Question 1

At the end of the accounting period,immaterial variances are closed to ________.

Accepted Answer

The answer of At the end of the accounting period,immaterial...

Question 2

Sales variance analysis is used by managers for:

Accepted Answer

A)  Planning purposes only.
B)  Budgeting purposes only.
C)  Control purposes only.
D)  Planning and control purposes.
E)  Planning and budgeting purposes.F) A) and E)
G) B) and D)

Question 3

Janitor Supply produces an industrial cleaning powder that requires 40 grams of material at $0.10 per gram and 0.25 direct labor hours at $12.00 per hour.Overhead is applied at the rate of $18 per direct labor hour.What is the total standard cost for one unit of product that would appear on a standard cost card?

Accepted Answer

A)  $7.00.
B)  $8.50.
C)  $11.50.
D)  $7.50.
E)  $25.00.F) B) and D)
G) B) and C)

Question 4

A cost variance can be further separated into the quantity variance and the price variance.

Accepted Answer

A) True 
 B)False

Question 5

An unfavorable variance is recorded with a debit because it reflects additional costs higher than the standard cost.

Accepted Answer

A) True 
 B)False

Question 6

Whidbey Co.fixed budget for the year is shown below:

Prepare a flexible budget for Whidbey Co.that shows a detailed budget for its actual sales volume of 42,000 units.Use the contribution margin format.

Accepted Answer

The answer of Whidbey Co.fixed budget for the year is...

Question 7

A company's flexible budget for 12,000 units of production showed per unit contribution margin of $3.00 and fixed costs,$20,000.The operating income expected if the company produces and sells 18,000 units is:

Accepted Answer

A)  $34,000.
B)  $10,000.
C)  $18,667.
D)  $16,000.
E)  $24,000.F) C) and D)
G) B) and D)

Question 8

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.F) A) and E)
G) All of the above

Question 9

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.F) B) and C)
G) None of the above

Question 10

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

Accepted Answer

A) True 
 B)False

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.F) A) and B)
G) A) and C)

Question 12

When computing a price variance,the price is held constant.

Accepted Answer

A) True 
 B)False

Question 13

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 operating income expected if the company produces and sells 16,000 units is:

Accepted Answer

A)  $2,667.
B)  $14,000.
C)  $18,667.
D)  $24,000.
E)  $35,000.F) C) and D)
G) A) and D)

Question 14

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.F) C) and D)
G) None of the above

Question 15

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

Accepted Answer

A)  $6,500 favorable.
B)  $29,000 favorable.
C)  $22,500 unfavorable.
D)  $22,500 favorable.
E)  $6,500 unfavorable.F) All of the above
G) C) and E)

Question 16

Fletcher 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.F) C) and E)
G) A) and B)

Question 17

An ________ standard is based on 100% efficiency without any loss or waste.

Accepted Answer

The answer of An ________ standard is based on 100%...

Question 18

Zip-up Company provides the following data developed for its master budget:
  Required:
Prepare flexible budgets for sales of 20,000,22,000 and 24,000 units.Use a contribution margin format.

Accepted Answer

The answer of Zip-up Company provides the following data developed...

Question 19

Use the following cost information to calculate the direct labor rate and efficiency variances and indicate whether they are favorable or unfavorable.

Accepted Answer

The answer of Use the following cost information to calculate...

Question 20

Fletcher Company collected the following data regarding production of one of its products.

-Compute the variable overhead spending variance.

Accepted Answer

A)  $25,450 favorable.
B)  $4,000 favorable.
C)  $4,000 unfavorable.
D)  $21,450 unfavorable..
E)  $21,450 favorable.F) A) and E)
G) C) and D)

Exam 21: Flexible Budgets and Standard Costs

Sales variance analysis is used by managers for:

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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:

Correct Answer
verified

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

Correct Answer
verified

An unfavorable variance is recorded with a debit because it reflects additional costs higher than the standard cost.

Correct Answer
verified

At the end of the accounting period,immaterial variances are closed to ________.

Correct Answer
verified

Whidbey Co.fixed budget for the year is shown below: Prepare a flexible budget for Whidbey Co.that shows a detailed budget for its actual sales volume of 42,000 units.Use the contribution margin format.

Correct Answer
verified

Zip-up Company provides the following data developed for its master budget: Required: Prepare flexible budgets for sales of 20,000,22,000 and 24,000 units.Use a contribution margin format.

Correct Answer
verified

A company's flexible budget for 12,000 units of production showed per unit contribution margin of $3.00 and fixed costs,$20,000.The operating income expected if the company produces and sells 18,000 units is:

Correct Answer
verified

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

Correct Answer
verified

Use the following cost information to calculate the direct labor rate and efficiency variances and indicate whether they are favorable or unfavorable.

Correct Answer
verified

A cost variance can be further separated into the quantity variance and the price variance.

Correct Answer
verified

An ________ standard is based on 100% efficiency without any loss or waste.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

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?

Correct Answer
verified

When computing a price variance,the price is held constant.

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 operating income expected if the company produces and sells 16,000 units is:

Correct Answer
verified

Exam 21: Flexible Budgets and Standard Costs

Sales variance analysis is used by managers for:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An unfavorable variance is recorded with a debit because it reflects additional costs higher than the standard cost.

Correct AnswerverifiedShow Answer

At the end of the accounting period,immaterial variances are closed to ________.

Correct AnswerverifiedShow Answer

Whidbey Co.fixed budget for the year is shown below: Prepare a flexible budget for Whidbey Co.that shows a detailed budget for its actual sales volume of 42,000 units.Use the contribution margin format.

Correct AnswerverifiedShow Answer

Zip-up Company provides the following data developed for its master budget: Required: Prepare flexible budgets for sales of 20,000,22,000 and 24,000 units.Use a contribution margin format.

Correct AnswerverifiedShow Answer

A company's flexible budget for 12,000 units of production showed per unit contribution margin of $3.00 and fixed costs,$20,000.The operating income expected if the company produces and sells 18,000 units is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Use the following cost information to calculate the direct labor rate and efficiency variances and indicate whether they are favorable or unfavorable.

Correct AnswerverifiedShow Answer

A cost variance can be further separated into the quantity variance and the price variance.

Correct AnswerverifiedShow Answer

An ________ standard is based on 100% efficiency without any loss or waste.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

When computing a price variance,the price is held constant.

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 operating income expected if the company produces and sells 16,000 units is:

Correct AnswerverifiedShow Answer

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