Deck 17: Accounting for Control

Question 1

Palesworth Productions Limited budgeted a figure of £25 000 in net profit for the month of May 20X5, based on a target sales figure of 600 units.The actual outturn was that 700 units were sold.The flexed budget net profit figure was £26 700 and the actual net profit for the month was £27 200. What was the sales profit volume variance for May 20X5?

A)£500
B)£1200
C)£2200
D)£1700

Answer 1

£1700

Question 2

Britney Walsh Limited budgeted a total spend of £12 600 on raw materials for June 20X1: 6 kg @ £3.50 x 600 units. The budget outturn was that 620 units were sold.These were each produced using 6.5kg of raw materials at a price of £3.30 per kg.
What was the flexed budget figure for raw materials for June 20X1?

A)£12 870
B)£11 880
C)£13 020
D)£14 105

Answer 2

£13 020

Question 3

Snelling and Penwortham Limited's sales budget for November 20X6 was 3000 units at a standard selling price of £26.50.Actual sales volumes exceeded expectations at 3150 units.The actual sales price was £26.20. What was the sales price variance for November 20X6?

A)£3030 (F)
B)£945 (F)
C)£3030 (A)
D)£945 (A)

Answer 3

£945 (A)

Question 4

Styles Warnleigh Limited's materials budget for February 20X2 comprised 4.5 kg.of raw material at a standard cost of £3.50 per kg.for each unit produced and sold.Actual sales and production for the month was 286 units.£3.62 was actually paid for each kg of raw material used in the month, and the actual input to each product unit was 4.3 kg. What was the materials price variance for February 20X2?

A)£147.58 (F)
B)£147.58 (A)
C)£52.62 (F)
D)£52.62 (A)

Question 5

Hoode and Lowe Limited's materials budget for August 20X3 comprised 6 metres of raw material at a standard cost of £2.30 per metre for each unit produced and sold.Actual sales and production for the month was 680 units.The outturn was that 6.20 metres of raw material were used for each unit at a cost of £2.40 per metre. What was the materials price variance for August 20X3?

A)£734.40 (A)
B)£421.60 (F)
C)£734.40 (F)
D)£421.60 (A)

Question 6

Brandenburg and Fontaine Limited produced and sold 1350 units of their BF322 product in October 20X4.Each unit was budgeted to use 1.5 hours of labour at a standard cost of £11.60 per hour.When the company's management accountant reviewed the records for the month he found that 1.6 labour hours had been used in actual production, at an actual cost of £11.55 per hour. What was the labour rate variance for October 20X4?

A)£108 (F)
B)£108 (A)
C)£1458 (F)
D)£1458 (A)

Question 7

Petty Simpson Limited budgeted a figure of £32 460 in net profit for the month of June 20X2, based on a target sales figure of 1000 units.The actual outturn was that 990 units were sold.The flexed budget net profit figure was £32 320, and the actual net profit for the month was £33 060. What was the sales profit volume variance for June 20X2?

A)£460
B)£140
C)£740
D)£600

Question 8

Precinct and Weston Limited's sales budget for June 20X6 was 500 units at a standard selling price of £75.The actual price at which units were sold in the month was £78, and in total 510 units were actually sold. What was the sales price variance for June 20X6?

A)£780 (F)
B)£780 (A)
C)£1530 (F)
D)£1530 (A)

Question 9

Sloop Pennyfeather Limited budgeted a total spend of £12 600 on raw materials for December 20X6: 6 kg at a standard price of £3.50 x 600 units. The budget outturn was that 610 units were sold.These were each produced using 6.5kg of raw materials at a price of £3.30 per kg.
What was the materials quantity variance for December 20X6?

A)£274.50 (A)
B)£484.50 (A)
C)£1067.50 (A)
D)£1277.50 (A)

Question 10

Which one of the following statements is correct? Standard costing is a system that can be usefully applied in business environments where:

A)products are custom-built to comply with customer requirements
B)costs are expected to fluctuate within wide parameters
C)the relevant accounting standard on product costing is followed
D)a repetitive and predictable series of standardized operations are carried out

Question 11

Billingsgate Western Limited has the following budget for December 20X2: The direct expense is a royalty payable to the product's patent holder for each unit produced.The company does not absorb production overhead using an overhead absorption rate and it may be assumed that all of its overheads are fixed in nature.If the company flexes its budget for 260 units, what will be the revised net profit figure?

A)£14 036
B)£14 876
C)£13 702
D)£14 896

Question 12

Mulhouse and Snell Limited budgeted a figure of £53 220 in net profit for the month of August 20X5, based on a target sales figure of 2000 units.The actual outturn was that 2020 units were sold.The flexed budget net profit figure was £54 470 and the actual net profit for the month was £54 400. What was the sales profit volume variance for August 20X5?

A)£1250 (A)
B)£1180 (F)
C)£1250 (F)
D)£1180 (A)

Question 13

Snodgrass and Payne Limited's materials budget for April 20X4 comprised 6 metres of raw material at a standard cost of £2.30 per metre for each unit produced and sold.Actual sales and production for the month was 680 units.The outturn was that 6.20 metres of raw material were used for each unit at a cost of £2.40 per metre. What was the materials quantity variance for April 20X4?

A)£734.40 (F)
B)£312.80 (A)
C)£312.80 (F)
D)£734.40 (A)

Question 14

Britton Aarhus Limited's sales budget for November 20X3 was 550 units at a standard selling price of £68.50.The flexed sales figure was £37 264.The actual selling price achieved in the month was £68.95. What was the sales price variance for November 20X3?

A)£244.80 (F)
B)£244.80 (A)
C)£413.70 (A)
D)£413.70 (F)

Question 15

Hatton and Hussein Limited's sales budget for July 20X6 was 680 units at a standard selling price of £32.50.At the end of the month the management accountant flexed the budget; the flexed sales figure was £22 620.The actual selling price achieved in the month was £33.75. What was the sales price variance for July 20X6?

A)£870.00 (A)
B)£333.20 (F)
C)£870.00 (F)
D)£333.20 (A)

Question 16

Picken Warbury Limited has the following budget for January 20X5: The company does not absorb production overhead using an overhead absorption rate and it may be assumed that all of its overheads are fixed in nature.If the company flexes its budget for 560 units, what will be the revised net profit figure?

A)£6737.50
B)£7237.50
C)£3750.00
D)£9260.00

Question 17

Which one of the following statements is correct? The variance between the original budgeted profit and the flexed budget profit is known as:

A)the profit variance
B)the sales volume variance
C)the sales profit volume variance
D)the profit price variance

Question 18

Wengeli and Hudson Limited's materials budget for February 20X3 comprised 2.5 kg of raw material at a standard cost of £10.50 per kg for each unit produced and sold.The sales and production budget was for 880 units.Actual sales and production for the month was 890 units.The actual price paid for raw materials was £10.40 and 2.4 kg were used in the manufacture of each unit. What was the materials price variance for February 20X3?

A)£885.60 (F)
B)£213.60 (F)
C)£1148.10 (F)
D)£222.50 (F)

Question 19

Which one of the following statements is correct? Responsibility accounting ensures that:

A)there is strict control over responsibility for resource allocation
B)management accountants accept responsibility for their monthly management reports
C)problems identified by analysing variances are tracked to their source
D)standard costing systems are implemented in accordance with accounting standards

Question 20

Sloop Warrenby Limited has the following budget for March 20X3: The company does not absorb production overhead using an overhead absorption rate and it may be assumed that all of its overheads are fixed in nature.If the company flexes its budget for 1200 units, what will be the revised net profit figure?

A)£2580.00
B)£2688.00
C)£2400.00
D)£3216.67

Question 21

Vilneuve and Prewitt Limited's direct labour budget for May 20X9 comprised 2.3 labour hours at a rate of £9.75 per unit.The actual sales and production level for the month was 1850 units.The actual labour rate paid was £9.95 and each unit actually required, on average, an input of 2.6 labour hours. What was the labour rate variance for May 20X9?

A)£962 (A)
B)£851 (A)
C)£851 (F)
D)£962 (F)

Question 22

Millworth and Moorhead Limited incurs variable production overheads.The company's budget for February 20X4 included 2360 units of sales and production.Variable overheads were recovered at a rate of £5.60 per unit. The actual sales and production in units for the month was 2333, and the actual figure for variable overheads incurred was £12 257.
What was the variable production overhead variance for February 20X4?

A)£959 (F)
B)£959 (A)
C)£807.80 (F)
D)£807.80 (A)

Question 23

Brookworth and Ghent Limited incurs variable production overheads.The company's budget for March 20X6 included 966 units of sales and production.Variable overheads were recovered at a rate of £16.50 per unit. The actual sales and production in units for the month was 934, and the actual figure for variable overheads incurred was £14 996.
What was the variable production overhead variance for March 20X6?

A)£943 (F)
B)£415 (F)
C)£415 (A)
D)£943 (A)

Question 24

Ancona and Flight Limited's direct labour budget for September 20X3 comprised 2.3 labour hours at a rate of £9.75 per unit.The actual sales and production level for the month was 1850 units.The actual labour rate paid was £9.95 and each unit actually required, on average, an input of 2.6 labour hours. What was the labour efficiency variance for September?

A)£5522.25 (A)
B)£5522.25 (F)
C)£5411.25 (A)
D)£5411.25 (F)

Question 25

Parnassus Products Limited's labour budget for January 20X3 comprised 1.75 hours of direct labour input at a standard rate of £7.60 per hour, for each unit of production.The actual labour rate paid in the month was £7.70 and the figure for actual hours input per unit of product was 1.72.The actual sales and production level for the month was 1227 units. What was the total labour variance (i.e.the total of the labour rate and the labour efficiency variances) for January 20X3?

A)£211.05
B)£279.76
C)£68.71
D)£490.81

Question 26

Sopworth and Barking Limited incurs variable production overheads.The company's budget for December 20X9 included 1760 units of sales and production.Variable overheads were recovered at a rate of £2.25 per unit. The actual sales and production in units for the month was 1721, and the actual figure for variable overheads incurred was £4275.
What was the variable production overhead variance for December 20X9?

A)£402.75 (F)
B)£315.00 (F)
C)£315.00 (A)
D)£402.75 (A)

Question 27

Olette Staines Limited produced and sold 1350 units of their OS211 product in September 20X7.Each unit was budgeted to use 1.5 hours of labour at a standard cost of £11.60 per hour.When the company's management accountant reviewed the records for the month he found that 1.6 labour hours had been used in actual production, at an actual cost of £11.55 per hour. What was the labour efficiency variance for September 20X7?

A)£1458 (F)
B)£1566 (A)
C)£1566 (F)
D)£1458 (A)

Question 28

Munster and Moss Limited budgeted sales and production of 1650 units in the month of July 20X2.In the event, the company produced and sold 1665 units.The budgeted labour rate per unit was £12.50, whereas the actual rate was £12.40. Budget labour hours per unit of product was 4.3 hours, whereas actual the actual labour hours figure was 4.6 per unit.
What was the labour efficiency variance for July 20X2?

A)£6187.50
B)£5477.85
C)£6139.80 (A)
D)£6243.75 (A)

Question 29

Coromandel and Wellington Limited incurs variable production overheads.The company's budget for August 20X3 included 960 units of sales and production.Variable overheads were recovered at a rate of £3 per unit. The actual sales and production in units for the month was 975, and the actual figure for variable overheads incurred was £3250.
What was the variable production overhead variance for August 20X3?

A)£325 (A)
B)£370 (A)
C)£370 (F)
D)£325 (F)

Question 30

Durkheim Goldfinger Limited budgeted a sales and production level of 2600 units for the month of December 20X3.The actual sales and production outturn was 2520 units.The labour budget for the month comprised an input of 3.2 hours per unit at a standard rate of £8.65.Actual figures per unit were 3.3 hours at an actual rate of £8.60. What was the labour rate variance for December 20X3?

A)£2167.20 (A)
B)£450.40 (F)
C)£415.80 (F)
D)£1764.00 (A)