Question 1

If the actual level of activity is different from the budgeted level, a _________ budget is prepared for the actual level of activity:

Accepted Answer

A)   continuous
B)   zero-based
C)   master
D)   flexible

Question 2

Selected information about American Industries is presented below. American has three operating divisions and requires a 12% return on all investments:

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> Calculate the missi...

Question 3

The purchasing agent of an organization acquired some raw materials at a bargain price, even though she knew that their quality was lower than that of the materials customarily used. This action resulted in a favorable raw materials purchase price variance that might very well have been more than offset by:

Accepted Answer

A)   an unfavorable raw materials usage variance.
B)   a favorable direct labor efficiency variance.
C)   an unfavorable variable overhead spending variance.
D)   an unfavorable direct labor rate variance.

Question 4

The preferred format for a segmented income statement emphasizes:

Accepted Answer

A)   direct and common fixed costs.
B)   variable and fixed costs.
C)   operating expenses and fixed costs.
D)   variable costs and operating expenses.

Question 5

A set of integrated financial and operating performance measures that communicate an organization's priorities associated with achieving strategic goals is known as a:

Accepted Answer

A)   balanced scorecard.
B)   segment report.
C)   responsibility report.
D)   master budget.

Question 6

The total variance for any particular cost component is referred to as the:

Accepted Answer

A)   price variance.
B)   efficiency variance.
C)   budget variance.
D)   none of these.

Question 7

The standards for one case of Peardrax are:

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> During the week ended June 7, the follo...

Question 8

The standards for one carton of Flavor Rite are:

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> During the week ended May 17, the follo...

Question 9

Which of the following is a true statement pertaining to segment income statements?

Accepted Answer

A)   Only present the individual segments' net income, not total company net income.
B)   Only include variable costs.
C)   Do not present a segment margin.
D)   Do not include arbitrarily allocated common fixed expenses when calculating segment margin.
E)   All of these. D

Question 10

A performance report for direct labor shows a variance between the budget and actual amounts. This difference is a:

Accepted Answer

A)   budget variance.
B)   direct labor efficiency variance.
C)   direct labor spending variance.
D)   direct labor rate variance.

Question 11

Patrick Company manufactures a single product. The original budget for April was based on expected production of 12,000 units; actual production for April was 10,600 units. The original budget and actual costs for the manufacturing department are shown below:

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> Prepare an appropriate performance repo...

Question 12

The cost formula for the maintenance department of the Eifel Co. is $6,500 per month plus $3.50 per machine hour used by the production department.
a. Calculate the maintenance cost that would be budgeted for the month of May in which 5,700 machine hours are planned to be used.
b. Prepare an appropriate performance report for the maintenance department assuming that 5,860 machine hours were actually used in the month of May, and the total maintenance cost incurred was $28,010.

Accepted Answer

The answer of The cost formula for the maintenance department...

Question 13

A favorable materials quantity variance would occur if:

Accepted Answer

A)   more material is purchased than is used.
B)   actual pounds of materials used were less than the standard pounds allowed.
C)   actual labor hours used was greater than the standard labor hours allowed.
D)   actual pounds of materials used was greater than the standard pounds allowed.

Question 14

A variance is the difference between actual costs and:

Accepted Answer

A)   selling price.
B)   expected costs.
C)   activity-based costs.
D)   historical costs.

Question 15

The standards for one case of Saycheles are:

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> During the week ended April 15, the fol...

Question 16

What should the decision rule be to determine what budget variances to investigate?

Accepted Answer

A)   Investigate unfavorable variances only.
B)   Investigate favorable variances only.
C)   Investigate if the variance is significant.
D)   Investigate all variances.

Question 17

If the net of all variances is immaterial relative to the total production costs incurred during the period, the net variance is:

Accepted Answer

A)   treated as an adjustment to cost of goods sold.
B)   ignored.
C)   treated as an adjustment to work in process, finished goods, and cost of goods sold.
D)   treated as an adjustment to manufacturing overhead. A

Question 18

April Corporation developed the following per-unit standards for its product: 2 pounds of direct materials at $3.75 per pound. Last month, 2,000 pounds of direct materials were purchased for $7,600. The direct materials price variance for last month was:

Accepted Answer

A)   $3,800 favorable.
B)   $200 favorable.
C)   $100 unfavorable.
D)   $200 unfavorable.

Question 19

ABC, Inc., is segmented into three divisions and the company is concerned about the performance of Division Y. During your analysis of Division Y, you learn that $42,000 of the fixed expenses relate to general corporate expenses and had been allocated equally between the three divisions.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> (a.) Calculate what the compa...

Question 20

If it is to be most useful for control purposes, what variance should be reported to the supervisor responsible for the number of pounds of corn syrup used in the manufacture of a candy bar?

Accepted Answer

A)   Raw material price variance, expressed in cents per pound.
B)   Raw material usage variance, expressed as a total cost for the month.
C)   Raw material usage variance, expressed in total pounds for the month.
D)   Raw material usage variance, expressed in total pounds for the week. D

Exam 15: Cost Control

If the actual level of activity is different from the budgeted level, a _________ budget is prepared for the actual level of activity:

Correct Answer
verified

Selected information about American Industries is presented below. American has three operating divisions and requires a 12% return on all investments:

Correct Answer
verified
Calculate the missi...
View Answer

Correct Answer
verified

The preferred format for a segmented income statement emphasizes:

Correct Answer
verified

A set of integrated financial and operating performance measures that communicate an organization's priorities associated with achieving strategic goals is known as a:

Correct Answer
verified

The total variance for any particular cost component is referred to as the:

Correct Answer
verified

The standards for one case of Peardrax are:

Correct Answer
verified
During the week ended June 7, the follo...
View Answer

The standards for one carton of Flavor Rite are:

Correct Answer
verified
During the week ended May 17, the follo...
View Answer

Which of the following is a true statement pertaining to segment income statements?

Correct Answer
verified
D

A performance report for direct labor shows a variance between the budget and actual amounts. This difference is a:

Correct Answer
verified

Patrick Company manufactures a single product. The original budget for April was based on expected production of 12,000 units; actual production for April was 10,600 units. The original budget and actual costs for the manufacturing department are shown below:

Correct Answer
verified
Prepare an appropriate performance repo...
View Answer

Correct Answer
verified

A favorable materials quantity variance would occur if:

Correct Answer
verified

A variance is the difference between actual costs and:

Correct Answer
verified

The standards for one case of Saycheles are:

Correct Answer
verified
During the week ended April 15, the fol...
View Answer

What should the decision rule be to determine what budget variances to investigate?

Correct Answer
verified

If the net of all variances is immaterial relative to the total production costs incurred during the period, the net variance is:

Correct Answer
verified
A

April Corporation developed the following per-unit standards for its product: 2 pounds of direct materials at $3.75 per pound. Last month, 2,000 pounds of direct materials were purchased for $7,600. The direct materials price variance for last month was:

Correct Answer
verified

ABC, Inc., is segmented into three divisions and the company is concerned about the performance of Division Y. During your analysis of Division Y, you learn that $42,000 of the fixed expenses relate to general corporate expenses and had been allocated equally between the three divisions.

Correct Answer
verified
(a.) Calculate what the compa...
View Answer

If it is to be most useful for control purposes, what variance should be reported to the supervisor responsible for the number of pounds of corn syrup used in the manufacture of a candy bar?

Correct Answer
verified
D

Exam 15: Cost Control

If the actual level of activity is different from the budgeted level, a _________ budget is prepared for the actual level of activity:

Correct AnswerverifiedShow Answer

Selected information about American Industries is presented below. American has three operating divisions and requires a 12% return on all investments:

Correct Answerverified Calculate the missi...View AnswerShow Answer

Correct AnswerverifiedShow Answer

The preferred format for a segmented income statement emphasizes:

Correct AnswerverifiedShow Answer

A set of integrated financial and operating performance measures that communicate an organization's priorities associated with achieving strategic goals is known as a:

Correct AnswerverifiedShow Answer

The total variance for any particular cost component is referred to as the:

Correct AnswerverifiedShow Answer

The standards for one case of Peardrax are:

Correct Answerverified During the week ended June 7, the follo...View AnswerShow Answer

The standards for one carton of Flavor Rite are:

Correct Answerverified During the week ended May 17, the follo...View AnswerShow Answer

Which of the following is a true statement pertaining to segment income statements?

Correct AnswerverifiedD

A performance report for direct labor shows a variance between the budget and actual amounts. This difference is a:

Correct AnswerverifiedShow Answer

Patrick Company manufactures a single product. The original budget for April was based on expected production of 12,000 units; actual production for April was 10,600 units. The original budget and actual costs for the manufacturing department are shown below:

Correct Answerverified Prepare an appropriate performance repo...View AnswerShow Answer

Correct AnswerverifiedShow Answer

A favorable materials quantity variance would occur if:

Correct AnswerverifiedShow Answer

A variance is the difference between actual costs and:

Correct AnswerverifiedShow Answer

The standards for one case of Saycheles are:

Correct Answerverified During the week ended April 15, the fol...View AnswerShow Answer

What should the decision rule be to determine what budget variances to investigate?

Correct AnswerverifiedShow Answer

If the net of all variances is immaterial relative to the total production costs incurred during the period, the net variance is:

Correct AnswerverifiedA

April Corporation developed the following per-unit standards for its product: 2 pounds of direct materials at $3.75 per pound. Last month, 2,000 pounds of direct materials were purchased for $7,600. The direct materials price variance for last month was:

Correct AnswerverifiedShow Answer

ABC, Inc., is segmented into three divisions and the company is concerned about the performance of Division Y. During your analysis of Division Y, you learn that $42,000 of the fixed expenses relate to general corporate expenses and had been allocated equally between the three divisions.

Correct Answerverified (a.) Calculate what the compa...View AnswerShow Answer

If it is to be most useful for control purposes, what variance should be reported to the supervisor responsible for the number of pounds of corn syrup used in the manufacture of a candy bar?

Correct AnswerverifiedD

Correct Answer
verified

Correct Answer
verified
Calculate the missi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
During the week ended June 7, the follo...
View Answer

Correct Answer
verified
During the week ended May 17, the follo...
View Answer

Correct Answer
verified
D

Correct Answer
verified

Correct Answer
verified
Prepare an appropriate performance repo...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
During the week ended April 15, the fol...
View Answer

Correct Answer
verified

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified
(a.) Calculate what the compa...
View Answer

Correct Answer
verified
D