Question 1

A product has a sales price of $20.Based on a 15,000-unit production level,the variable costs are $12 per unit and the fixed costs are $6 per unit.Using a flexible budget for an actual production and sales level of 18,000 units,what is the budgeted operating income?

Accepted Answer

The answer of A product has a sales price of...

Question 2

Variable budget is another name for:

Accepted Answer

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

Question 3

Gala Enterprises reports the following information regarding the production of one of its products for the month.Compute the total direct materials cost variance,the direct materials price variance,the direct materials quantity variance and identify each as either favorable or unfavorable.

Accepted Answer

Direct materials cost variance:
Actual u...

Question 4

Fixed budget performance reports compare actual results with the results expected under a fixed budget.

Accepted Answer

A) True 
 B)False

Question 5

When recording the journal entry for labor,the Work in Process Inventory account is

Accepted Answer

A)  Debited for standard labor cost.
B)  Debited for actual labor cost.
C)  Credited for standard labor cost.
D)  Credited for actual labor cost.
E)  Not used. A

Question 6

Standard costs are used in the calculation of:

Accepted Answer

A)  Price and quantity variances.
B)  Price variances only.
C)  Quantity variances only.
D)  Price,quantity,and sales variances.
E)  Quantity and sales variances.

Question 7

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

Accepted Answer

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

Question 8

A favorable direct materials price variance might lead to an unfavorable direct materials quantity variance because the company purchased inferior materials.

Accepted Answer

A) True 
 B)False

Question 9

The 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 10

Maxwell Co.collected the following information about its production activities for the current year.
a.Compute the direct materials price and quantity variances and indicate whether each is favorable or unfavorable.
b.Prepare the journal entry to record the issuance of direct materials into production.
Actual costs and quantities:
Direct materials used 95,000 lbs.@ $6.30 per lb.
Units completed during the year,50,000 units
Standard costs and quantities:
Price per lb.of direct material,$6.05
Two lbs.of direct material per unit

Accepted Answer

The answer of Maxwell Co.collected the following information about its...

Question 11

The difference between the actual sales and the flexible budget sales is called the ________ variance.

Accepted Answer

The answer of The difference between the actual sales and...

Question 12

A cost variance is the difference between actual cost and standard cost.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A)  $7,000 favorable.
B)  $6,000 favorable.
C)  $1,000 unfavorable.
D)  $6,000 unfavorable.
E)  $1,000 favorable.

Question 14

The purchasing department is responsible for the price paid for materials.

Accepted Answer

A) True 
 B)False

Question 15

The following information describes a company's usage of direct labor in a recent period.The direct labor rate variance is:

Accepted Answer

A)  $29,000 favorable.
B)  $29,000 unfavorable.
C)  $22,500 unfavorable.
D)  $52,500 favorable.
E)  $52,500 unfavorable.

Question 16

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.

Question 17

Use the following data to find the total direct labor cost variance if the company produced 3,500 units during the period.

Accepted Answer

A)  $6,125 unfavorable.
B)  $7,000 unfavorable.
C)  $7,000 favorable.
D)  $21,000 favorable.
E)  $14,875 favorable.

Question 18

When standard manufacturing costs are recorded in the accounts and the cost variances are immaterial at the end of the accounting period,the cost variances should be:

Accepted Answer

A)  Carried forward to the next accounting period.
B)  Allocated between cost of goods sold,finished goods,and work in process.
C)  Closed to cost of goods sold.
D)  Written off as a selling expense.
E)  Ignored.

Question 19

A fixed budget performance report never provides useful information for evaluating variances.

Accepted Answer

A) True 
 B)False

Question 20

Flexible budgets may be prepared before or after an actual period of activity.Why would management prepare such budgets at differing time frames?

Accepted Answer

Flexible budgets are prepared prior to activities to allow management to see possible predicted outcomes.The different levels often include both a best-case and worst-case scenario.They are prepared after a period to better compare expected results at the actual level of sales or other activity with the actual results to determine relevant and meaningful variances.

Exam 21: Flexible Budgets and Standard Costs

A product has a sales price of $20.Based on a 15,000-unit production level,the variable costs are $12 per unit and the fixed costs are $6 per unit.Using a flexible budget for an actual production and sales level of 18,000 units,what is the budgeted operating income?

Correct Answer
verified
11ed5e77_3d87_c367_b55e_b5c23edbd38f_TB6949_00

Variable budget is another name for:

Correct Answer
verified

Gala Enterprises reports the following information regarding the production of one of its products for the month.Compute the total direct materials cost variance,the direct materials price variance,the direct materials quantity variance and identify each as either favorable or unfavorable.

Correct Answer
verified
Direct materials cost variance:
Actual u...
View Answer

Fixed budget performance reports compare actual results with the results expected under a fixed budget.

Correct Answer
verified

When recording the journal entry for labor,the Work in Process Inventory account is

Correct Answer
verified
A

Standard costs are used in the calculation of:

Correct Answer
verified

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

Correct Answer
verified

A favorable direct materials price variance might lead to an unfavorable direct materials quantity variance because the company purchased inferior materials.

Correct Answer
verified

The overhead cost variance is:

Correct Answer
verified

Correct Answer
verified

The difference between the actual sales and the flexible budget sales is called the ________ variance.

Correct Answer
verified

A cost variance is the difference between actual cost and standard cost.

Correct Answer
verified

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

Correct Answer
verified

The purchasing department is responsible for the price paid for materials.

Correct Answer
verified

The following information describes a company's usage of direct labor in a recent period.The direct labor rate variance is:

Correct Answer
verified

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:

Correct Answer
verified

Use the following data to find the total direct labor cost variance if the company produced 3,500 units during the period.

Correct Answer
verified

When standard manufacturing costs are recorded in the accounts and the cost variances are immaterial at the end of the accounting period,the cost variances should be:

Correct Answer
verified

A fixed budget performance report never provides useful information for evaluating variances.

Correct Answer
verified

Flexible budgets may be prepared before or after an actual period of activity.Why would management prepare such budgets at differing time frames?

Exam 21: Flexible Budgets and Standard Costs

A product has a sales price of $20.Based on a 15,000-unit production level,the variable costs are $12 per unit and the fixed costs are $6 per unit.Using a flexible budget for an actual production and sales level of 18,000 units,what is the budgeted operating income?

Correct Answerverified11ed5e77_3d87_c367_b55e_b5c23edbd38f_TB6949_00

Variable budget is another name for:

Correct AnswerverifiedShow Answer

Gala Enterprises reports the following information regarding the production of one of its products for the month.Compute the total direct materials cost variance,the direct materials price variance,the direct materials quantity variance and identify each as either favorable or unfavorable.

Correct AnswerverifiedDirect materials cost variance:Actual u...View AnswerShow Answer

Fixed budget performance reports compare actual results with the results expected under a fixed budget.

Correct AnswerverifiedShow Answer

When recording the journal entry for labor,the Work in Process Inventory account is

Correct AnswerverifiedA

Standard costs are used in the calculation of:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A favorable direct materials price variance might lead to an unfavorable direct materials quantity variance because the company purchased inferior materials.

Correct AnswerverifiedShow Answer

The overhead cost variance is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The difference between the actual sales and the flexible budget sales is called the ________ variance.

Correct AnswerverifiedShow Answer

A cost variance is the difference between actual cost and standard cost.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The purchasing department is responsible for the price paid for materials.

Correct AnswerverifiedShow Answer

The following information describes a company's usage of direct labor in a recent period.The direct labor rate variance is:

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

Use the following data to find the total direct labor cost variance if the company produced 3,500 units during the period.

Correct AnswerverifiedShow Answer

When standard manufacturing costs are recorded in the accounts and the cost variances are immaterial at the end of the accounting period,the cost variances should be:

Correct AnswerverifiedShow Answer

A fixed budget performance report never provides useful information for evaluating variances.

Correct AnswerverifiedShow Answer

Flexible budgets may be prepared before or after an actual period of activity.Why would management prepare such budgets at differing time frames?

Correct Answer
verified
11ed5e77_3d87_c367_b55e_b5c23edbd38f_TB6949_00

Correct Answer
verified

Correct Answer
verified
Direct materials cost variance:
Actual u...
View Answer

Correct Answer
verified

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified