22,144 
B) $21,104 
C) $22,140 
D) $21,049

Question 5

The following labor standards have been established for a particular product:   The following data pertain to operations concerning the product for the last month:   What is the labor efficiency variance for the month?

Accepted Answer

A) $19,017 F 
B) $19,017 U 
C) $16,029 F 
D) $16,577 F 
A) $19,017 F 
B) $19,017 U 
C) $16,029 F 
D) $16,577 F

Question 6

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 7

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 supplies costs in the performance report for the month is:

Accepted Answer

A) $120 F 
B) $860 U 
C) $860 F 
D) $120 U 
A) $120 F 
B) $860 U 
C) $860 F 
D) $120 U

Question 8

Degregorio Corporation makes a product that uses a material with the following direct material standards:   The company produced 5,600 units in November using 21,750 kilos of the material.During the month,the company purchased 24,800 kilos of the direct material at a total cost of $168,640.The direct materials purchases variance is computed when the materials are purchased. The materials quantity variance for November is:

Accepted Answer

A) $3,290 F 
B) $3,196 F 
C) $3,290 U 
D) $3,196 U 
A) $3,290 F 
B) $3,196 F 
C) $3,290 U 
D) $3,196 U

Question 9

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 10

Diemert Corporation bases its budgets on machine-hours.The company's static planning budget for June appears below:   Actual results for the month were:   The spending variance for equipment depreciation in the 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 11

Sperazza Corporation produces large commercial doors for warehouses and other facilities.In the most recent month,the company budgeted production of 4,900 doors.Actual production was 5,300 doors.According to standards,each door requires 6.4 machine-hours.The actual machine-hours for the month were 34,340 machine-hours.The standard supplies cost is $3.10 per machine-hour.The actual supplies cost for the month was $99,331.Supplies cost is an element of variable manufacturing overhead.The variable overhead efficiency variance for supplies cost is:

Accepted Answer

A) $5,821 F 
B) $5,821 U 
C) $1,302 U 
D) $1,302 F 
A) $5,821 F 
B) $5,821 U 
C) $1,302 U 
D) $1,302 F

Question 12

Loggin Midwifery's cost formula for its wages and salaries is $2,380 per month plus $231 per birth.For the month of April,the company planned for activity of 100 births,but the actual level of activity was 102 births.The actual wages and salaries for the month was $25,510.The spending variance for wages and salaries in April would be closest to:

Accepted Answer

A) $30 F 
B) $432 U 
C) $30 U 
D) $432 F 
A) $30 F 
B) $432 U 
C) $30 U 
D) $432 F

Question 13

Galla Corporation makes a product with the following standard costs:   The company budgeted for production of 2,400 units in June,but actual production was 2,500 units.The company used 19,850 pounds of direct material and 980 direct labor-hours to produce this output.The company purchased 21,700 pounds of the direct material at $6.70 per pound.The actual direct labor rate was $19.20 per hour and the actual variable overhead rate was $1.80 per hour. 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 materials price variance for June is:

Accepted Answer

A) $6,150 F 
B) $6,150 U 
C) $6,510 F 
D) $6,510 U 
A) $6,150 F 
B) $6,150 U 
C) $6,510 F 
D) $6,510 U

Question 14

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

Accepted Answer

A) $4,853 
B) $4,920 
C) $4,720 
D) $4,730 
A) $4,853 
B) $4,920 
C) $4,720 
D) $4,730

Question 15

Lehnertz 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 7,100 units,but its actual level of activity was 7,150 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 manufacturing overhead in the flexible budget for February would be closest to:

Accepted Answer

A) $43,323 
B) $42,520 
C) $42,580 
D) $42,719 
A) $43,323 
B) $42,520 
C) $42,580 
D) $42,719

Question 16

Graybeal Corporation makes a product with the following standard costs:   The company reported the following results concerning this product in March.   The materials price variance is recognized when materials are purchased.Variable overhead is applied on the basis of direct labor-hours.
Required:
a.Compute the materials quantity variance.
b.Compute the materials price variance.
c.Compute the labor efficiency variance.
d.Compute the labor rate variance.
e.Compute the variable overhead efficiency variance.
f.Compute the variable overhead rate variance.

Accepted Answer

a.SQ = 3,500 units × 4.3 ounces per unit

Question 17

The following data have been provided by Mathews Corporation:   Lubricants and supplies are both elements of variable manufacturing overhead. The variable overhead rate variance for supplies is closest to:

Accepted Answer

A) $430 U 
B) $736 F 
C) $306 U 
D) $736 U 
A) $430 U 
B) $736 F 
C) $306 U 
D) $736 U

Question 18

Shawl Corporation's variable overhead is applied on the basis of direct labor-hours.The standard cost card for product F02E specifies 5.5 direct labor-hours per unit of F02E.The standard variable overhead rate is $6.80 per direct labor-hour.During the most recent month,1,560 units of product F02E were made and 8,700 direct labor-hours were worked.
The actual variable overhead incurred was $52,635.
Required:
a.What was the variable overhead rate variance for the month?
b.What was the variable overhead efficiency variance for the month?

Accepted Answer

a.Variable overhead rate variance = (AH

Question 19

Stewart Corporation makes a product with the following standard costs:   The company reported the following results concerning this product in August.   The company applies variable overhead on the basis of direct labor-hours.The direct materials purchases variance is computed when the materials are purchased.
Required:
a.Compute the materials quantity variance.
b.Compute the materials price variance.
c.Compute the labor efficiency variance.
d.Compute the labor rate variance.
e.Compute the variable overhead efficiency variance.
f.Compute the variable overhead rate variance.

Accepted Answer

a.SQ = 3,100 units × 9.3 pounds per unit

Question 20

Biery Corporation makes a product with the following standard costs:   The company produced 4,100 units in April using 5,380 liters of direct material and 2,610 direct labor-hours.During the month,the company purchased 6,000 liters of the direct material at $5.80 per liter.The actual direct labor rate was $19.80 per hour and the actual variable overhead rate was $2.90 per hour. 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 labor efficiency variance for April is:

Accepted Answer

A) $2,850 F 
B) $2,850 U 
C) $2,970 F 
D) $2,970 U 
A) $2,850 F 
B) $2,850 U 
C) $2,970 F 
D) $2,970 U

A planning budget is prepared before the period begins and is valid for whatever the actual level of activity turns out to be.

The following labor standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: What is the labor efficiency variance for the month?

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 supplies costs in the performance report for the month is:

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

The following data have been provided by Mathews Corporation: Lubricants and supplies are both elements of variable manufacturing overhead. The variable overhead rate variance for supplies is closest to:

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

A planning budget is prepared before the period begins and is valid for whatever the actual level of activity turns out to be.

The following labor standards have been established for a particular product: The following data pertain to operations concerning the product for the last month: What is the labor efficiency variance for the month?

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 supplies costs in the performance report for the month is:

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

The following data have been provided by Mathews Corporation: Lubricants and supplies are both elements of variable manufacturing overhead. The variable overhead rate variance for supplies is closest to:

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