Question 1

Which department is often responsible for the direct materials price variance?

Accepted Answer

A)  The accounting department. 
B)  The production department. 
C)  The purchasing department. 
D)  The finance department. 
E)  The budgeting department. 
A)  The accounting department. 
B)  The production department. 
C)  The purchasing department. 
D)  The finance department. 
E)  The budgeting department.

Question 2

Static budget is another name for:

Accepted Answer

A)  Standard budget. 
B)  Flexible budget. 
C)  Variable budget. 
D)  Fixed budget. 
E)  Master budget. 
A)  Standard budget. 
B)  Flexible budget. 
C)  Variable budget. 
D)  Fixed budget. 
E)  Master budget.

Question 3

Sales variances allow managers to focus on sales mix as well as sales quantities.

Accepted Answer

A) True 
 B)False

Question 4

A fixed budget is also called a _____________ budget.

Accepted Answer

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

Question 5

An analytical technique used by management to focus on the most significant variances and give less attention to the areas where performance is satisfactory is known as:

Accepted Answer

A)  Controllable management. 
B)  Management by variance. 
C)  Performance management. 
D)  Management by objectives. 
E)  Management by exception. 
A)  Controllable management. 
B)  Management by variance. 
C)  Performance management. 
D)  Management by objectives. 
E)  Management by exception.

Question 6

Companies promoting continuous improvement strive to achieve practical standards rather than ideal standards.

Accepted Answer

A) True 
 B)False

Question 7

An unfavorable variance is recorded with a debit.

Accepted Answer

A) True 
 B)False

Question 8

A flexible budget is prepared:

Accepted Answer

A)  Before the operating period only. 
B)  After the operating period only. 
C)  During the operating period only. 
D)  At any time in the planning period. 
E)  A flexible budget should never be prepared. 
A)  Before the operating period only. 
B)  After the operating period only. 
C)  During the operating period only. 
D)  At any time in the planning period. 
E)  A flexible budget should never be prepared.

Question 9

Abrams, Inc., provides the following results of March's operations:   Required:(a) Determine the total overhead cost variance for March.
(b) Applying the management by exception approach, which of the variances shown are of greatest concern? Why?

Accepted Answer

The answer of Abrams, Inc., provides the following results of...

Question 10

For the current period, Boggs Company's manufacturing operations yield a $5,250 unfavorable price variance on its direct materials usage. The actual price per pound is $56.50 and the standard price per pound is $55.00. How many pounds of material are used in the current period?

Accepted Answer

A)  5,393. 
B)  5,110. 
C)  3,500. 
D)  3,750. 
E)  4,000. 
A)  5,393. 
B)  5,110. 
C)  3,500. 
D)  3,750. 
E)  4,000.

Question 11

Based on a predicted level of production and sales of 12,000 units, a company anticipates reporting operating income of $26,000 after deducting variable costs of $72,000 and fixed costs of $10,000. Based on this information, the budgeted amounts of fixed and variable costs for 15,000 units would be:

Accepted Answer

A)  $10,000 of fixed costs and $72,000 of variable costs. 
B)  $10,000 of fixed costs and $90,000 of variable costs. 
C)  $12,500 of fixed costs and $90,000 of variable costs. 
D)  $12,500 of fixed costs and $72,000 of variable costs. 
E)  $10,000 of fixed costs and $81,000 of variable costs. 
A)  $10,000 of fixed costs and $72,000 of variable costs. 
B)  $10,000 of fixed costs and $90,000 of variable costs. 
C)  $12,500 of fixed costs and $90,000 of variable costs. 
D)  $12,500 of fixed costs and $72,000 of variable costs. 
E)  $10,000 of fixed costs and $81,000 of variable costs.

Question 12

Whistler Company determined that in the production of their products last period; they had a favorable price variance and an unfavorable quantity variance for direct materials. What might be the cause of this pattern of variances?

Accepted Answer

The company's purchasing manager may hav

Question 13

Cabot Company collected the following data regarding production of one of its products. Compute the variable overhead efficiency variance.

Accepted Answer

A)  $14,300 favorable. 
B)  $18,000 favorable. 
C)  $18,000 unfavorable. 
D)  $18,300 unfavorable. 
E)  $14,300 unfavorablE.AH x SVR = (81,000 x $14.30) = $1,158,300 
A)  $14,300 favorable. 
B)  $18,000 favorable. 
C)  $18,000 unfavorable. 
D)  $18,300 unfavorable. 
E)  $14,300 unfavorablE.AH x SVR = (81,000 x $14.30) = $1,158,300

Question 14

Brewer Company specializes in selling used cars. During the month, the dealership sold 22 cars at an average price of $15,000 each. The budget for the month was to sell 20 cars at an average price of $16,000. Compute the dealership's sales price variance for the month.

Accepted Answer

A)  $22,000 unfavorable. 
B)  $10,000 favorable. 
C)  $22,000 favorable. 
D)  $32,000 unfavorable. 
E)  $32,000 favorablE.Actual = 22 x $15,000 = $330,000 
A)  $22,000 unfavorable. 
B)  $10,000 favorable. 
C)  $22,000 favorable. 
D)  $32,000 unfavorable. 
E)  $32,000 favorablE.Actual = 22 x $15,000 = $330,000

Question 15

Variable budget is another name for:

Accepted Answer

A)  Cash budget. 
B)  Flexible budget. 
C)  Fixed budget. 
D)  Manufacturing budget. 
E)  Rolling budget. 
A)  Cash budget. 
B)  Flexible budget. 
C)  Fixed budget. 
D)  Manufacturing budget. 
E)  Rolling budget.

Question 16

The sum of the variable overhead spending variance, the variable overhead efficiency variance, the fixed overhead spending variance is the ___________________________.

Accepted Answer

Controllab

Question 17

Cabot Company collected the following data regarding production of one of its products. Compute the fixed overhead cost variance.

Accepted Answer

A)  $18,300 favorable. 
B)  $18,000 favorable. 
C)  $18,000 unfavorable. 
D)  $18,300 unfavorable. 
E)  $14,300 unfavorablE.Actual fixed overhead costs = $338,000 
A)  $18,300 favorable. 
B)  $18,000 favorable. 
C)  $18,000 unfavorable. 
D)  $18,300 unfavorable. 
E)  $14,300 unfavorablE.Actual fixed overhead costs = $338,000

Question 18

Standard costs are:

Accepted Answer

A)  Actual costs incurred to produce a specific product or perform a service. 
B)  Preset costs for delivering a product or service under normal conditions. 
C)  Established by the IMA. 
D)  Rarely achieved. 
E)  Uniform among companies within an industry. 
A)  Actual costs incurred to produce a specific product or perform a service. 
B)  Preset costs for delivering a product or service under normal conditions. 
C)  Established by the IMA. 
D)  Rarely achieved. 
E)  Uniform among companies within an industry.

Question 19

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

Accepted Answer

A fixed budget is prepared before an ope

Question 20

A process of examining the differences between actual and budgeted costs and describing them in terms of the amounts that resulted from price and quantity differences is called:

Accepted Answer

A)  Cost analysis. 
B)  Flexible budgeting. 
C)  Variable analysis. 
D)  Cost variable analysis. 
E)  Variance analysis. 
A)  Cost analysis. 
B)  Flexible budgeting. 
C)  Variable analysis. 
D)  Cost variable analysis. 
E)  Variance analysis.

Exam 24: Flexible Budgets and Standard Costs

Which department is often responsible for the direct materials price variance?

Static budget is another name for:

Sales variances allow managers to focus on sales mix as well as sales quantities.

A fixed budget is also called a _____________ budget.

An analytical technique used by management to focus on the most significant variances and give less attention to the areas where performance is satisfactory is known as:

Companies promoting continuous improvement strive to achieve practical standards rather than ideal standards.

An unfavorable variance is recorded with a debit.

A flexible budget is prepared:

Abrams, Inc., provides the following results of March's operations: Required:(a) Determine the total overhead cost variance for March. (b) Applying the management by exception approach, which of the variances shown are of greatest concern? Why?

For the current period, Boggs Company's manufacturing operations yield a $5,250 unfavorable price variance on its direct materials usage. The actual price per pound is $56.50 and the standard price per pound is $55.00. How many pounds of material are used in the current period?

Whistler Company determined that in the production of their products last period; they had a favorable price variance and an unfavorable quantity variance for direct materials. What might be the cause of this pattern of variances?

Cabot Company collected the following data regarding production of one of its products. Compute the variable overhead efficiency variance.

Brewer Company specializes in selling used cars. During the month, the dealership sold 22 cars at an average price of $15,000 each. The budget for the month was to sell 20 cars at an average price of $16,000. Compute the dealership's sales price variance for the month.

Variable budget is another name for:

The sum of the variable overhead spending variance, the variable overhead efficiency variance, the fixed overhead spending variance is the ___________________________.

Cabot Company collected the following data regarding production of one of its products. Compute the fixed overhead cost variance.

Standard costs are:

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

A process of examining the differences between actual and budgeted costs and describing them in terms of the amounts that resulted from price and quantity differences is called:

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 Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Capital Budgeting and Managerial Decisions

Time Value of Money

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