ACC 350 Week 8 Quiz – Strayer
Click on the Link Below to Purchase A+ Graded Course Material
http://budapp.net/ACC-350-Week-8-Quiz-Strayer-345.htm
Quiz 6 Chapter 7
Flexible Budgets, Direct-Cost Variances, and Management Control
1)
The master budget is one type of flexible budget.
2)
A flexible budget is calculated at the start of the budget period.
3)
Information regarding the causes of variances is provided when the master budget is compared with actual results.
4)
A variance is the difference between the actual cost for the current and previous year.
5)
A favorable variance results when budgeted revenues exceed actual revenues.
6)
Management by exception is the practice of concentrating on areas not operating as anticipated (such as a cost overrun) and placing less attention on areas operating as anticipated.
7)
The essence of variance analysis is to capture a departure from what was expected.
8)
A favorable variance should be ignored by management.
9)
An unfavorable variance may be due to poor planning rather than due to inefficiency.
10)
The only difference between the static budget and flexible budget is that the static budget is prepared using planned output.
11)
The static-budget variance can be subdivided into the flexible-budget variance and the sales-volume variance.
12)
The flexible-budget variance may be the result of inaccurate forecasting of units sold.
13)
Decreasing demand for a product may create a favorable sales-volume variance.
14)
An unfavorable variance is conclusive evidence of poor performance.
15)
A company would not need to use a flexible budget if it had perfect foresight about actual output units.
16)
The flexible-budget variance pertaining to revenues is often called a selling-price variance.
17)
Cost control is the focus of the sales-volume variance.
18)
The term efficiency variance is the direct-cost portion of the flexible-budget variance.
19)
Managers generally have more control over efficiency variances than price variances.
20)
To prepare budgets based on actual data from past periods is preferred since past inefficiencies are excluded.
21)
All budgets are based on standard costs.
22)
A standard is attainable through efficient operations but allows for normal disruptions such as machine breakdowns and defective production.
23)
One advantage of using standard times to develop a budget is they are simple to compile, are based solely on the past actual history, and do not require expected future changes to be taken into account.
24)
The presumed cause of a material price variance will determine how a company responds.
25)
The price variance is the difference between the actual price and the budgeted price of the input, multiplied by the actual quantity of input.
26)
For any actual level of output, the efficiency variance is the difference between actual quantity of input used and the budgeted quantity of input allowed to produce actual output, multiplied by the actual price.
27)
The use of high-quality raw materials is likely to result in a favorable efficiency variance and an unfavorable price variance.
28)
The direct manufacturing labor price variance is likely to be favorable if higher-skilled workers are put on a job.
29)
Although computed separately, price variances and efficiency variances should not be analyzed separately from each other.
30)
A favorable variance can be automatically interpreted as "good news."
31)
Variances often affect each other.
32)
If variance analysis is used for performance evaluation, managers are encouraged to meet targets using creativity and resourcefulness.
33)
When using variance for performance evaluation, managers often focus on effectiveness and efficiency as two of the common attributes used in comparing expected results with actual results.
34)
For critical items such as product defects, a small variance may prompt investigation.
35)
A particular variance generally signals one particular problem.
36)
If budgets contain slack, cost variances will tend to be favorable.
37)
Continuous improvement budgeted costs target price reductions and efficiency improvements.
38)
Improvement opportunities are easier to identify when products have been on the market for a considerable period of time.
39)
It is best to rely totally on financial performance measures rather than using a combination of financial and nonfinancial performance measures.
40)
From the perspective of control, the direct materials price variance should be isolated at the time the direct materials are requisitioned for use.
41)
The goal of variance analysis is for managers to understand why variances arise, to learn, and to improve future performance.
42)
Employees logging in to production floor terminals and other modern technologies greatly facilitate the use of a standard costing system.
43)
Performance variance analysis can be used in activity-based costing systems.
44)
Price variances can be calculated for batch-level costs as well as for output unit-level costs.
45)
Benchmarking is the continuous process of measuring products, services, and activities against the best possible levels of performance, either inside or outside the organization.
46)
When benchmarking, the best levels of performance are typically found in companies that are totally different.
47)
One problem with benchmarking is ensuring that numbers are comparable.
48)
When benchmarking it is best when management accountants simply analyze the costs and allow management to provide the insight as to why the revenues and costs differ between companies.
49)
The master budget is:
A)
a flexible budget
B)
a static budget
C)
developed at the end of the period
D)
based on the actual level of output
50)
A flexible budget:
A)
is another name for management by exception
B)
is developed at the end of the period
C)
is based on the budgeted level of output
D)
provides favorable operating results
51)
Management by exception is the practice of concentrating on:
A)
the master budget
B)
areas not operating as anticipated
C)
favorable variances
D)
unfavorable variances
52)
A variance is:
A)
the gap between an actual result and a benchmark amount
B)
the required number of inputs for one standard output
C)
the difference between an actual result and a budgeted amount
D)
the difference between a budgeted amount and a standard amount
53)
An unfavorable variance indicates that:
A)
actual costs are less than budgeted costs
B)
actual revenues exceed budgeted revenues
C)
the actual amount decreased operating income relative to the budgeted amount
D)
All of these answers are correct.
54)
A favorable variance indicates that:
A)
budgeted costs are less than actual costs
B)
actual revenues exceed budgeted revenues
C)
the actual amount decreased operating income relative to the budgeted amount
D)
All of these answers are correct.
Answer the following questions using the information below:
Abernathy Corporation used the following data to evaluate their current operating system. The company sells items for $10 each and used a budgeted selling price of $10 per unit.
Actual Budgeted
Units sold 92,000 units 90,000 units
Variable costs $450,800 $432,000
Fixed costs $ 95,000 $100,000
55)
What is the static-budget variance of revenues?
A)
$20,000 favorable
B)
$20,000 unfavorable
C)
$2,000 favorable
D)
$2,000 unfavorable
56)
What is the static-budget variance of variable costs?
A)
$1,200 favorable
B)
$18,800 unfavorable
C)
$20,000 favorable
D)
$1,200 unfavorable
57)
What is the static-budget variance of operating income?
A)
$3,800 favorable
B)
$3,800 unfavorable
C)
$6,200 favorable
D)
$6,200 unfavorable
Answer the following questions using the information below:
Bates Corporation used the following data to evaluate their current operating system. The company sells items for $10 each and used a budgeted selling price of $10 per unit.
Actual Budgeted
Units sold 495,000 units 500,000 units
Variable costs $1,250,000 $1,500,000
Fixed costs $ 925,000 $ 900,000
58)
What is the static-budget variance of revenues?
A)
$50,000 favorable
B)
$50,000 unfavorable
C)
$5,000 favorable
D)
$5,000 unfavorable
59)
What is the static-budget variance of variable costs?
A)
$200,000 favorable
B)
$50,000 unfavorable
C)
$250,000 favorable
D)
$250,000 unfavorable
60)
What is the static-budget variance of operating income?
A)
$175,000 favorable
B)
$195,000 unfavorable
C)
$225,000 favorable
D)
$325,000 unfavorable
Answer the following questions using the information below:
Racine Filter Corporation used the following data to evaluate their current operating system. The company sells items for $14.50 each and had used a budgeted selling price of $15 per unit.
Actual Budgeted
Units sold 206,000 units 200,000 units
Variable costs $965,000 $950,000
Fixed costs $ 53,000 $ 50,000
61)
What is the static-budget variance of revenues?
A)
$90,000 favorable
B)
$13,000 favorable
C)
$13,000 unfavorable
D)
$6,000 favorable
62)
What is the static-budget variance of variable costs?
A)
$13,000 favorable
B)
$13,000 unfavorable
C)
$15,000 favorable
D)
$15,000 unfavorable
63)
What is the static-budget variance of operating income?
A)
$31,000 unfavorable
B)
$26,000 favorable
C)
$28,000 favorable
D)
$28,000 unfavorable
64)
Regier Company had planned for operating income of $10 million in the master budget but actu
No comments:
Post a Comment