acct 311

Immediate corrective actions can generally be taken for ______ variances which occur frequently and are easily corrected as soon as they are discovered.

usage efficiency

When recording the entry for the use of raw materials, the ______ inventory account is debited.

work-in-process

When recording the purchase of raw materials at standard cost, the entry includes a ______.

a debit to materials inventory a credit to accounts payable

True or false: Investigating variances that are not controllable in the short-run normally have high benefits to a company.

false Reason: Investigating variances that are uncontrollable in the short-run have low benefits.

When a company uses variable costing, the entire___production cost is expensed

fixed

The likely monetary affect from an activity such as a variance is called the____of the activity,

impact

The components of the sales activity variance are the sales___variance and the sales____variance.

quantity mix

Differences in sales and production units do NOT impact the ______ variances.

sales activity sales price marketing & administrative

When a company sells multiple products that are imperfect substitutes for each other, the result can be a(n)___variance

sales mix

The variance that occurs in multi-product companies from the change in volume of sales, independent of change in sales mix is called the____variance

sales quantity

Typical types of outputs used by service organizations for profit variance analysis include ______.

staff hours patient days

Addams, Inc. produces water sealant that is made from two chemicals: A20 standard cost per unit of finished product 0.7 gallon @ $4.00 = $2.80 B15 standard cost per unit of finished product 0.3 gallon @ $9.00 = $2.70 Last month Addams produced 55,000 gallons of the water sealant using the following: A20 material purchased and used 40,000 gallons @ $4.25 B15 material purchased and used 20,000 gallons @ $10.00 Calculate A20s purchase price variance. Multiple choice question. $10,000 unfavorable $9,625 unfavorable $10,000 favorable $9,625 favorable

$10,000 unfavorable Reason: ($4.25 x 40,000) - ($4.00 x 40,000) = $10,000 U

Addams, Inc. produces water sealant that is made from two chemicals: A20 standard cost per unit of finished product 0.7 gallon @ $4.00 = $2.80 B15 standard cost per unit of finished product 0.3 gallon @ $9.00 = $2.70 Last month Addams produced 55,000 gallons of the water sealant using the following: A20 material purchased and used 40,000 gallons @ $4.25 B15 material purchased and used 20,000 gallons @ $10.00 Calculate A20s yield variance. Multiple choice question. $8,000 favorable $14,000 favorable $8,000 unfavorable $14,000 unfavorable

$14,000 unfavorable Reason: ($4.00 x.7 x 60,000) - ($4.00 x.7 x 55,000) = $14,000 U

Addams, Inc. produces water sealant that is made from two chemicals: A20 standard cost per unit of finished product 0.7 gallon @ $4.00 = $2.80 B15 standard cost per unit of finished product 0.3 gallon @ $9.00 = $2.70 Last month Addams produced 55,000 gallons of the water sealant using the following: A20 material purchased and used 40,000 gallons @ $4.25 B15 material purchased and used 20,000 gallons @ $10.00 Calculate A20s yield variance. Multiple choice question. $8,000 unfavorable $14,000 favorable $8,000 favorable $14,000 unfavorable

$14,000 unfavorable Reason: ($4.00 x.7 x 60,000) - ($4.00 x.7 x 55,000) = $14,000 U

Given the following information, calculate the purchasing department's price variance. Standard number of transactions per day 20 Standard labor cost per day $200 Actual number of days for processing transactions 120 Actual number of transactions processed 1,960 Actual labor cost per day $180 Multiple choice question. $2,000 favorable $2,400 favorable $2,000 unfavorable $2,400 unfavorable

$2,400 favorable (180*120 vs 200*120)

Given the following information, calculate the purchasing department's efficiency variance. Standard number of transaction per day 20 Standard labor cost per day $200 Actual number of days for processing transactions 120 Actual number of transactions processed 1,960 Actual labor cost per day $180 Multiple choice question. $4,400 unfavorable $2,400 favorable $2,400 unfavorable $4,400 favorable

$4,400 unfavorable Reason: ($200/day x 120 days) - ($200/day x 1,960/20) = $4,400 U

A company budgets 1,000 hours for a service job using a partner for 200 hours and staff for the remaining hours at $400 and $100 respectively. Due to scheduling issues, the partners works 400 hours on the job while staff work 600 hours. The production mix variance is ______.

$60,000 Reason: [(400 x 400) + (600 x 100)] - [(200 x 400) + (800 x 100)] = 220,000 - 160,000 = $60,000

Addams, Inc. produces water sealant that is made from two chemicals: A20 standard cost per unit of finished product 0.7 gallon @ $4.00 = $2.80 B15 standard cost per unit of finished product 0.3 gallon @ $9.00 = $2.70 Last month Addams produced 55,000 gallons of the water sealant using the following: A20 material purchased and used 40,000 gallons @ $4.25 B15 material purchased and used 20,000 gallons @ $10.00 Calculate A20s mix variance. Multiple choice question. $8,000 favorable $6,000 favorable $6,000 unfavorable $8,000 unfavorable

$8,000 favorable Reason: ($4.00 x 40,000) - ($4.00 x.7 x 60,000) = $8,000 F

The accounting staff must carefully check variance reports before sending them to operating managers since many variances occur because of errors in ______.

bookkeeping adjustments timing problems recording

The extent to which an item can be managed or a company can do something to manage the variance is called the____of the variance.

controllability

The extent to which an item can be managed or a company can do something to manage the variance is called the___of the variance

controllability

Because managements' time is a scare resource, priorities must be set to determine which variances should be investigated using___analysis

cost benefit

If a company purchases 100,000 pounds of material with an actual price of $0.20 per pound and a standard price of $0.10 per pound, the entry will include a ______ to material price variance for $10,000.

debit (100,000*0.1>100,000*0.1)

Using a planned variance ______.

does not affect the performance evaluation activity is common when temporary changes occur

When recording the entry for the use of raw materials, the difference between work-in-process inventory and raw materials inventory is recorded as the materials ______ variance.

efficiency

Immediate corrective actions can generally be taken for_____or____variances which occur frequently and are easily corrected as soon as they are discovered.

efficiency usage

When a company uses full absorption costing and production and sales volume are not the same, fixed production costs are allocated to____and finished goods.

ending inventory

The two reasons for a sales activity variance are changes related to____volume or differences in___

industry market share

The sales activity variances that can be computed are the ______ variances.

industry volume

An approach that requires emphasis of the deviation from an accepted base point, such as, a standard, a budget, an industry average, or a prior period experience is called____by____

management exception

A variance that comes from the relative proportion of different products sold is called a sales ______ variance.

mix

When production is greater than sales ______ affected.

only the variable production cost variance is

Professional staff hours, number of guests or patient-days are all examples of____measures used by____organizations.

output service

When conditions change but are known to be temporary, some companies develop a(n)____variance

planned

A company budgets 1,000 hours for a service job using a partner for 200 hours and staff for the remaining hours at $400 and $100 respectively. Due to scheduling issues, the partners works 400 hours on the job while staff work 600 hours. This will result in a ______ variance.

production mix

The variance that arises from a charge in the relative proportion of inputs (materials or labor mix) is called a(n)____variance

production mix

The difference between expected output from a given level of inputs and the actual output obtained from those inputs is called the____variance

production yield

If a company purchases more material than is used in production in a period, the difference will affect the ______ variance.

purchase price

When materials purchased is different than materials used, the____variance is impacted.

purchase price