Question 1

Fletcher Company collected the following data regarding production of one of its products. Compute the total direct materials cost variance.

Accepted Answer

A)  $6,000 favorable. 
B)  $3,570 unfavorable. 
C)  $2,430 favorable. 
D)  $6,000 unfavorable. 
E)  $3,570 favorable. 
A)  $6,000 favorable. 
B)  $3,570 unfavorable. 
C)  $2,430 favorable. 
D)  $6,000 unfavorable. 
E)  $3,570 favorable.

Question 2

Lavoie Company planned to use 18,500 pounds of material costing $2.50 per pound to make 4,000 units of its product. In actually making 4,000 units, the company used 18,800 pounds that cost $2.54 per pound. Calculate the direct materials price variance.

Accepted Answer

The answer of Lavoie Company planned to use 18,500 pounds...

Question 3

The variable overhead spending variance, the fixed overhead spending variance, and the variable overhead efficiency variance can be combined to find the:

Accepted Answer

A)  Production variance. 
B)  Quantity variance. 
C)  Volume variance. 
D)  Price variance. 
E)  Controllable variance. 
A)  Production variance. 
B)  Quantity variance. 
C)  Volume variance. 
D)  Price variance. 
E)  Controllable variance.

Question 4

A volume variance occurs when the company operates at a different capacity level than was expected.

Accepted Answer

A) True 
 B)False

Question 5

Based on predicted production of 12,000 units, a company anticipates $150,000 of fixed costs and $123,000 of variable costs. The flexible budget amounts of fixed and variable costs for 10,000 units are:

Accepted Answer

A)  $125,000 fixed and $102,500 variable. 
B)  $125,000 fixed and $123,000 variable. 
C)  $102,500 fixed and $150,000 variable. 
D)  $150,000 fixed and $123,000 variable. 
E)  $150,000 fixed and $102,500 variable. 
A)  $125,000 fixed and $102,500 variable. 
B)  $125,000 fixed and $123,000 variable. 
C)  $102,500 fixed and $150,000 variable. 
D)  $150,000 fixed and $123,000 variable. 
E)  $150,000 fixed and $102,500 variable.

Question 6

Beluga Corp. has developed standard costs based on a predicted operating level of 352,000 units of production, which is 80% of capacity. Variable overhead is $281,600 at this level of activity, or $0.80 per unit. Fixed overhead is $440,000. The standard costs per unit are:
   Beluga actually produced 330,000 units at 75% of capacity and actual costs for the period were:
   Calculate the following variances and indicate whether each variance is favorable or unfavorable:
(1) Direct labor efficiency variance: $________
(2) Direct materials price variance: $________
(3) Controllable overhead variance: $________

Accepted Answer

The answer of Beluga Corp. has developed standard costs based...

Question 7

What are some causes of direct labor rate and efficiency variances?

Accepted Answer

The use of workers with different skill

Question 8

Firenze Company's fixed budget for the first quarter of the calendar year appears below. Prepare flexible budgets that show variable costs per unit, fixed costs and two different flexible budgets for sales volumes of 22,000 and 24,000.

Accepted Answer

The answer of Firenze Company's fixed budget for the first...

Question 9

Product A has a sales price of $10 per unit. Based on a 10,000-unit production level, the variable costs are $6 per unit and the fixed costs are $3 per unit. Using a flexible budget for 12,500 units, what is the budgeted operating income from Product A?

Accepted Answer

A)  $12,500. 
B)  $25,000. 
C)  $20,000. 
D)  $30,000. 
E)  $35,000. 
A)  $12,500. 
B)  $25,000. 
C)  $20,000. 
D)  $30,000. 
E)  $35,000.

Question 10

A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs, $18,000; and fixed costs, $16,000. The fixed costs expected if the company produces and sells 16,000 units is:

Accepted Answer

A)  $16,000. 
B)  $64,000. 
C)  $48,000. 
D)  $24,000. 
E)  $18,000. 
A)  $16,000. 
B)  $64,000. 
C)  $48,000. 
D)  $24,000. 
E)  $18,000.

Question 11

Based on predicted production of 25,000 units, Marvel Mix Co. anticipates $175,000 of variable costs and $137,500 of fixed costs. What are the flexible budget amounts of total costs for 28,000 units?

Accepted Answer

Variable cost per un

Question 12

Selected information from Richards Company's flexible budget is presented below:

Richards Company applies overhead to production at a rate of $31.25 per unit based on a normal operating level of 80% of capacity. For the current period, Richards Company produced 5,400 units and incurred $62,000 of fixed overhead costs and $96,000 of variable overhead costs. The company used 11,000 labor hours to produce the 5,400 units. Calculate the variable overhead spending and efficiency variances, and the fixed overhead spending and volume variances. Indicate whether each variance is favorable or unfavorable.

Accepted Answer

Variable overhead
 @#IMG-DLM& *$86,400/9

Question 13

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 14

The fixed overhead variance can be broken down into the ________ variance and the ________ variance.

Accepted Answer

spending;

Question 15

The following information comes from the records of Magno Co. for the current period.
a. Compute the overhead controllable and volume variances. In each case, state whether the variance is favorable or unfavorable.
b. Prepare the journal entries to charge overhead costs to work in process and the overhead variances to their proper accounts.
   Factory overhead (based on budgeted production of 24,500 units)
Variable overhead $2.25/direct labor hour
Fixed overhead $1.95/direct labor hour

Accepted Answer

The answer of The following information comes from the records...

Question 16

Engineworks Co. provides the following fixed budget data for the year:
     Required:
Prepare a flexible budget performance report for the year using the contribution margin format.

Accepted Answer

The answer of Engineworks Co. provides the following fixed budget...

Question 17

A company uses the following standard costs to produce a single unit of output.   During the latest month, the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400. Based on this information, the total direct labor cost variance for the month was:

Accepted Answer

A)  $3,650 favorable 
B)  $2,450 favorable 
C)  $1,200 unfavorable 
D)  $1,200 favorable 
E)  $2,450 unfavorable 
A)  $3,650 favorable 
B)  $2,450 favorable 
C)  $1,200 unfavorable 
D)  $1,200 favorable 
E)  $2,450 unfavorable

Question 18

________ are preset costs for delivering a product or service under normal conditions.

Accepted Answer

The answer of ________ are preset costs for delivering a...

Question 19

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

Accepted Answer

A)  $18,000 favorable. 
B)  $4,000 favorable. 
C)  $18,000 unfavorable. 
D)  $18,300 favorable. 
E)  $14,300 unfavorable. 
A)  $18,000 favorable. 
B)  $4,000 favorable. 
C)  $18,000 unfavorable. 
D)  $18,300 favorable. 
E)  $14,300 unfavorable.

Question 20

The anticipated costs incurred under normal conditions to produce a specific product or to perform a specific service are:

Accepted Answer

A)  Variable costs. 
B)  Fixed costs. 
C)  Standard costs. 
D)  Product costs. 
E)  Period costs. 
A)  Variable costs. 
B)  Fixed costs. 
C)  Standard costs. 
D)  Product costs. 
E)  Period costs.

Fletcher Company collected the following data regarding production of one of its products. Compute the total direct materials cost variance.

Lavoie Company planned to use 18,500 pounds of material costing $2.50 per pound to make 4,000 units of its product. In actually making 4,000 units, the company used 18,800 pounds that cost $2.54 per pound. Calculate the direct materials price variance.

The variable overhead spending variance, the fixed overhead spending variance, and the variable overhead efficiency variance can be combined to find the:

A volume variance occurs when the company operates at a different capacity level than was expected.

Based on predicted production of 12,000 units, a company anticipates $150,000 of fixed costs and $123,000 of variable costs. The flexible budget amounts of fixed and variable costs for 10,000 units are:

What are some causes of direct labor rate and efficiency variances?

Firenze Company's fixed budget for the first quarter of the calendar year appears below. Prepare flexible budgets that show variable costs per unit, fixed costs and two different flexible budgets for sales volumes of 22,000 and 24,000.

Product A has a sales price of $10 per unit. Based on a 10,000-unit production level, the variable costs are $6 per unit and the fixed costs are $3 per unit. Using a flexible budget for 12,500 units, what is the budgeted operating income from Product A?

A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs, $18,000; and fixed costs, $16,000. The fixed costs expected if the company produces and sells 16,000 units is:

Based on predicted production of 25,000 units, Marvel Mix Co. anticipates $175,000 of variable costs and $137,500 of fixed costs. What are the flexible budget amounts of total costs for 28,000 units?

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

The fixed overhead variance can be broken down into the variance and the variance.

Engineworks Co. provides the following fixed budget data for the year: Required: Prepare a flexible budget performance report for the year using the contribution margin format.

________ are preset costs for delivering a product or service under normal conditions.

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

The anticipated costs incurred under normal conditions to produce a specific product or to perform a specific service are:

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Lean Principles and Accounting

Accounting for Business Transactions

Filters

Exam 8: Flexible Budgets and Standard Costs

Fletcher Company collected the following data regarding production of one of its products. Compute the total direct materials cost variance.

Lavoie Company planned to use 18,500 pounds of material costing $2.50 per pound to make 4,000 units of its product. In actually making 4,000 units, the company used 18,800 pounds that cost $2.54 per pound. Calculate the direct materials price variance.

The variable overhead spending variance, the fixed overhead spending variance, and the variable overhead efficiency variance can be combined to find the:

A volume variance occurs when the company operates at a different capacity level than was expected.

Based on predicted production of 12,000 units, a company anticipates $150,000 of fixed costs and $123,000 of variable costs. The flexible budget amounts of fixed and variable costs for 10,000 units are:

What are some causes of direct labor rate and efficiency variances?

Firenze Company's fixed budget for the first quarter of the calendar year appears below. Prepare flexible budgets that show variable costs per unit, fixed costs and two different flexible budgets for sales volumes of 22,000 and 24,000.

Product A has a sales price of $10 per unit. Based on a 10,000-unit production level, the variable costs are $6 per unit and the fixed costs are $3 per unit. Using a flexible budget for 12,500 units, what is the budgeted operating income from Product A?

A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs, $18,000; and fixed costs, $16,000. The fixed costs expected if the company produces and sells 16,000 units is:

Based on predicted production of 25,000 units, Marvel Mix Co. anticipates $175,000 of variable costs and $137,500 of fixed costs. What are the flexible budget amounts of total costs for 28,000 units?

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

The fixed overhead variance can be broken down into the ________ variance and the ________ variance.

Engineworks Co. provides the following fixed budget data for the year: Required: Prepare a flexible budget performance report for the year using the contribution margin format.

________ are preset costs for delivering a product or service under normal conditions.

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

The anticipated costs incurred under normal conditions to produce a specific product or to perform a specific service are:

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Lean Principles and Accounting

Accounting for Business Transactions

Filters

The fixed overhead variance can be broken down into the variance and the variance.