Deck 8: Flexible Budget and Variance Analysis

Question 1

Megan Company's master budget sales were $223,000. Actual sales were $220,000. Sales in the prior year were $219,000. The master budget variance for sales was:

A) $4,000 favorable
B) $4,000 unfavorable
C) $3,000 unfavorable
D) $3,000 favorable

Answer 1

C

Question 2

The following data are for Dexter Corporation: Flexible Budget for
$\begin{array}{llll}&& \text { Master } & \text { Actual Sales } \\&\text { Actual } & \text { Budget } & \text { Activity }\\\text { Units } & \underline{18,000} & \underline{16,000} & \underline{18,000} \\\text { S ales } & \$ 360,000 & \$ 320,000 & \$ 360,000 \\\text { Variable costs } & 234,000 & 192,000 & 216,000 \\\text { Contribution } & \$ 126,000 & \$ 128,000 & \$ 144,000 \\\text { margin }\\\text { Fixed costs } &76,000 & \$ 80,000 & \$ 80,000\\\text { Operating income } &\$ 50,000&\$ 48,000&\$64,000\\\end{array}$ The total of the flexible- budget variances is:

A) $2,000 favorable
B) $14,000 favorable
C) $2,000 unfavorable
D) $14,000 unfavorable

Answer 2

$14,000 unfavorable

Question 3

Identify which of the statements below is not a reason why actual results would differ from those projected in the master budget.

A) Actual sales volume differed from projected sales volume.
B) Actual fixed costs were different than expected.
C) Current period projected sales volume differed from the prior period projection.
D) Variable costs per unit differed from expected amounts.

Answer 3

C

Question 4

The following data for the Unbreakable Company pertain to the production of 1,000 bottles during July: Standard variable overhead cost: $26.00 per pound of glass. Total actual variable overhead cost: $24,800.
Standard variable overhead cost allowed for units produced was $26,000. Variable overhead efficiency variance was $740 unfavorable.
Is the variable overhead rate variance.

A) $1,200 favorable
B) $1,200 unfavorable
C) $1,940 favorable
D) $1,260 unfavorable

Question 5

The Cool Hand Company makes tables for which the following standards have been developed: $$\begin{array} { l l l } & \text { Standard Inputs } & \text { Standard Price } \\& \text { Expected for E ach } & \text { Expected per } \\& \text { Unit of Output } & \text { Unit of Output } \\\text { Direct materials } & 17 \text { pounds } & \$ 5.20 \text { per pound } \\\text { Direct labor } & 3 \text { hours } & \$ 16 \text { per hour }\end{array}$$ Production of 200 tables was expected in May, but 220 tables were actually completed. Direct materials purchased and used were 2,100 pounds at an actual price of $4.40 per pound. Direct labor cost for the month was $10,620, and the actual pay per hour was $18.00. _ is the direct- labor price variance for the month of May.

A) $1,200 favorable
B) $1,180 favorable
C) $1,180 unfavorable
D) $1,200 unfavorable

Question 6

Actual results might differ from the master budget because:

A) revenues or variable costs per unit of activity were not as expected
B) fixed costs per period were not as expected
C) sales and other cost- driver activities were not the same as originally forecasted
D) All of these answers are correct.

Question 7

The Frosty Company makes mugs for which the following standards have been developed: $$\begin{array} { l l l } & \text { Standard Inputs } & \text { Standard Price } \\& \text { Expected for E ach } & \text { Expected per } \\& \text { Unit of Output } & \text { Unit of Output } \\\text { Direct materials } & 5 \text { ounc es } & \$ 2 \text { per ounce } \\\text { Direct labor } & 1.5 \text { hours } & \$ 8 \text { per hour }\end{array}$$ Production of 400 mugs was expected in July, but 440 mugs were actually completed. Direct materials purchased and used were 2,100 ounces at an actual price of $2.20 per ounce. Direct labor cost for the month was $5,310, and the actual pay per hour was $9.00. _ is the direct- material price variance for July.

A) $420 favorable
B) $420 unfavorable
C) $400 unfavorable
D) $400 favorable

Question 8

The following information is for Pepper Pike Corporation: $\begin{array}{ll}&\text { Direct Material }\\\text { Standard price per unit of input } & \$ 25 \\\text { Actual price p er unit of input } & \$ 24 \\\text { Standard inputs allowed p er unit of output } & 3 \text { pounds } \\\text { Actual units of input } & 8,300 \text { pounds } \\\text { Actual units of output } & 2,770 \text { units }\end{array}$ * Direct material is measured in pounds is the direct- material usage variance.

A) $8,300 unfavorable
B) $250 unfavorable
C) $8,300 favorable
D) $250 favorable

Question 9

Panther Company had a favorable flexible- budget direct- material variance. In this case it would not be possible for the direct- material price and usage variances, respectively, to be:

A) favorable and unfavorable
B) favorable and favorable
C) unfavorable and favorable
D) unfavorable and unfavorable

Question 10

A price variance is favorable if:

A) actual quantity exceeds standard quantity
B) actual cost exceeds standard cost
C) standard quantity exceeds actual quantity
D) standard cost exceeds actual cost

Question 11

An example of a favorable variance is:

A) actual revenues are less than expected
B) material prices are greater than expected
C) actual expenses are less than expected
D) expected labor costs are less than actual costs

Question 12

If the actual level of sales significantly exceeds the sales in the master budget, the variances associated with the variable costs will probably be:

A) zero
B) unfavorable
C) favorable
D) undeterminable

Question 13

Rodriguez Company produces 2,500 units. Each unit was expected to require 2 labor hours at a cost of $10 per hour. Total labor cost was $55,250 for 4,750 hours worked. Direct labor is measured in hours. is the total flexible- budget variance for direct labor.

A) $5,250 unfavorable
B) $7,500 favorable
C) $5,250 favorable
D) None of these answers is correct.

Question 14

The following data are for Sponge Corporation: Flexible Budget for
$\begin{array}{llll}&& \text { Master } & \text { Actual Sales } \\&\text { Actual } & \text { Budget } & \text { Activity }\\\text { Units } & \underline{18,000} & \underline{16,000} & \underline{18,000} \\\text { S ales } & \$ 360,000 & \$ 320,000 & \$ 360,000 \\\text { Variable costs } & 234,000 & 192,000 & 216,000 \\\text { Contribution } & \$ 126,000 & \$ 128,000 & \$ 144,000 \\\text { margin }\\\text { Fixed costs } &76,000 & \$ 80,000 & \$ 80,000\\\text { Operating income } &\$ 50,000&\$ 48,000&\$64,000\\\end{array}$ The total of the sales- activity variances is:

A) $16,000 unfavorable
B) $14,000 unfavorable
C) $16,000 favorable
D) $14,000 favorable

Question 15

Columbia Company produces 2,500 units. Each unit was expected to require 2 labor hours at a cost of $10 per hour. Total labor cost was $55,250 for 4,750 hours worked. Direct labor is measured in hours. _ is the direct- labor usage variance.

A) $2,750 favorable
B) $2,500 favorable
C) $2,750 unfavorable
D) $2,500 unfavorable

Question 16

The Corleone Company makes tables for which the following standards have been developed: $$\begin{array} { l l l } & \text { Standard Inputs } & \text { Standard Price } \\& \text { Expected for E ach } & \text { Expected per } \\& \text { Unit of Output } & \text { Unit of Output } \\\text { Direct materials } & \text { 10 pounds } & \$ 4 \text { per pound } \\\text { Direct labor } & 3 \text { hours } & \$ 16 \text { per hour }\end{array}$$ Production of 200 tables was expected in July, but 220 tables were actually completed. Direct materials purchased and used were 2,000 pounds at an actual price of $4.40 per pound. Direct labor cost for the month was $10,620, and the actual pay per hour was $18.00. _ is the direct- material usage variance for July.

A) $880 favorable
B) $800 unfavorable
C) $880 unfavorable
D) $800 favorable

Question 17

The Beach Company currently produces sandals in an automated process. Expected production per month is 20,000 units. The required direct materials cost $1.50 per unit. Manufacturing fixed overhead costs are $40,000 per month. Manufacturing overhead is allocated based on units of production. is the budgeted manufacturing fixed overhead rate.

A) $.50 per unit
B) $2.00 per unit
C) $1.50 per unit
D) None of these answers is correct.

Question 18

Beachwood Company produces 2,500 units. Each unit was expected to require 2 labor hours at a cost of $10 per hour. Total labor cost was $55,250 for 4,750 hours worked. Direct labor is measured in hours. _ is the direct- labor price variance.

A) $5,250 favorable
B) $7,750 favorable
C) $7,750 unfavorable
D) $5,250 unfavorable

Question 19

The following information is for University Heights Corporation: $\begin{array}{ll}&\text { Direct Material }\\\text { Standard price } p \text { er unit of input } & \$ 20 \\\text { Actual price per unit of input } & \$ 18 \\\text { Standard inputs allowed per unit of output } & 3 \text { pounds } \\\text { Actual units of input } & 8,300 \text { pounds } \\\text { Actual units of output } & 2,770 \text { units }\end{array}$ * Direct material is measured in pounds is the total direct- material flexible- budget variance.

A) $16,400 favorable
B) $16,400 unfavorable
C) $16,800 unfavorable
D) $16,800 favorable

Question 20

The following data are for Quick Draw Corporation: Flexible Budget for
$\begin{array}{llll}&& \text { Master } & \text { Actual Sales } \\&\text { Actual } & \text { Budget } & \text { Activity }\\\text { Units } & \underline{18,000} & \underline{16,000} & \underline{18,000} \\\text { S ales } & \$ 360,000 & \$ 320,000 & \$ 360,000 \\\text { Variable costs } & 234,000 & 192,000 & 216,000 \\\text { Contribution } & \$ 126,000 & \$ 128,000 & \$ 144,000 \\\text { margin }\\\text { Fixed costs } &76,000 & \$ 80,000 & \$ 80,000\\\text { Operating income } &\$ 50,000&\$ 48,000&\$64,000\\\end{array}$ The total of the master budget variances is:

A) $2,000 unfavorable
B) $16,000 favorable
C) $2,000 favorable
D) $16,000 unfavorable

Question 21

McQueen Company planned to produce and sell 950 units at a total cost of $177,000. Actual production was 950 units at a cost of $172,000, McQueen Company was:

A) effective
B) efficient
C) inefficient
D) ineffective

Question 22

Rockford Company planned to produce 12,000 units. Processing required 16,000 machine hours at a cost of $15,000 + $10.50 per machine hour. Actual sales were 14,000 units requiring 20,000 machine hours. Actual processing cost was $222,000. is the master budget amount for processing.

A) $225,000
B) $183,000
C) $222,000
D) $213,500

Question 23

Identify which of the following statements about "perfection standards" is true.

A) It is generally believed that they have a negative influence on employee morale.
B) They usually result in unfavorable variances.
C) They are expressions of the most efficient performance possible.
D) All of these answers are correct.

Question 24

If the total sales- activity variance was $7,500 favorable, and the total master budget variance was $10,000 favorable, then the total flexible budget variance must have been:

A) $2,500 unfavorable
B) $2,500 favorable
C) $17,500 favorable
D) indeterminable

Question 25

John Company planned to produce 12,000 units. This level of activities required 20 set- ups at a cost of $18,000 plus $500 per set- up. Actual sales were 10,000 units, requiring 15 set- ups and 12,000 machine hours. Actual set- up cost was $26,000. _ _ is the master budget amount for set- ups.

A) $26,000
B) $28,000
C) $25,500
D) $21,000

Question 26

Jerry Company planned to produce 12,000 units. This level of activities required 20 set- ups at a cost of $18,000 plus $500 per set- up. Actual sales were 10,000 units, requiring 15 set- ups and 12,000 machine hours. Actual set- up cost was $26,000. is the master budget variance for set- ups.

A) $2,000 favorable
B) $2,000 unfavorable
C) $2,500 favorable
D) $2,500 unfavorable

Question 27

In a manufacturing area of an organization, poor product design, problems with the quality of materials, and scheduling conflicts will, more than likely, result in:

A) a favorable materials efficiency variance
B) a favorable materials effectiveness variance
C) an unfavorable materials efficiency variance
D) an unfavorable materials effectiveness variance

Question 28

The following data for the Pull Company pertain to the production of 2,000 clay pigeons during October: Standard variable overhead cost was $6.00 per pound of clay. Total actual variable overhead cost was $18,200.
Standard variable overhead cost allowed for units produced was $20,000. Variable overhead efficiency variance was $740 unfavorable.
Is standard direct material amount per clay pigeon.

A) 10.00 pounds
B) 3.50 pounds
C) 6.00 pounds
D) 1.67 pound

Question 29

The type of budget which serves as the original benchmark for evaluating performance is called:

A) a static budget
B) a flexible budget
C) a balanced budget
D) a cost budget

Question 30

The Foamy Company makes mugs for which the following standards have been developed: $$\begin{array} { l l l } & \text { Standard Inputs } & \text { Standard Price } \\& \text { Expected for Each } & \text { Expected per } \\& \text { Unit of Output } & \text { Unit of Output } \\\text { Direct materials } & 5 \text { ounces } & \$ 2 \text { per ounce } \\\text { Direct labor } & 15 \text { hours } & \$ 8 \text { per hour }\end{array}$$ Production of 400 Mugs was expected in June, but 440 mugs were actually completed. Direct materials purchased and used were 2,100 ounces at an actual price of $2.20 per ounce. Direct labor cost for the month was $5,310, and the actual pay per hour was $9.00. _ is the direct- labor usage variance for the month of June.

A) $560 favorable
B) $560 unfavorable
C) $580 unfavorable
D) $580 favorable

Question 31

Flexible- budget variances are designed to measure the:

A) effectiveness of operations at actual level of activity
B) efficiency of operations at actual level of activity
C) efficiency of operations at projected level of activity
D) effectiveness of operations at projected level of activity

Question 32

Effectiveness is indicated by:

A) flexible- budget variances
B) sales- activity variances
C) master budget variances
D) All of these answers are correct.

Question 33

would probably not be used as a measure of activity in a flexible budget.

A) Number of machine hours used
B) Sales volume
C) Number of direct labor hours worked
D) Number of hours worked by salespeople

Question 34

Corrugated Company currently produces cardboard boxes in an automated process. Expected production per month is 40,000 units. The required direct materials cost $0.30 per unit. Manufacturing fixed overhead costs are $24,000 per month. Manufacturing overhead is allocated based on units of production. is the flexible budget for 40,000 and 20,000 units, respectively.

A) $44,000 and $38,000
B) $36,000 and $30,000
C) $26,000 and $20,000
D) $40,000 and $34,000

Question 35

The Vito Company makes tables for which the following standards have been developed: $$\begin{array} { l l l } & \text { Standard Inputs } & \text { Standard Price } \\& \text { Expected for Each } & \text { Expected per } \\& \text { Unit of Output } & \text { Unit of Output } \\\text { Direct materials } & \text { 10 pounds } & \$ 4 \text { per pound } \\\text { Direct labor } & 4 \text { hours } & \$ 20 \text { per hour }\end{array}$$ Production of 200 tables was expected in August, but 220 tables were actually completed. Direct materials purchased and used were 2,100 pounds at an actual price of $4.40 per pound. Direct labor cost for the month was $10,620, and the actual pay per hour was $18.00. _ is the standard labor cost for each table produced.

A) $20
B) $72
C) $4
D) $80

Question 36

A variance is the difference between:

A) a budgeted amount and a benchmark amount
B) an actual result and a budgeted amount
C) a budgeted amount and a standard amount
D) the required number of inputs for the number of outputs

Question 37

Identify which statement below about "currently attainable standards" is not true.

A) They allow for normal spoilage and nonproductive time.
B) They represent projections of what will probably be attained.
C) Because they allow for waste, they almost always result in favorable variances.
D) Employees usually view these goals as reasonable.

Question 38

Fonda Company planned to sell 33,000 units. Actual sales were 29,000 units. Based on this information, Fonda Company was:

A) ineffective
B) efficient
C) effective
D) inefficient

Question 39

If the direct- labor price variance is $900 favorable, and the direct- labor usage variance is $800 unfavorable, then must be true.

A) actual labor used was more than planned
B) the total direct- labor flexible- budget variance is $100 favorable
C) actual total wages paid were $900 less than expected
D) All of these answers are correct.

Question 40

Which of the following is not a true statement?

A) Flexible budgets are prepared for a range of activity.
B) Flexible budgets help provide a basis for management by exception.
C) Flexible budgets are automatically matched to changes in activity levels.
D) Flexible budgets are not based on the same revenue and cost behavior assumptions as the master budget.

Question 41

Which of the following is a true statement?

A) There is no one right statement here because the experts disagree.
B) The standard set for flexible budgets should always be a standard that can easily be achieved because employees ignore unreasonable goals.
C) The standard set for flexible budgets should always be set higher than expected.
D) The standard set for flexible budgets should always be attainable.

Question 42

If the ending inventory of material is greater than beginning inventory, then the direct- material price variance is based on the:

A) quantity used
B) standard quantity allowed for actual production
C) quantity purchased
D) goods actually produced

Question 43

Differences between the master budget and the flexible budget are due to:

A) poor usage of material and labor
B) a combination of price and material variances
C) actual activity differing from expected activity levels
D) problems of cost control

Question 44

Activity- level variances plus flexible- budget variances equals:

A) total master- budget variances
B) total actual variances
C) total standard variances
D) None of these answers is correct.

Question 45

The Frosty Company makes mugs for which the following standards have been developed: $$\begin{array} { l l l } & \text { Standard Inputs } & \text { Standard Price } \\& \text { Expected for Each } & \text { Expected per } \\& \text { Unit of Output } & \text { Unit of Output } \\\text { Direct materials } & 5 \text { ounces } & \$ 2 \text { per ounce } \\\text { Direct labor } & \text { 1.5 hours } & \$ 8 \text { per hour }\end{array}$$ Production of 400 mugs was expected in July, but 440 mugs were actually completed. Direct materials purchased and used were 2,100 ounces at an actual price of $2.20 per ounce. Direct labor cost for the month was $5,310, and the actual pay per hour was $9.00. _ is the direct- material usage variance for July.

A) $220 favorable
B) $220 unfavorable
C) $200 unfavorable
D) $200 favorable

Question 46

The following data for the Unbreakable Company pertain to the production of 2,000 bottles during July: Standard variable overhead cost: $26.00 per pound of glass. Total actual variable overhead cost: $24,800.
Standard variable overhead cost allowed for units produced was $26,000. Variable overhead efficiency variance was $540 unfavorable.
Is standard direct material amount per bottle.

A) 13.00 pounds
B) )50 pound
C) 2.80 pounds
D) None of these answers is correct.

Question 47

Flexible budgets help to measure:

A) the differences between projected and actual activity levels
B) the reasons why projected activity levels were not attained
C) the efficiency of operations at the actual activity level
D) the amount by which standard quantity and expected prices differ

Question 48

Identify which statement below would not be a possible reason for a variance between a flexible budget and actual results.

A) Labor prices were different than expected.
B) Material prices were different than expected.
C) The actual volume of activity was different than expected.
D) The amount of labor used per unit of output was different than expected.

Question 49

The Frosty Company makes mugs for which the following standards have been developed: $$\begin{array} { l l l } & \text { Standard Inputs } & \text { Standard Price } \\& \text { Expected for E ach } & \text { Expected per } \\& \text { Unit of Output } & \text { Unit of Output } \\\text { Direct materials } & 6 \text { ounces } & \$ 2 \text { per ounce } \\\text { Direct labor } & 3.2 \text { hours } & \$ 9 \text { per hour }\end{array}$$ Production of 400 mugs was expected in July, but 440 mugs were actually completed. Direct materials purchased and used were 2,100 ounces at an actual price of $2.20 per ounce. Direct labor cost for the month was $5,310, and the actual pay per hour was $10.00. is the standard direct- material cost for each mug produced.

A) $12.00
B) $32.00
C) $9.00
D) $13.20

Question 50

Scooby Company planned to produce 12,000 units. Processing required 16,000 machine hours at a cost of $15,000 + $10.50 per machine hour. Actual sales were 14,000 units requiring 20,000 machine hours. Actual processing cost was $222,000. _ is the activity- level variance for processing.

A) $39,000 unfavorable
B) $42,000 favorable
C) $42,000 unfavorable
D) $39,000 favorable

Question 51

A budget that is often changed at the end of a reporting period is called:

A) a trial balance budget
B) a balanced budget
C) a cost budget
D) a flexible budget

Question 52

Breakfast Club Company planned to produce 12,000 units. Processing required 16,000 machine hours at a cost of $15,000 + $10.50 per machine hour. Actual sales were 14,000 units requiring 20,000 machine hours. Actual processing cost was $222,000. is the flexible- budget variance for processing.

A) $3,000 unfavorable
B) $39,000 unfavorable
C) $3,000 favorable
D) None of these answers is correct.

Question 53

The Derby Company makes tables for which the following standards have been developed: $$\begin{array} { l l l } & \text { Standard Inputs } & \text { Standard Price } \\& \text { Expected for E ach } & \text { Expected per } \\& \text { Unit of Output } & \text { Unit of Output } \\\text { Direct materials } & \text { 10 pounds } & \$ 4 \text { per pound } \\\text { Direct labor } & 3 \text { hours } & \$ 16 \text { per hour }\end{array}$$ Production of 200 tables was expected in June, but 220 tables were actually completed. Direct materials purchased and used were 2,100 pounds at an actual price of $4.40 per pound. Direct labor cost for the month was $10,620, and the actual pay per hour was $18.00. _ is the direct- labor usage variance for the month of June.

A) $1,260 favorable
B) $1,120 favorable
C) $1,120 unfavorable
D) None of these answers is correct.

Question 54

Variances should be investigated if they:

A) exceed certain stated dollar or percentage deviations from the budget
B) are favorable
C) are different from the prior period results
D) are unfavorable

Question 55

Corrugated Company currently produces cardboard boxes in an automated process. Expected production per month is 50,000 units. The required direct materials cost is $0.30 per unit. Manufacturing fixed overhead costs are $24,000 per month. Manufacturing overhead is allocated based on units of production. is the budgeted manufacturing fixed overhead rate.

A) $0.48 per unit
B) $2.08 per unit
C) $0.30 per unit
D) None of these answers is correct.

Question 56

Wild West Company planned to produce 12,000 units. Processing required 16,000 machine hours at a cost of $15,000 + $10.50 per machine hour. Actual sales were 14,000 units requiring 20,000 machine hours. Actual processing cost was $222,000. is the master budget variance for processing.

A) $39,000 unfavorable
B) $39,000 favorable
C) $42,000 favorable
D) $42,000 unfavorable

Question 57

The following data for the Pull Company pertain to the production of 2,000 clay pigeons during March: Standard variable overhead cost: $6.00 per pound of clay. Total actual variable overhead cost: $11,200.
Standard variable overhead cost allowed for units produced was $12,000. Variable overhead efficiency variance was $240 unfavorable.
Is the variable overhead flexible- budget variance.

A) $240 unfavorable
B) $800 unfavorable
C) $1,280 favorable
D) $800 favorable

Question 58

The following data for the Pull Company pertain to the production of 3,000 clay pigeons during September: Standard variable overhead cost was $5.00 per pound of clay. Total actual variable overhead cost was $11,200.
Standard variable overhead cost allowed for units produced was $12,000. Variable overhead efficiency variance was $340 unfavorable.
Is the variable overhead rate variance.

A) $1,140 favorable
B) $560 unfavorable
C) $800 unfavorable
D) $800 favorable

Question 59

A static budget is another name for the:

A) operating budget
B) master budget
C) financial budget
D) strategic budget

Question 60

The Green Company makes chairs for which the following standards have been developed: $$\begin{array} { l l l } & \text { Standard Inputs } & \text { Standard Price } \\& \text { Expected for E ach } & \text { Expected per } \\& \text { Unit of Output } & \text { Unit of Output } \\\text { Direct materials } & \text { 10 pounds } & \$ 4 \text { per pound } \\\text { Direct labor } & \text { 2 hours } & \$ 23 \text { per hour }\end{array}$$ Production of 250 chairs was expected in March, but 300 chairs were actually completed. Direct materials purchased and used were 2,700 pounds at an actual price of $4.40 per pound. Direct labor cost for the month was $10,620, and the actual pay per hour was $19.00. _ is the standard direct- material cost for each chair produced.

A) $44.00
B) $46.00
C) $40.00
D) $19.00

Question 61

is most likely to be held directly accountable for a usage variance.

A) A machine operator
B) A purchasing agent
C) A marketing director
D) A production supervisor

Question 62

Garner Company planned to produce 12,000 units. Processing required 16,000 machine hours at a cost of $15,000 + $10.50 per machine hour. Actual sales were 14,000 units requiring 20,000 machine hours. Actual processing cost was $222,000. _ is the flexible budget amount for processing.

A) $222,000
B) $188,000
C) $225,000
D) $213,500

Question 63

Doghouse Company had the following information: At a manufacturing level of 5,000 units, variable and fixed manufacturing costs are $32 and $18 per unit, respectively. Selling price is $70 per unit. is the total manufacturing cost for 10,000 units.

A) $700,000
B) $410,000
C) $250,000
D) None of these answers is correct.

Question 64

compares actual results with budget.

A) Performance report
B) Variance
C) Dynamic analysis
D) Sensitivity analysis

Question 65

If the flexible- budget variance was $5,500 favorable, and the sales- activity variance was $3,000 favorable, the total master budget variance was:

A) $8,500 favorable
B) $2,500 favorable
C) $8,500 unfavorable
D) $2,500 unfavorable

Question 66

Kramer Company planned to produce 12,000 units. This level of activities required 20 set- ups at a cost of $18,000 plus $500 per set- up. Actual sales were 10,000 units, requiring 15 set- ups and 12,000 machine hours. Actual set- up cost was $26,000. is the flexible- budget variance for set- ups.

A) $2,000 favorable
B) $500 favorable
C) $500 unfavorable
D) $2,000 unfavorable

Question 67

Doghouse Company had the following information: At a manufacturing level of 5,000 units, variable and fixed manufacturing costs are $30 and $8 per unit, respectively. Selling price is $60 per unit. _ is the total manufacturing cost for 15,000 units.

A) $570,000
B) $900,000
C) $450,000
D) $490,000

Question 68

The Reynolds Company makes tables for which the following standards have been developed: $$\begin{array} { l l l } & \text { Standard Inputs } & \text { Standard Price } \\& \text { Expected for E ach } & \text { Expected per } \\& \text { Unit of Output } & \text { Unit of Output } \\\text { Direct materials } & \text { 10 pounds } & \$ 4 \text { per pound } \\\text { Direct labor } & 3 \text { hours } & \$ 16 \text { per hour }\end{array}$$ Production of 230 tables was expected in July, but 250 tables were actually completed. Direct materials purchased and used were 2,200 pounds at an actual price of $4.40 per pound. Direct labor cost for the month was $10,620, and the actual pay per hour was $18.00. _ is the direct- material price variance for July.

A) $800 favorable
B) $880 unfavorable
C) $800 unfavorable
D) $880 favorable

Question 69

The Beach Company currently produces sandals in an automated process. Expected production per month is 20,000 units. The required direct materials cost is $1.50 per unit. Manufacturing fixed overhead costs are $30,000 per month. Manufacturing overhead is allocated based on units of production. is the flexible budget for 15,000 and 20,000 units, respectively.

A) $52,500 and $60,000
B) $88,000 and $76,000
C) $45,000 and $60,000
D) $22,500 and $30,000

Question 70

Louis Company planned to produce 12,000 units. This level of activities required 20 set- ups at a cost of $18,000 plus $500 per set- up. Actual sales were 10,000 units, requiring 15 set- ups and 12,000 machine hours. Actual set- up cost was $26,000. _ is the flexible budget amount for set- ups.

A) $7,500
B) $28,000
C) $25,500
D) $21,000

Question 71

A standard cost is a unit cost that:

A) the company attained in the most recently completed period
B) should be attained
C) should never be revised
D) is the average cost for the industry

Question 72

Efficiency is indicated by:

A) flexible- budget variances
B) master budget variances
C) sales- activity variances
D) All of these answers are correct.

Question 73

The usage variance can be calculated by multiplying the expected input price by the difference between:

A) the quantity of inputs actually used and the quantity of inputs that should have been used for actual output
B) the standard inputs allowed and projected inputs allowed for expected output
C) the quantity of inputs actually used and the quantity of inputs that should have been used for projected output
D) the standard inputs allowed and projected inputs allowed at actual output

Question 74

The Foamy Company makes mugs for which the following standards have been developed: $$\begin{array} { l l l } & \text { Standard Inputs } & \text { Standard Price } \\& \text { Expected for E ach } & \text { Expected per } \\& \text { Unit of Output } & \text { Unit of Output } \\\text { Direct materials } & 5 \text { ounc es } & \$ 2 \text { per ounce } \\\text { Direct labor } & 1.5 \text { hours } & \$ 8 \text { per hour }\end{array}$$ Production of 400 mugs was expected in June, but 440 mugs were actually completed. Direct materials purchased and used were 2,100 ounces at an actual price of $2.20 per ounce. Direct labor cost for the month was $5,310, and the actual pay per hour was $9.00. _ is the direct- labor price variance for the month of June.

A) $590 favorable
B) $600 favorable
C) $590 unfavorable
D) $600 unfavorable

Question 75

The Frosty Company makes mugs for which the following standards have been developed: $$\begin{array} { l l l } & \text { Standard Inputs } & \text { Standard Price } \\& \text { Expected for E ach } & \text { Expected per } \\& \text { Unit of Output } & \text { Unit of Output } \\\text { Direct materials } & 5 \text { ounces } & \$ 2 \text { per ounce } \\\text { Direct labor } & 2.5 \text { hours } & \$ 10 \text { per hour }\end{array}$$ Production of 400 mugs was expected in August, but 440 mugs were actually completed. Direct materials purchased and used were 2,100 ounces at an actual price of $2.20 per ounce. Direct labor cost for the month was $5,310, and the actual pay per hour was $9.00. _ is the standard labor cost for each mug produced.

A) $25
B) $22.50
C) $1
D) $10

Question 76

Identify which of the following is not an example of "efficient" performance.

A) Direct material used per unit was less than expected.
B) Direct labor hours per unit were less than expected.
C) More outputs were achieved with less inputs than predicted.
D) More goods were produced and sold than anticipated.

Question 77

is most likely to be held accountable for price variances.

A) A machine operator
B) A marketing director
C) A purchasing agent
D) A production supervisor

Question 78

Domino Company's variable selling and administrative cost is $48,000 when production is 6,000 units. are the variable selling and administrative expenses for 7,000 and 8,000 units, respectively.

A) $56,000 and $64,000
B) $48,000 and $48,000
C) $64,000 and $56,000
D) None of these answers is correct.

Question 79

Checker Company's depreciation cost is $63,000 when production is 21,000 units. are the total depreciation expenses for 15,000 and 20,000 units, respectively.

A) $45,000 and $60,000
B) $63,000 and $63,000
C) $60,000 and $45,000
D) None of these answers is correct.

Question 80

The following data for the Recycle Company pertain to the production of 1,000 bottles during August: Standard variable overhead cost: $26.00 per pound of glass. Total actual variable overhead cost: $24,800.
Standard variable overhead cost allowed for units produced was $26,000. Variable overhead efficiency variance was $540 unfavorable.
Is the variable overhead flexible- budget variance.

A) $2,280 favorable
B) $1,200 unfavorable
C) $540 unfavorable
D) $1,200 favorable