ACCT 308 - Test 3

3. When computing variances related to a flexible budget, a favorable (F) variance causes a(n) A. decrease in operating income compared to the master budget. B. increase in operating income compared to the master budget. C. decrease in sales revenue compared to the master budget. D. increase in sales revenue compared to the master budget.

B. increase in operating income compared to the master budget.

15. Kingston Company produces a hover board, which has standard requirements of two hours per board at a direct labor rate per hour of $18. In the last quarter, 2,000 hover boards were produced using 4,200 direct labor hours at rate of $19.00 per hour. The direct labor (DL) rate variance for last quarter was A. $4,200 unfavorable. B. $7,200 favorable. C. $3,600 unfavorable. D. $3,600 favorable.

A. $4,200 unfavorable. Solution: Direct Labor (DL) Rate Variance = AQ(SP - AP); 4,200($18 - $19) = $4,200 Unfavorable

9. Which type of chart would best to compare values (not percentages) to one another? A. Bar chart. B. Pie chart. C. Time series graph. D. Data dashboard.

A. Bar chart

what's the difference between data and information? A. Data is a building block, requiring organization, context, and refinement to be useful. Information is processed data, with organization and structure, capable of being useful. B. Information is a building block, requiring organization, context, and refinement to be useful. Data is processed information, with organization and structure, capable of being useful. C. Information is structured and data is unstructured. D. Data is hard and information is soft.

A. Data is a building block, requiring organization, context, and refinement to be useful. Information is processed data, with organization and structure, capable of being useful.

8. Data visualizations typically represent which type of data analytics techniques? A. Descriptive analytics. B. Diagnostic analytics. C. Predictive analytics. D. Prescriptive analytics.

A. Descriptive analytics

6. Which of the following variances holds the volume constant between actual and flexible budget, and highlights the price difference between actual and budget? A. Flexible budget variance B. Master budget variance C. Sales activity variance D. Manufacturing overhead (MOH) efficiency variance

A. Flexible budget variance

7. Standard costing uses _________ costs set at the _________ level as product costs in the general ledger. A. actual; unit B. budgeted; unit C. actual; total D. budgeted; total

B. budgeted; unit

1. Describe a situation in which the sales value at split off method cannot be used but the NRV method can be used for joint-cost allocation. A. This situation can occur when a production process yields separable outputs at the splitoff point that do not have selling prices available until further processing. The result is that selling prices are not available at the splitoff point to use the sales value at splitoff method. Examples include processing in integrated pulp and paper companies and in​ petro-chemical operations. B. This situation can occur when a production process yields separable outputs at the spiltoff point where each product has a selling price. The company will then determine the NRV based on the selling price. An example is a dairy purchases raw milk from individual farms and processes it until the splitoff​ point, when two​ products, cream and liquid skim emerge. C. This situation can occur when a production process allocates joint costs to joint products produced during the accounting period on the basis of a comparable physical​ measure, such as the relative​ weight, quantity, or volume at the splitoff point. The result is that selling prices at the splitoff point are not available. Examples include a gold mine that extracts ore containing​ gold, silver, and lead. Use of a common physical measure​ (tons) would result in almost all costs being allocated to​ lead, the product that weighs the most but has the lowest​ revenue-generating power. D. None of the above are correct.

A. This situation can occur when a production process yields separable outputs at the splitoff point that do not have selling prices available until further processing. The result is that selling prices are not available at the splitoff point to use the sales value at splitoff method. Examples include processing in integrated pulp and paper companies and in​ petro-chemical operations.

2. Big data is the structured and unstructured data generated from a variety of sources in volumes too large for traditional technologies to capture, manage, and process in a timely manner? A. True B. False

A. True

20. A budget is the quantitative expression of a proposed plan of action by management for a specified period. A. True B. False

A. True

9. A price variance compares the A. actual cost incurred for the input (DM, DL, or variable-MOH) to the standard cost allowed for the actual input quantity. B. actual cost incurred for the input (DM, DL, or variable-MOH) to the standard cost allowed for the standard input quantity. C. actual quantity used of each input (DM, DL, or variable-MOH) to the standard quantity allowed for each input, at its standard cost. D. actual quantity used of each input (DM, DL, or variable MOH) to the standard quantity allowed for each input, at its actual cost.

A. actual cost incurred for the input (DM, DL, or variable-MOH) to the standard cost allowed for the actual input quantity.

2. When management sets expectations that are high, achievable, and clearly communicated A. unfavorable variances will always result. B. employees will normally work to reach the high standards if they feel the company is committed to their success. C. poor employee performance evaluations will happen, and workers miss out on expected incentives. D. flexibility and creativity for employees is stifled.

B. employees will normally work to reach the high standards if they feel the company is committed to their success.

12. Kidzlane has direct materials (DM) standards of 2 pounds per unit at $4 per pound for its most popular toy. Last month, 5,600 pounds of direct materials that actually cost $28,000 were purchased and used to produce 3,000 toy units. The direct materials (DM) efficiency variance for last month was A. $1,600 unfavorable. B. $1,600 favorable. C. $5,600 unfavorable. D. $5,600 favorable.

B. $1,600 favorable. Solution: DM Efficiency Variance = SP(SQA - AQu) = $4[(3,000 x 2) - 5,600] = $1,600 Favorable

5. Fern's Florist has a Flexible Budget Variance of $15, favorable and a Sales Activity Variance of $25, unfavorable. What is Fern's Florist's Master Budget Variance? A. $10 favorable B. $10 unfavorable C. $40 unfavorable D. Cannot be determined; not enough information given.

B. $10 unfavorable

11. Which variance helps management address what quantity of direct material (DM) inputs should have been used in making the actual volume of units? A. Direct material (DM) price variance B. Direct material (DM) efficiency variance C. Direct labor (DL) price variance D. Direct labor (DL) efficiency variance

B. Direct material (DM) efficiency variance

19. Research shows that the performance of employees falls when they are asked to adhere to specific, challenging budgets, even if they set obtainable goals. A. True B. False

B. False

1. Which of the following depicts how organizations use budgets and variance analysis to attain their goals? A. Troubleshoot and Plan → Benchmark and Control → Evaluate Performance and Motivate B. Motivate and Benchmark → Plan and Control → Evaluate Performance and Troubleshoot C. Plan and Control → Evaluate Performance and Benchmark → Motivate and Troubleshoot D. Plan and Control → Evaluate Performance and Troubleshoot → Motivate and Benchmark

B. Motivate and Benchmark → Plan and Control → Evaluate Performance and Troubleshoot

10. Which type of chart would best show the contribution of multiple groups to a total? A. Bar chart. B. Pie chart. C. Time series graph. D. Data dashboard.

B. Pie chart

8. Which of the following shows the required quantities and current prices of manufacturing costs for each input: direct materials, direct labor, variable manufacturing overhead and fixed manufacturing overhead? A. Bill of materials B. Standard cost card C. Variance analysis D. Job cost sheet

B. Standard cost card

17. The direct labor (DL) rate variance for Vellux Manufacturers is $15,600 unfavorable. The standard number of hours worked was 10,000 and the standard rate per hour for direct labor was $14. If the actual direct labor hours were 12,000, what was the actual rate per direct labor hour? A. $7.80 B. $12.70 C. $15.30 D. $17.50

C. $15.30 Solution: DL rate Variance, $15,600 U = AQ(SP - AP) = 12,000 ($14 - AP); AP = $15.30

14. Kingston Company produces a hover board, which has standard requirements of two hours per board at a direct labor rate per hour of $18. In the last quarter, 2,000 hover boards were produced using 4,200 direct labor hours at rate of $19.00 per hour. The direct labor (DL) efficiency variance for last quarter was A. $7,200 unfavorable. B. $7,200 favorable. C. $3,600 unfavorable. D. $3,600 favorable.

C. $3,600 unfavorable. Solution: Direct Labor (DL) Efficiency Variance = SP(SQA - AQ); $18[(2,000 x 2) - 4,200] = $3,600 Unfavorable

13. Kidzlane has direct materials (DM) standards of 2 pounds per unit at $4 per pound for its most popular toy. Last month, 5,600 pounds of direct materials that actually cost $28,000 were purchased and used to produce 3,000 toy units. The direct materials (DM) price variance for last month was A. $1,600 unfavorable. B. $1,600 favorable. C. $5,600 unfavorable. D. $5,600 favorable.

C. $5,600 unfavorable. Solution: DM Price Variance = AQp(SP - AP) = 5,600[($4 - ($28,000 / 5,600)] = $1,600 Favorable

16. Venda Company purchased and used 40,000 pound of materials in production. It paid $6.00 per pound for these materials. If the direct materials (DM) price variance was $50,000 favorable, what was the standard price per pound? A. $4.25 B. $5.75 C. $7.25 D. $9.30

C. $7.25 Solution: DM Price Variance, $50,000 F = AQ(SP - AP) = 40,000(SP - $6.00); SP = $7.25

18. Which of the following can be a reason for a favorable price variance for direct materials? A. An unexpected increase in the price of materials B. Less amount of material used during production than planned for actual output C. A decrease in the price of materials due to an oversupply of materials D. Workers taking less time to produce the products than was expected

C. A decrease in the price of materials due to an oversupply of materials

3. Which of the following laws applies to the protection of healthcare data? A. FERPA B. Gramm Leach Bliley Act C. HIPPA. D. Sarbanes-Oxley Act.

C. HIPPA

5. Which of the following data analytics techniques uses data to forecast what will happen next? A. Descriptive analytics. B. Diagnostic analytics. C. Predictive analytics. D. Prescriptive analytics.

C. Predictive analytics

6. Which of the following data analytics techniques uses data to predict what will happen next? A. Descriptive analytics. B. Diagnostic analytics. C. Predictive analytics. D. Prescriptive analytics.

C. Predictive analytics

7. Regression analysis is a form of which type of data analytics? A. Descriptive analytics. B. Diagnostic analytics. C. Predictive analytics. D. Prescriptive analytics.

C. Predictive analytics

1. The production method of accounting for byproducts: A. Recognizes the sales value of the byproduct at the time of sale as 'other revenue' B. Recognizes revenues from the sale of the byproducts when they are sold C. Recognizes the value of the byproduct as an offset against costs of the main product D. Deducts the sales value of the byproduct from cost of goods sold at the time of sale

C. Recognizes the value of the byproduct as an offset against costs of the main product

10. An efficiency variance compares the A. actual quantity used of each input (DM, DL, or variable MOH) to the standard quantity allowed for each input, at its actual cost. B. actual cost incurred for the input (DM, DL, or variable-MOH) to the standard cost allowed for the actual input quantity. C. actual quantity used of each input (DM, DL, or variable-MOH) to the standard quantity allowed for each input, at its standard cost. D. actual cost incurred for the input (DM, DL, or variable-MOH) to the standard cost allowed for the standard input quantity.

C. actual quantity used of each input (DM, DL, or variable-MOH) to the standard quantity allowed for each input, at its standard cost.

1. The Berkel Corporation manufactures Widgets, Gizmos, and Turnbols from a joint process. June production is 7,000 widgets; 10,750 gizmos; and 12,000 turnbols. Respective per unit selling prices at split-off are $75, $45, and $20. Joint costs up to the split-off point are $191,000. If joint costs are allocated based upon the sales value at split-off method, what amount of joint costs will be allocated to the widgets? (Do not round any intermediary calculations.) A. $36,709 B. $29,214 C. $73,991 D. $80,300

D. $80,300 Widgets (75)7,000 = 525,000 Gizmos (45)10,750 = 483,750 Turnbols (20)12,000 = 240,000 1,248,750 (525,000 / 1,248,750) $191,000 = $80,300.30

4. Which of the following data analytics techniques uses data to explain what a decision-maker should do in the future? A. Descriptive analytics. B. Diagnostic analytics. C. Predictive analytics. D. Prescriptive analytics.

D. Prescriptive analytics

4. The variance that highlights the difference between actual sales volume and the master budget (i.e. static budget) sales volume is the A. MOH volume variance. B. Master budget variance. C. Flexible budget variance. D. Sales activity variance.

D. Sales activity variance.