FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 23: Flexible Budgets and Standard Costs

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 71

Short Answer

Review LaterAdd Note

Review Later

Presented below are terms preceded by letters a through h and followed by a list of definitions 1 through 8.Enter the letter of the term with the definition,using the space preceding the definition. (a)Unfavorable variance (b)Fixed budget performance report (c)Overhead cost variance (d)Budgetary control (e)Spending variance (f)Flexible budget performance report (g)Quantity variance (h)Favorable variance __________(1)Difference in sales or costs,when the actual value is compared to the budgeted value,that contributes to a lower income. __________(2)A report that compares results with fixed budgeted amounts and identifies the differences as favorable or unfavorable variances. __________(3)The difference between the actual price of an item and its standard price. __________(4)Difference in sales or costs,when the actual value is compared to the budgeted value,that contributes to a higher income. __________(5)Use of budgets by management to monitor and control the operations of a company. __________(6)Difference between actual quantity of an input and the standard quantity of the input. __________(7)Difference between the total overhead cost applied to products and the total overhead cost actually incurred. __________(8)A report that compares actual revenues and costs with their variable budgeted amounts based on actual sales volume (or other level of activity)and identifies the differences as variances.

Correct Answer

verified

1.A; 2.B; ...

View Answer

Show Answer

Question 72

True/False

Review LaterAdd Note

Review Later

Fixed budgets are also known as flexible budgets.

A) True
B) False

Correct Answer

verified

Show Answer

Question 73

True/False

Review LaterAdd Note

Another name for a static budget is a variable budget.

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:

Landlubber Company established a standard direct materials cost of 1.5 gallons at $2 per gallon for one unit of its product.During the past month,actual production was 6,500 units.The material quantity variance was $700 favorable and the material price variance was $470 unfavorable.The entry to charge Goods in Process Inventory for the standard material costs during the month and to record the direct material variances in the accounts would include:

A favorable variance for a cost means that when compared to the budget,the actual cost is ____________________ than the budgeted cost.

Cabot Company collected the following data regarding production of one of its products.Compute the variable overhead efficiency variance.

Identify the situation that will result in a favorable variance.

Flexible budgets may be prepared before or after an actual period of activity.Why would management prepare such budgets at differing time frames?

Calais Company's fixed budget for the first quarter of the calendar year appears below.Prepare flexible budgets that show variable costs per unit,fixed costs and two different flexible budgets for sales volumes of 22,000 and 24,000.

Thomas Co.provides the following fixed budget data for the year: Required: Prepare a flexible budget performance report for the year using the contribution margin format.

If actual price per unit of materials is greater than the standard price per unit of materials,the direct materials price variance is _______________________.

Jacques Company planned to use 18,000 pounds of material costing $2.50 per pound to make 4,000 units of its product.In actually making 4,000 units,the company used 18,800 pounds that cost $2.54 per pound.Calculate the direct materials price variance.

In producing 700 units of Product CBA last period,Cobalt Company used 5,000 pounds of Material H,costing $34,250.The company has established the standard of using 7.2 pounds of Material H per unit of CBA,at a price of $7.50 per pound.Calculate the materials price and quantity variances associated with producing the 700 units,and indicate whether they are favorable or unfavorable:

A company has established 5 pounds of Material M at $2 per pound as the standard for the material in its Product A.The company has just produced 1,000 units of this product,using 5,200 pounds of Material M that cost $9,880.The direct materials quantity variance is:

Duval,Inc.budgets direct materials at $1/liter and each product requires 4 liters per unit of finished product.April's activities show usage of 832 liters to complete 196 units at a cost of $798.72.Compute the direct materials price and quantity variances.Indicate if the variance if favorable or unfavorable.

Cabot Company collected the following data regarding production of one of its products.Compute the direct labor rate variance.

A company uses the following standard costs to produce a single unit of output. $\begin{array} { l l l l } \text { Direct materals } & 6 \text { pourds at } \$ 0.90 \text { per pound } & = & \$ 5.40 \\\text { Direct labor } & 0.5 \text { hour at } \$ 12.00 \text { per hour } & = & \$ 6.00 \\\text { Marufacturing overhead } & 0.5 \text { hour at } \$ 4.80 \text { per hour } & = &\$ 2.40\end{array}$ During the latest month,the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output.Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked.Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400.Based on this information,the direct labor rate variance for the month was:

Bok Company's output for the current period was assigned a $200,000 standard direct materials cost.The direct materials variances included a $5,000 favorable price variance and a $3,000 unfavorable quantity variance.What is the actual total direct materials cost for the current period?

Cost variances are ignored under management by exception.