Question 1

A variance that occurs when actual expenses are less than budgeted expenses

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Question 2

The following data for the Hermit Company pertain to the produc?tion of 2,000 clay pigeons during July: Standard variable-overhead cost: $6.00 per pound of clay.
Total actual variable-overhead cost: $11,000.
Standard variable-overhead cost allowed for units produced was $12,000.
Variable-overhead efficiency variance was $240 unfavorable.
_____ is the variable-overhead flexible-budget variance.
A)$1,000 favorable
B)$240 unfavorable
C)$1,280 favorable
D)$1,000 unfavorable

Accepted Answer

The answer of The following data for the Hermit Company...

Question 3

A budget based on budgeted costs for each activity and related cost driver

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Question 4

The following data for the Glass Company pertain to the produc?tion of 2,000 bottles during June: Standard variable-overhead cost: $26.00 per pound of glass.
Total actual variable-overhead cost: $24,800.
Standard variable-overhead cost allowed for units produced was $26,000.
Variable-overhead efficiency variance was $540 unfavorable.
_____ is standard direct-material amount per bottle.
A).50 pound
B)2.80 pounds
C)13.00 pounds
D)None of these answers is correct

Accepted Answer

The standard variable-overhead cost allowed for units produced is $26,000, and the standard cost per pound is $26.00. Therefore, the standard amount of glass used is $26,000 / $26.00 = 1,000 pounds. For 2,000 bottles, the standard direct-material amount per bottle is 1,000 pounds / 2,000 bottles = 0.50 pounds.

Question 5

In a manufacturing area of an organization, poor product design, problems with the quality of materials, and scheduling conflicts will, more than likely, result in a n) _____ materials efficiency variance.
A)favorable
B)unfavorable
C)favorable.
D)unfavorable.

Accepted Answer

Poor product design, problems with the quality of materials, and scheduling conflicts are likely to result in an unfavorable materials efficiency variance. This means that the organization is using more materials than planned to produce the same amount of goods, resulting in higher costs and lower profitability.

Question 6

Levels of performance that can be achieved by realistic levels of effort

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Question 7

Differences between the static-budget amounts and the flexible budget

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Question 8

The following data for the Popular Company pertain to the produc?tion of 2,000 clay pigeons during July: Standard variable-overhead cost was $6.00 per pound of clay.
Total actual variable-overhead cost was $18,200.
Standard variable-overhead cost allowed for units produced was $20,000.
Variable overhead-efficiency variance was $740 unfavorable.
_____ is standard direct-material amount per clay pigeon.
A)1.67 pound
B)3.50 pounds
C)6.00 pounds
D)10.00 pounds

Accepted Answer

To find the standard direct-material amount per clay pigeon, we need to use the information on the standard variable-overhead cost per pound of clay:

Standard variable-overhead cost = $6.00 per pound of clay
Total actual variable-overhead cost = $18,200
Standard variable-overhead cost allowed = $20,000

We can use these numbers to calculate the standard direct-material amount per clay pigeon:

$20,000 / $6.00 per pound of clay = 3,333.33 pounds of clay allowed
3,333.33 pounds of clay allowed / 2,000 clay pigeons = 1.67 pounds of clay per pigeon

Therefore, the standard direct-material amount per clay pigeon is 1.67 pounds (choice A).

Question 9

Actual expenses are greater than budgeted expenses

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Question 10

This is the difference between the quantity of inputs actually used and the quantity of inputs that should have been used to achieve the actual quantity of output multiplied by the expected price of the input

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Question 11

Expressions of the most efficient performance possible under the best conceivable conditions

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Question 12

The difference between actual input prices and expected input prices multiplied by the actual quantity of inputs used

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Question 13

This variance measures how effective managers have been in meeting the planned sales objective.

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Question 14

The following data for the Safety Company pertain to the produc?tion of 3,000 clay pigeons during July: Standard variable-overhead cost was $5.00 per pound of clay.
Total actual variable-overhead cost was $11,340.
Standard variable-overhead cost allowed for units produced was $12,000.
Variable-overhead efficiency variance was $340 unfavorable.
_____ is the variable-overhead rate variance.
A)$560 unfavorable
B)$800 favorable
C)$800 unfavorable
D)$1,000 favorable

Accepted Answer

The answer of The following data for the Safety Company...

Question 15

A budget that is based on only one level of activity

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Question 16

Actual output in units measured in standard direct-labor hours

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Question 17

The following data for the See Through Company pertain to the produc?tion of 1,000 bottles during June: Standard variable-overhead cost: $26.00 per pound of glass.
Total actual variable-overhead cost: $24,800.
Standard variable-overhead cost allowed for units produced was $26,000.
Variable-overhead efficiency variance was $740 unfavorable.
_____ is the variable-overhead rate variance.
A)$1,260 unfavorable
B)$1,200 favorable
C)$1,200 unfavorable
D)$1,940 favorable

Accepted Answer

The answer of The following data for the See Through...

Question 18

Variances between the flexible budget and actual results

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Question 19

This is another name for the flexible budget

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Question 20

The difference between the actual results and the master budget

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Quiz 8: Flexible Budgets and Variance Analysis