Question 1

Which of the following organizational perspectives is not reported on a balanced scorecard?

Accepted Answer

The environmental perspective is not typically included in a traditional balanced scorecard, which focuses on four main perspectives: financial, customer, internal business process, and learning and growth. However, some organizations may choose to include an environmental perspective as part of their balanced scorecard approach, particularly if they have specific sustainability or environmental goals.

Question 2

Niangua Co. is divided into three segments and is interested in preparing a segmented income statement in order to better understand the operating performance of each segment. Fixed expenses in each division currently include an allocation of general corporate expenses equal to 20% of the division's sales.(a.) Complete the following segmented income statement for Niangua Co.

Accepted Answer

The answer of Niangua Co. is divided into three segments...

Question 3

Selected information about American Industries is presented below. American has three operating divisions and requires a 12% return on all investments:
Calculate the missing amounts for each division.

Accepted Answer

The answer of Selected information about American Industries is presented...

Question 4

The standards for one case of Saycheles are:
During the week ended April 15, the following activity took place:
• 14,500 lbs. of raw material were purchased for inventory at a total cost of $81,200;
• 1,800 cases of finished product were produced;
• 13,680 lbs. of raw material were used;
• 7,380 labor hours were worked at an average rate of $13.40 per hour.Calculate each of the following variances:
(a.) Raw materials purchase price variance.(b.) Raw materials usage variance.(c.) Direct labor rate variance.(d.) Direct labor efficiency variance.(e.) Explain the factors that most likely caused the variances computed above.

Accepted Answer

The answer of The standards for one case of Saycheles...

Question 5

Which of the following is true about an unfavorable variance appearing in a performance report?

Accepted Answer

An unfavorable variance occurs when actual results are worse than budgeted expectations. In this case, budgeted revenue exceeding actual revenue indicates an unfavorable variance.

Question 6

The standards for one case of Peardrax are:
During the week ended June 7, the following activity took place:
• 5,740 machine hours were worked;
• 22,600 lbs. of raw material were purchased for inventory at a total cost of $83,620;
• 2,700 cases of finished product were produced;
• 21,330 lbs. of raw material were used;
• 10,650 labor hours were worked at an average rate of $15.20 per hour;
• $27,552 actual variable overhead costs were incurred.Calculate each of the following variances:
(a.) Price variance for raw materials purchased.(b.) Raw materials usage variance.(c.) Direct labor rate variance.(d.) Direct labor efficiency variance.(e.) Variable overhead spending variance.(f.) Variable overhead efficiency variance.

Accepted Answer

The answer of The standards for one case of Peardrax...

Question 7

ABC Company's standard direct labor cost per unit includes 3 hours @ $15 per hour. During May ABC Company produced 380 units and incurred total labor cost of $16,200 for 1,200 actual direct labor hours worked. ABC's labor rate variance for May is:

Accepted Answer

First, we need to calculate the standard direct labor cost per hour:

3 hours @ $15 per hour = $45

Next, we can use this information to calculate the standard direct labor cost for the 380 units produced in May:

380 units x $45 per unit = $17,100

Since actual direct labor cost was $16,200, we can calculate the labor rate variance using the following formula:

Labor rate variance = (Actual hours worked x actual rate) - (Actual hours worked x standard rate)

Labor rate variance = (1,200 x ($16,200/1,200)) - (1,200 x $15)

Labor rate variance = ($16,200) - ($18,000)

Labor rate variance = $1,800 F

Therefore, the correct answer is D.

Question 8

ABC Company's standard direct labor cost per unit includes 3 hours @ $15 per hour. During May ABC Company produced 380 units and incurred total labor cost of $16,200 for 1,200 actual direct labor hours worked. ABC's labor efficiency variance for May is:

Accepted Answer

The answer of ABC Company's standard direct labor cost per...

Question 9

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:
Prepare an appropriate performance report for the manufacturing department.

Accepted Answer

The answer of Patrick Company manufactures a single product. The...

Question 10

The Diamond Manufacturing Company uses a standard cost system for and applies overhead based on machine hours. The following information is available for June:
Calculate the fixed overhead budget variance and volume variance for the month of June.

Accepted Answer

The answer of The Diamond Manufacturing Company uses a standard...

Question 11

The Central Division of AAA, Inc., has operating income of $64,000 on sales revenue of $640,000. Divisional operating assets are $320,000 and management of AAA has determined that a minimum return of 12% should be expected from all investments.(a.) Using the DuPont model, calculate the Central Division's margin, turnover, and ROI.(b.) Calculate the Central Division's residual income.

Accepted Answer

The answer of The Central Division of AAA, Inc., has...

Question 12

A balanced scorecard framework is integrated through four key perspectives. The presentation of these key perspectives on a balanced scorecard from the lowest level perspective to the highest level perspectives is:

Accepted Answer

The answer of A balanced scorecard framework is integrated through...

Question 13

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.(a.) Calculate what the company's net income would be if Division Y were closed down.(b.) Revise the income statement presented above into a more useful segmented income statement.

Accepted Answer

The answer of ABC, Inc., is segmented into three divisions...

Question 14

How are unfavorable standard cost variances reported in an organization's annual report?

Accepted Answer

Unfavorable standard cost variances are typically not directly reported in the financial statements. They are usually analyzed internally for management purposes and may be discussed in management's discussion and analysis (MD&A) section or in internal reports, but not as a direct line item in the financial statements.

Question 15

The standards for one carton of Flavor Rite are:
During the week ended May 17, the following activity took place:
• 4,800 lbs. of raw material were purchased for inventory at a cost of $5.60 per pound;
• 1,200 cartons of finished product were produced;
• 4,020 lbs. of raw material were used;
• 3,110 labor hours were worked at a total cost of $26,435.Calculate each of the following variances:
(a.) Raw materials purchase price variance.(b.) Raw materials usage variance.(c.) Direct labor rate variance.(d.) Direct labor efficiency variance.(e.) Explain the factors that most likely caused the variances computed above.

Accepted Answer

The answer of The standards for one carton of Flavor...

Question 16

A high-level integrated approach to measuring and reporting organizational performance is accomplished by using:

Accepted Answer

A balanced scorecard is a comprehensive framework that integrates financial and non-financial measures to evaluate an organization's performance across multiple perspectives, including financial, customer, internal processes, and learning and growth. This approach provides a more holistic view of an organization's performance than the other options listed.

Question 17

The cost formula for the maintenance department of the Raven Co. is $13,000 per month plus $6.50 per machine hour used by the production department.a. Calculate the maintenance cost that would be budgeted for the month of November in which 10,800 machine hours are planned to be used.b. Prepare an appropriate performance report for the maintenance department assuming that 11,130 machine hours were actually used in the month of November, and the total maintenance cost incurred was $86,485.

Accepted Answer

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

Question 18

Innovation Inc.'s production budget for January is 35,000 units and includes the following component unit costs: direct materials, $16; direct labor, $20; variable overhead, $12. Budgeted fixed overhead is $70,000 (35,000 units × 1/2hour × $4unit). Actual production in January was 36,000 units. Actual unit component costs incurred during January include direct materials, $16.50; direct labor, $18.90; variable overhead, $13.64. Actual fixed overhead was $67,000. The standard fixed overhead application rate per unit consists of $4 per machine hour and each unit is allowed a standard of 1/2 hour of machine time.Calculate the fixed overhead budget variance and the fixed overhead volume variance.

Accepted Answer

The answer of Innovation Inc.'s production budget for January is...

Question 19

The standards for one carton of Wonder Wax are:
During the week ended December 4, the following activity took place:
• 4,600 lbs. of raw material were purchased for inventory at a cost of $2.63 per pound;
• 1,050 cartons of finished product were produced;
• 4,225 lbs. of raw material were used;
• 6,140 labor hours were worked at a total cost of $33,463;
• $20,569 actual variable overhead costs were incurred.Calculate each of the following variances:
(a.) Price variance for raw materials purchased.(b.) Raw materials usage variance.(c.) Direct labor rate variance.(d.) Direct labor efficiency variance.(e.) Variable overhead spending variance.(f.) Variable overhead efficiency variance.

Accepted Answer

The answer of The standards for one carton of Wonder...

Quiz 15: Cost Control