Question 1

Anniston Co.planned to produce and sell 40,000 units.At that volume level,variable costs are determined to be $320,000 and fixed costs are $30,000.The planned selling price is $10 per unit.Anniston actually produced and sold 42,000 units.
Using a contribution margin format:
(a)Prepare a fixed budget income statement for the planned level of sales and production.
(b)Prepare a flexible budget income statement for the actual level of sales and production.

Accepted Answer

The answer of Anniston Co.planned to produce and sell 40,000...

Question 2

The difference between actual quantity of input used and the standard quantity of input used results in a:

Accepted Answer

A) Controllable variance. 
B) Standard variance. 
C) Budget variance. 
D) Quantity variance. 
E) Price variance.

Question 3

Overhead cost variance is:

Accepted Answer

A) The difference between the overhead costs actually incurred and the overhead budgeted at the actual operating level. 
B) The difference between the actual overhead incurred during a period and the standard overhead applied. 
C) The difference between actual and budgeted cost caused by the difference between the actual price per unit and the budgeted price per unit. 
D) The costs that should be incurred under normal conditions to produce a specific product (or component)or to perform a specific service. 
E) The difference between the total overhead cost that would have been expected if the actual operating volume had been accurately predicted and the amount of overhead cost that was allocated to products using the standard overhead rate.

Question 4

The fixed overhead variance can be broken down into the _________________ variance and the _________________ variance.
Answers can appear in any order.

Accepted Answer

The answer of The fixed overhead variance can be broken...

Question 5

A company's flexible budget for the range of 35,000 units to 45,000 units of production showed variable overhead costs of $2 per unit and fixed overhead costs of $72,000.The company incurred total overhead costs of $148,800 while operating at a volume of 40,000 units.The total controllable cost variance is:

Accepted Answer

A) $6,800 favorable. 
B) $6,800 unfavorable. 
C) $3,200 favorable. 
D) $3,200 unfavorable. 
E) $10,000 favorablE.

Question 6

Based on a predicted level of production and sales of 22,000 units,a company anticipates total variable costs of $99,000,fixed costs of $30,000,and operating income of $36,000.Based on this information,the budgeted amount of sales for 20,000 units would be:

Accepted Answer

A) $165,000. 
B) $150,000. 
C) $117,272. 
D) $181,500. 
E) $141,900.

Question 7

Claremont Company specializes in selling refurbished copiers.During the month,the company sold 180 copiers at an average price of $3,000 each.The budget for the month was to sell 175 copiers at an average price of $3,200.The expected total sales for 180 copiers were.

Accepted Answer

A) $540,000. 
B) $576,000. 
C) $525,000. 
D) $560,000. 
E) $550,000.

Question 8

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.

Question 9

Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units.The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units.What is the direct materials quantity variance?

Accepted Answer

A) $400 unfavorable. 
B) $450 unfavorable. 
C) $2,500 unfavorable. 
D) $2,550 unfavorable. 
E) $2,950 unfavorablE.

Question 10

Lionaire,Inc.has developed the following standard cost data based on 60,000 direct labor hours,which is 75% of capacity.  During the last period,the company operated at 80% of capacity and produced 128,000 units.Actual costs were:  Determine the direct materials price and quantity variances and the direct labor rate and efficiency variances.Indicate whether each variance is favorable or unfavorable.

Accepted Answer

The answer of Lionaire,Inc.has developed the following standard cost data...

Question 11

Claymore Corp.has the following information about its standards and production activity for September.The volume variance is:

Accepted Answer

A) $1,295U. 
B) $1,295F. 
C) $2,400U. 
D) $2,400F. 
E) $3,695U.

Question 12

During November,Gliem Company allocated overhead to products at the rate of $26.00 per direct labor hour.This figure was based on 80% of capacity or 1,600 direct labor hours.However,Gliem Company operated at only 70% of capacity,or 1,400 direct labor hours.Budgeted overhead at 70% of capacity is $38,900,and overhead actually incurred was $38,000.What is the company's volume variance for November? (Indicate whether the variance is favorable or unfavorable)

Accepted Answer

The answer of During November,Gliem Company allocated overhead to products...

Question 13

An overhead cost variance is the difference between the total overhead actually incurred for the period and the standard overhead applied to products.

Accepted Answer

A) True 
 B)False

Question 14

The following information relating to a company's overhead costs is available.  Based on this information,the total variable overhead variance is:

Accepted Answer

A) $2,000 favorable. 
B) $6,000 favorable. 
C) $2,000 unfavorable. 
D) $6,000 unfavorable. 
E) $1,000 favorablE.

Question 15

In this type of control system,the master budget is based on a single prediction for sales volume,and the budgeted amount for each cost essentially assumes that a specific amount of sales will occur:

Accepted Answer

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

Question 16

Oxford Co.produces and sells two lines of t-shirts,Classic and Mod.Oxford provides the following data.Compute the sales price and the sales volume variances for each product.

Accepted Answer

The answer of Oxford Co.produces and sells two lines of...

Question 17

A job was budgeted to require 3 hours of labor per unit at $8.00 per hour.The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000.What is the total labor cost variance?

Accepted Answer

A) $2,000 unfavorable. 
B) $3,000 unfavorable. 
C) $6,000 unfavorable. 
D) $8,000 unfavorable. 
E) $9,000 unfavorablE.

Question 18

The following company information is available for March.The direct materials price variance is:

Accepted Answer

A) $5,000 favorable. 
B) $300 favorable. 
C) $5,200 unfavorable. 
D) $5,000 unfavorable. 
E) $5,200 favorablE.

Question 19

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

Accepted Answer

A) $14,300 unfavorable. 
B) $21,450 favorable. 
C) $4,000 unfavorable. 
D) $4,000 favorable. 
E) $21,450 unfavorablE.AH * SVR = (81,500 * $14.30)= $1,165,450

Question 20

A company has established 5 pounds of Material J at $2 per pound as the standard for the material in its Product Z.The company has just produced 1,000 units of this product,using 5,200 pounds of Material J that cost $9,880.The direct materials price variance is:

Accepted Answer

A) $520 unfavorable. 
B) $400 unfavorable. 
C) $120 favorable. 
D) $520 favorable. 
E) $400 favorablE.

Exam 23: Flexible Budgets and Standard Costs

The difference between actual quantity of input used and the standard quantity of input used results in a:

Overhead cost variance is:

The fixed overhead variance can be broken down into the _ variance and the _ variance. Answers can appear in any order.

Based on a predicted level of production and sales of 22,000 units,a company anticipates total variable costs of $99,000,fixed costs of $30,000,and operating income of $36,000.Based on this information,the budgeted amount of sales for 20,000 units would be:

Claremont Company specializes in selling refurbished copiers.During the month,the company sold 180 copiers at an average price of $3,000 each.The budget for the month was to sell 175 copiers at an average price of $3,200.The expected total sales for 180 copiers were.

Standard costs are:

Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units.The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units.What is the direct materials quantity variance?

Claymore Corp.has the following information about its standards and production activity for September.The volume variance is:

An overhead cost variance is the difference between the total overhead actually incurred for the period and the standard overhead applied to products.

The following information relating to a company's overhead costs is available. Based on this information,the total variable overhead variance is:

In this type of control system,the master budget is based on a single prediction for sales volume,and the budgeted amount for each cost essentially assumes that a specific amount of sales will occur:

Oxford Co.produces and sells two lines of t-shirts,Classic and Mod.Oxford provides the following data.Compute the sales price and the sales volume variances for each product.

A job was budgeted to require 3 hours of labor per unit at $8.00 per hour.The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000.What is the total labor cost variance?

The following company information is available for March.The direct materials price variance is:

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

A company has established 5 pounds of Material J at $2 per pound as the standard for the material in its Product Z.The company has just produced 1,000 units of this product,using 5,200 pounds of Material J that cost $9,880.The direct materials price variance is:

Exam 23: Flexible Budgets and Standard Costs

The difference between actual quantity of input used and the standard quantity of input used results in a:

Overhead cost variance is:

The fixed overhead variance can be broken down into the _________________ variance and the _________________ variance. Answers can appear in any order.

Based on a predicted level of production and sales of 22,000 units,a company anticipates total variable costs of $99,000,fixed costs of $30,000,and operating income of $36,000.Based on this information,the budgeted amount of sales for 20,000 units would be:

Claremont Company specializes in selling refurbished copiers.During the month,the company sold 180 copiers at an average price of $3,000 each.The budget for the month was to sell 175 copiers at an average price of $3,200.The expected total sales for 180 copiers were.

Standard costs are:

Summerlin Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units.The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units.What is the direct materials quantity variance?

Claymore Corp.has the following information about its standards and production activity for September.The volume variance is:

An overhead cost variance is the difference between the total overhead actually incurred for the period and the standard overhead applied to products.

The following information relating to a company's overhead costs is available. Based on this information,the total variable overhead variance is:

In this type of control system,the master budget is based on a single prediction for sales volume,and the budgeted amount for each cost essentially assumes that a specific amount of sales will occur:

Oxford Co.produces and sells two lines of t-shirts,Classic and Mod.Oxford provides the following data.Compute the sales price and the sales volume variances for each product.

A job was budgeted to require 3 hours of labor per unit at $8.00 per hour.The job consisted of 8,000 units and was completed in 22,000 hours at a total labor cost of $198,000.What is the total labor cost variance?

The following company information is available for March.The direct materials price variance is:

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

A company has established 5 pounds of Material J at $2 per pound as the standard for the material in its Product Z.The company has just produced 1,000 units of this product,using 5,200 pounds of Material J that cost $9,880.The direct materials price variance is:

The fixed overhead variance can be broken down into the _ variance and the _ variance. Answers can appear in any order.