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Q:
Actual fixed overhead for a company during March was $77,612. The flexible budget for fixed overhead this period is $78,000 based on a production level of 4,875 units. If the company actually produced 4,300 units, what is the fixed overhead volume variance for March?
A. $388 favorable
B. $9,200 unfavorable
C. $8,812 unfavorable
D. $388 unfavorable
E. $9,200 favorable
Q:
Actual fixed overhead for a company during March was $97,612. The flexible budget for fixed overhead this period is $88,000 based on a production level of 5,500 units. If the company actually produced 4,300 units, what is the fixed overhead spending variance for March?
A. $9,612 favorable
B. $1,200 unfavorable
C. $28,812 unfavorable
D. $9,612 unfavorable
E. $28,812 favorable
Q:
Actual fixed overhead for Kapok Company during March was $92,780. The flexible budget for fixed overhead this period is $89,000 based on a production level of 5,000 units. If the company actually produced 4,200 units, what is the fixed overhead spending variance for March?
A. $3,780 favorable
B. $800 unfavorable
C. $14,240 unfavorable
D. $3,780 unfavorable
E. $14,240 favorable
Q:
Actual fixed overhead for Kapok Company during March was $92,780. The flexible budget for fixed overhead this period is $89,000 based on a production level of 5,000 units. If the company actually produced 4,200 units what is the fixed overhead volume variance for March?
A. $3,780 favorable
B. $18,020 unfavorable
C. $14,240 unfavorable
D. $3,780 unfavorable
E. $14,240 favorable
Q:
Rising, Inc., uses the following standard to produce a single unit of its product:
Overhead (2 hrs. @ $3/hr.) = $6
The flexible budget for overhead is $100,000 plus $1 per direct labor hour. Actual data for the month show overhead costs of $150,000 based on 24,000 units of production. The overhead volume variance is:
A. $10,000 favorable
B. $12,000 favorable
C. $4,000 unfavorable
D. $16,000 unfavorable
E. $36,000 unfavorable
Q:
Price Company's flexible budget shows $10,710 of overhead at 75% of capacity, which was the operating level achieved during May. However, the company applied overhead to production during May at a rate of $2 per direct labor hour based on a budgeted operating level of 6,120 direct labor hours (90% of capacity). If overhead actually incurred was $11,183 during May, the controllable variance for the month was:
A. $473 unfavorable
B. $473 favorable
C. $1,530 favorable
D. $1,530 unfavorable
E. $1,057 favorable
Q:
Regarding overhead costs, as volume increases:
A. Unit fixed cost increases, unit variable cost decreases.
B. Unit fixed cost decreases, unit variable cost increases.
C. Unit variable cost decreases, unit fixed cost remains constant.
D. Unit fixed cost decreases, unit variable cost remains constant.
E. Both unit fixed cost and unit variable cost remain constant.
Q:
The controllable variance is:
A. $1,295U
B. $1,295F
C. $2,400U
D. $2,400F
E. $3,695U
Q:
The volume variance is:
A. $1,295U
B. $1,295F
C. $2,400U
D. $2,400F
E. $3,695U
Q:
Adams Co. uses the following standard to produce a single unit of its product:
Variable overhead (2 hrs. @ $3/hr.) = $ 6
Actual data for the month show variable overhead costs of $150,000 based on 24,000 units of production. The total variable overhead variance is:
A. $6,000F
B. $6,000U
C. $78,000U
D. $78,000F
E. $0
Q:
A company's flexible budget for 48,000 units of production showed variable overhead costs of $72,000 and fixed overhead costs of $64,000. The company incurred overhead costs of $122,800 while operating at a volume of 40,000 units. The total controllable cost variance is:
A. $1,200 favorable
B. $1,200 unfavorable
C. $13,200 favorable
D. $13,200 unfavorable
E. $15,200 favorable
Q:
The difference between the total budgeted overhead cost and the overhead applied to production using the predetermined overhead rate is the:
A. Production variance
B. Volume variance
C. Overhead cost variance
D. Quantity variance
E. Controllable variance
Q:
The sum of the variable overhead spending variance, the variable overhead efficiency variance, and the fixed overhead spending variance is the:
A. Production variance
B. Quantity variance
C. Volume variance
D. Price variance
E. Controllable variance
Q:
Which of the following variances is not used in a standard cost system?
A. Variable overhead spending variance.
B. Fixed overhead spending variance.
C. Variable overhead efficiency variance.
D. Fixed overhead efficiency variance.
E. Fixed overhead volume variance.
Q:
Overhead cost variance is:
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.
Q:
A company established a direct material standard of 2 pounds of material at a cost of $6 per pound for unit produced. During August the company produced 6,000 units of product; 10,000 pounds of direct material that cost $6.50 per pound were used in the production process. Compute the direct material price variance for August.
A. $5,000 unfavorable
B. $12,000 unfavorable
C. $5,000 favorable
D. $12,000 favorable
E. $7,000 favorable
Q:
A company established a direct material standard of 2 pounds of material at a cost of $6 per pound for unit produced. During August the company produced 6,000 units of product. 10,000 pounds of direct material which cost $6.50 per pound were used in the production process. Compute the direct material quantity variance for August.
A. $5,000 unfavorable
B. $12,000 unfavorable
C. $5,000 favorable
D. $12,000 favorable
E. $7,000 favorable
Q:
A company had a $56,000 unfavorable direct material quantity variance during a time period when the standard price per pound of direct material was $7 and the actual price per pound of direct material was $7.50. If the standard quantity of direct material allowed for production was 52,000 pounds, how many pounds of direct material were actually used during this period?
A. 60,000 pounds
B. 44,000 pounds
C. 56,000 pounds
D. 364,000 pounds
E. 420,000 pounds
Q:
A company had a $22,000 favorable direct labor efficiency variance during a time period when the standard rate per direct labor hour was $22 and the actual rate per direct labor hour was $21. If the standard direct labor hours allowed for production were 5,000 what is the amount of actual direct labor cost during this period?
A. $84,000
B. $88,000
C. $100,000
D. $105,000
E. $110,000
Q:
A company had a $22,000 favorable direct labor efficiency variance during a time period when the standard rate per direct labor hour was $22 and the actual rate per direct labor hour was $21. If the standard direct labor hours allowed for production were 5,000, what is the amount of actual direct labor hours worked during this period?
A. 6,000 hours
B. 4,000 hours C. 88,000 hours
D. 110,000 hours
E. 22,000 hours
Q:
Assume Martin Guitar Company has a standard of 3 hours of direct labor per unit produced and $20 per hour for the labor rate. During last period, the company used 24,000 hours of direct labor at a $456,000 total cost to produce 6,000 units. Compute the direct labor rate and efficiency variances.
A. Rate variance: $24,000 unfavorable; Efficiency variance: $120,000 favorable.
B. Rate variance: $24,000 favorable; Efficiency variance: $120,000 unfavorable.
C. Rate variance: $96,000 favorable; Efficiency variance: $96,000 unfavorable.
D. Rate variance: $120,000 favorable; Efficiency variance: $24,000 unfavorable.
E. Rate variance: $120,000 unfavorable; Efficiency variance: $24,000 unfavorable.
Q:
A company has a standard of 2 hours of direct labor per unit produced and $18 per hour for the labor rate. During last period, the company used 9,500 hours of direct labor at a $152,000 total cost to produce 4,000 units. Compute the direct labor rate and efficiency variances.
A. Rate variance: $19,000 unfavorable; Efficiency variance: $27,000 favorable.
B. Rate variance: $63,829 unfavorable; Efficiency variance: $99,000 unfavorable.
C. Rate variance: $152,000 favorable; Efficiency variance: $99,000 unfavorable.
D. Rate variance: $19,000 favorable; Efficiency variance: $27,000 unfavorable.
E. Rate variance: $152,000 unfavorable; Efficiency variance: $99,000 favorable.
Q:
The entry to record the labor costs and variances would include a:
A. debit to Goods in Process for $675,000.
B. debit to Factory Payroll for $675,000.
C. debit to Direct Labor Rate Variance.
D. debit to Direct Labor Efficiency Variance.
E. debit to Direct Labor Cost Variance.
Q:
The direct labor cost variance is:
A. $28,000 favorable
B. $28,000 unfavorable
C. $45,000 unfavorable
D. $45,000 favorable
E. $17,000 unfavorable
Q:
The direct labor rate variance is:
A. $28,000 favorable
B. $28,000 unfavorable
C. $45,000 unfavorable
D. $45,000 favorable
E. $17,000 unfavorable
Q:
The direct labor efficiency variance is:
A. $28,000 unfavorable
B. $28,000 favorable
C. $45,000 unfavorable
D. $45,000 favorable
E. $17,000 unfavorable
Q:
The standard materials cost to produce one unit of Product K is 7 pounds of material at a standard price of $32 per pound. In manufacturing 8,000 units, 54,000 pounds of material were used at a cost of $30 per pound. What is the total direct material cost variance?
A. $108,000 favorable
B. $ 64,000 favorable
C. $172,000 favorable
D. $ 44,000 favorable
E. $104,000 favorable
Q:
The standard materials cost to produce one unit of Product M is 6 pounds of material at a standard price of $50 per pound. In manufacturing 8,000 units, 47,000 pounds of material were used at a cost of $51 per pound. What is the total direct material cost variance?
A. $48,000 unfavorable
B. $51,000 favorable
C. $51,000 unfavorable
D. $ 3,000 favorable
E. $ 3,000 unfavorable
Q:
The entry to record the labor costs and variances would include a:
A. debit to Goods in Process for $198,000.
B. credit to Factory Payroll for $192,000.
C. debit to Direct Labor Cost Variance for $6,000.
D. credit to Direct Labor Cost Variance for $6,000.
E. credit to Direct Labor Efficiency Variance for $16,000
Q:
What is the total labor efficiency variance?
A. $22,000 unfavorable
B. $16,000 unfavorable
C. $6,000 unfavorable
D. $16,000 favorable
E. $22,000 favorable
Q:
What is the labor rate variance?
A. $22,000 unfavorable
B. $16,000 unfavorable
C. $6,000 unfavorable
D. $16,000 favorable
E. $22,000 favorable
Q:
What is the total labor cost variance?
A. $22,000 unfavorable
B. $16,000 unfavorable
C. $6,000 unfavorable
D. $16,000 favorable
E. $22,000 favorable
Q:
The direct materials price variance is:
A. $520 unfavorable
B. $400 unfavorable
C. $120 favorable
D. $520 favorable
E. $400 favorable
Q:
The direct materials quantity variance is:
A. $400 unfavorable
B. $120 favorable
C. $400 favorable
D. $520 favorable
E. $520 unfavorable
Q:
What is the direct materials price variance?
A. $400 unfavorable
B. $450 unfavorable
C. $2,500 unfavorable
D. $2,550 unfavorable
E. $2,950 unfavorable
Q:
What is the direct materials quantity variance?
A. $400 unfavorable
B. $450 unfavorable
C. $2,500 unfavorable
D. $2,550 unfavorable
E. $2,950 unfavorable
Q:
The following company information is available: Direct materials used for production
712 pounds Standard quantity for units produced
750 pounds Standard cost per pound of direct material
$48 Actual cost per pound of direct material
$50 The direct materials quantity variance is:
A. $1,824 favorable
B. $1,424 favorable
C. $400 favorable
D. $1,824 unfavorable
E. $1,424 unfavorable
Q:
The following company information is available: Direct materials used for production
36,000 gallons Standard quantity for units produced
34,400 gallons Standard cost per gallon of direct material
$6.00 Actual cost per gallon of direct material
$6.10 The direct materials price variance is:
A. $10,000 unfavorable B. $13,200 unfavorable
C. $9,600 unfavorable
D. $3,600 unfavorable
E. $13,200 favorable
Q:
The following company information is available: Direct materials used for production
36,000 gallons Standard quantity for units produced
34,400 gallons Standard cost per gallon of direct material
$6.00 Actual cost per gallon of direct material
$6.10 The direct materials quantity variance is:
A. $10,000 unfavorable
B. $13,200 unfavorable
C. $9,600 unfavorable
D. $3,600 unfavorable
E. $13,200 favorable
Q:
The following company information is available for January: Direct materials used
2,500 feet @ $55 per foot Standard costs for direct materials for January production
2,600 feet @ $53 per foot The direct material quantity variance is:
A. $5,000 favorable
B. $300 favorable
C. $5,300 unfavorable
D. $5,000 unfavorable
E. $5,300 favorable
Q:
The following company information is available for January: Direct materials used
2,500 feet @ $55 per foot Standard costs for direct materials for January production
2,600 feet @ $53 per foot The direct material price variance is:
A. $5,000 favorable
B. $ 300 favorable
C. $5,300 unfavorable
D. $5,000 unfavorable
E. $5,300 favorable
Q:
Use the following data to find the direct labor efficiency variance. Direct labor standard (4 hrs. @ $7/hr.) $28 per unit Actual hours worked per unit 5 hours Actual units produced 3,500 units Actual rate per hour $7.50 A. $6,125 unfavorable
B. $7,000 unfavorable
C. $7,000 favorable
D. $12,250 favorable
E. $6,125 favorable
Q:
Use the following data to find the direct labor rate variance. Direct labor standard (4 hrs. @ $7/hr.) $28 per unit Actual hours worked per unit 5 hours Actual units produced 3,500 units Actual rate per hour $7.50 A. $6,125 unfavorable
B. $7,000 unfavorable
C. $7,000 favorable
D. $12,250 favorable
E. $6,125 favorable
Q:
Bartels Corp. produces woodcarvings. It takes two hours of direct labor to produce a carving. Bartels' standard labor cost is $12 per hour. During August, Bartels produced 10,000 carvings and used 21,040 hours of direct labor at a total cost of $250,376. What is Bartels' labor cost variance for August?
A. $10,376 unfavorable
B. $2,104 unfavorable
C. $2,104 favorable
D. $12,480 unfavorable
E. $ 12,480 favorable
Q:
Bartels Corp. produces woodcarvings. It takes two hours of direct labor to produce a carving. Bartels' standard labor cost is $12 per hour. During August, Bartels produced 10,000 carvings and used 21,040 hours of direct labor at a total cost of $250,376. What is Bartels' labor efficiency variance for August?
A. $10,376 unfavorable
B. $2,104 unfavorable
C. $2,104 favorable
D. $12,480 unfavorable
E. $ 12,480 favorable
Q:
Bartels Corp. produces woodcarvings. It takes two hours of direct labor to produce a carving. Bartels' standard labor cost is $12 per hour. During August, Bartels produced 10,000 carvings and used 21,040 hours of direct labor at a total cost of $250,376. What is Bartels' labor rate variance for August?
A. $10,376 unfavorable
B. $2,104 unfavorable
C. $2,104 favorable
D. $12,480 unfavorable
E. $ 12,480 favorable
Q:
The direct materials price variance is:
A. $30,000 favorable
B. $30,000 unfavorable
C. $22,500 favorable
D. $37,500 unfavorable
E. $37,500 favorable
Q:
The direct materials quantity variance is:
A. $30,000 favorable
B. $30,000 unfavorable
C. $22,500 favorable
D. $37,500 unfavorable
E. $37,500 favorable
Q:
The entry to record the material variances would include a:
A. Credit to Goods in Process for $133,750.
B. Debit to Direct Material Price Variance for $13,750.
C. Credit to Direct Material Quantity Variance for $13,750.
D. Debit to Goods in Process for $120,000.
E. Debit to Raw Materials for $120,000.
Q:
The direct materials price variance is:
A. $13,750 unfavorable
B. $16,250 unfavorable
C. $16,250 favorable
D. $30,000 unfavorable
E. $33,000 favorable
Q:
The direct materials quantity variance is:
A. $30,000 favorable
B. $13,750 unfavorable
C. $16,250 favorable
D. $30,000 unfavorable
E. $13,750 favorable
Q:
The actual cost of the direct materials used is:
A. $133,750
B. $150,000
C. $106,250
D. $158,750
E. $120,000
Q:
Which department is often responsible for the direct materials price variance?
A. The accounting department.
B. The production department.
C. The purchasing department.
D. The finance department.
E. The budgeting department.
Q:
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?
A. $12,500
B. $25,000
C. $20,000
D. $30,000
E. $35,000
Q:
Based on predicted production of 22,000 units, a company anticipates $15,000 of fixed costs and $27,500 of variable costs. The flexible budget amounts of fixed and variable costs for 16,000 units are:
A. $10,910 fixed and $20,000 variable.
B. $10,910 fixed and $27,500 variable.
C. $20,000 fixed and $15,000 variable.
D. $15,000 fixed and $20,000 variable.
E. $15,000 fixed and $27,500 variable.
Q:
Based on predicted production of 12,000 units, a company anticipates $150,000 of fixed costs and $123,000 of variable costs. The flexible budget amounts of fixed and variable costs for 10,000 units are:
A. $125,000 fixed and $102,500 variable.
B. $125,000 fixed and $123,000 variable.
C. $102,500 fixed and $150,000 variable.
D. $150,000 fixed and $123,000 variable.
E. $150,000 fixed and $102,500 variable.
Q:
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:
A. $2,667
B. $14,000
C. $18,667
D. $24,000
E. $35,000
Q:
A flexible budget is prepared:
A. Before the operating period only.
B. After the operating period only.
C. During the operating period only.
D. At any time in the planning period.
E. A flexible budget should never be prepared.
Q:
Sales analysis is useful for:
A. Planning purposes only.
B. Budgeting purposes only.
C. Control purposes only.
D. Planning and control purposes.
E. Planning and budgeting purposes.
Q:
A performance report compares the differences between:
A. Actual results and predicted results.
B. Actual results over several periods.
C. Predicted results over several periods.
D. Predicted results over several levels of activity.
E. Predicted results and standard results.
Q:
An internal report that compares actual cost and sales amounts with budgeted amounts and identifies the differences between them as favorable or unfavorable variances is called a:
A. Performance report.
B. Production report.
C. Budget report.
D. Variance report.
E. Standard report.
Q:
Variable budget is another name for:
A. Cash budget.
B. Flexible budget.
C. Fixed budget.
D. Manufacturing budget.
E. Rolling budget.
Q:
Static budget is another name for:
A. Standard budget.
B. Flexible budget.
C. Variable budget.
D. Fixed budget.
E. Rolling budget.
Q:
An internal report that helps management analyze the difference between actual performance and budgeted performance based on the actual sales volume (or other level of activity) and that presents the differences between actual and budgeted amounts as variances is called a(n):
A. Sales budget performance report.
B. Flexible budget performance report.
C. Master budget performance report.
D. Static budget performance report.
E. Operating budget performance report.
Q:
A report based on predicted amounts of revenues and expenses corresponding to the actual level of output is called a:
A. Rolling budget.
B. Production budget.
C. Flexible budget.
D. Merchandise purchases budget.
E. Fixed budget.
Q:
A planning budget based on a single predicted amount of sales or production volume is called a:
A. Sales budget.
B. Standard budget.
C. Flexible budget.
D. Fixed budget.
E. Variable budget.
Q:
An analytical technique used by management to focus on the most significant variances and give less attention to the areas where performance is satisfactory is known as:
A. Controllable management.
B. Management by variance.
C. Performance management.
D. Management by objectives.
E. Management by exception.
Q:
A process of examining the differences between actual and budgeted costs and describing them in terms of the amounts that resulted from price and quantity differences is called:
A. Cost analysis.
B. Flexible budgeting.
C. Variable analysis.
D. Cost variable analysis.
E. Cost variance analysis.
Q:
The difference between the actual cost incurred and the standard cost is called the:
A. Flexible variance.
B. Price variance.
C. Cost variance.
D. Controllable variance.
E. Volume variance.
Q:
The difference between actual and standard cost caused by the difference between the actual quantity and the standard quantity is called the:
A. Controllable variance.
B. Standard variance.
C. Budget variance.
D. Quantity variance.
E. Price variance.
Q:
The difference between actual and standard cost caused by the difference between the actual price and the standard price is called the:
A. Standard variance.
B. Quantity variance.
C. Volume variance.
D. Controllable variance.
E. Price variance.
Q:
Standard costs are used to measure:
A. Price and quantity variances.
B. Price variances only.
C. Quantity variances only.
D. Price, quantity, and sales variances.
E. Quantity and sales variances.
Q:
The costs that should be incurred under normal conditions to produce a specific product or component or to perform a specific service are:
A. Variable costs.
B. Fixed costs.
C. Standard costs.
D. Product costs.
E. Period costs.
Q:
Standard costs are:
A. Actual costs incurred to produce a specific product or perform a service.
B. Preset costs for delivering a product or service under normal conditions.
C. Established by the IMA.
D. Rarely achieved.
E. Uniform among companies within an industry.
Q:
If cost variances are material, they should always be closed directly to Cost of Goods Sold.
Q:
An unfavorable variance is recorded with a debit.
Q:
A volume variance is the difference between overhead at maximum production volume and that at the budgeted production volume.
Q:
One possible explanation for direct labor rate and efficiency variances is the use of workers with different skill levels.
Q:
A favorable direct materials price variance might lead to an unfavorable direct materials quantity variance because the company purchased cheap materials.
Q:
When the actual cost of direct materials used exceeds the standard cost, the company must have experienced an unfavorable direct materials price variance.