ACG Exam 3

ABC Company makes a single product which has the following standards: Direct materials 2 kilograms $4.30 per kilogram Direct labor 3 hours $6.00 per hour Variable overhead 3 hours $6.50 per hour Fixed overhead 3 hours $9.00 per hour The following data pertain to June's operations: • Direct labor was $820,500 for 147,000 hours worked • Direct material purchases were 110,000 kilograms for $485,000 • Variable manufacturing overhead incurred was $986,000 • Fixed manufacturing overhead incurred was $1,154,500 • 93,000 kilograms of direct materials were used • The company sold 42,000 units at $130 each • Variable manufacturing overhead is applied based on direct labor hours • 46,000 units were produced during the year • Budgeted production was 45,000 units • At the beginning of June there were no inventories. The labor efficiency variance is:

$54,000 U

ABC Company makes a single product which has the following standards: Direct materials 2 kilograms $4.30 per kilogram Direct labor 3 hours $6.00 per hour Variable overhead 3 hours $6.50 per hour Fixed overhead 3 hours $9.00 per hour The following data pertain to June's operations: • Direct labor was $820,500 for 147,000 hours worked • Direct material purchases were 110,000 kilograms for $485,000 • Variable manufacturing overhead incurred was $986,000 • Fixed manufacturing overhead incurred was $1,154,500 • 93,000 kilograms of direct materials were used • The company sold 42,000 units at $130 each • Variable manufacturing overhead is applied based on direct labor hours • 46,000 units were produced during the year • Budgeted production was 45,000 units • At the beginning of June there were no inventories. The labor rate variance is:

$61,500 F

How many units are estimated to be sold if ABC Co., has a planned production of 948,635, a desired beginning inventory of 160,000, and a desired ending inventory of 100,000 units?

1,008,635

ABC Company makes premium chocolates. One of the company's products is the Peppo Mint. Peppo Mints are packed 24 per box. During June, 2,000 boxes were produced. The company paid its direct labor workers a total of $15,480 for their work or $12.90 per hour. According to the standard cost card for Bango Mints, each box should require 0.3 direct labor hours at a cost of $12.00 per hour. What is the labor price variance?

1,080

What is the proper preparation sequencing of the following budgets?

1. Sales budget 2. Selling and administrative budget 3. Budgeted income statement 4. Budgeted balance sheet

A company's static budget estimate of total overhead costs was $100,000 based on the assumption that 10,000 units would be produced and sold. The company estimates that 30% of its overhead is variable, and the remainder is fixed. What would be the total overhead costs according to the flexible budget if 10,881 units were produced and sold?

102,643

A company's static budget estimate of total overhead costs was $100,000 based on the assumption that 10,000 units would be produced and sold. The company estimates that 30% of its overhead is variable and the remainder is fixed. What would be the total overhead costs according to the flexible budget if 11,849 units were produced and sold?

105,547

ABC Co. produces calculators. Budgeted sales will be: March 12,000 units, April 13,000, May 15,000 and June 19,000. Ending finished goods inventory policy is 10% of the following month's sales. March 1 inventory is projected to be 1,476 units. How many units will be produced in March?

11,824

ABC Co has forecast sales to be $ 144,534 in February, $145,000 in March, $170,000 in April, and $180,000 in May. The average cost of goods sold is 60% of sales. All sales are on made on credit and sales are collected 60% in the month of sale, and 40% the month following. What are budgeted cash receipts in March?

144,814

ABC plans to sell 50,000 units of product 75I in June, and each of these units requires five sq. ft. of raw material. Additional data is as follows: If the company purchases 250,000 sq. ft. of raw material during the month, the estimated raw material inventory on June 30 would be: 11,000 sq ft 21,000 sq ft 17,200 sq ft 14,200 sq ft 9,200 sq ft

17,200 sq ft

ABC makes all sales on account, subject to the following collection pattern: 40% are collected in the month of sale; 55% are collected in the first month after sale; and 5% are collected in the second month after sale. If sales for June, July, and August were $123,678, $161,286, and $224,597, respectively, what were the firm's budgeted collections for August?

184,730

ABC Co. is budgeting sales of 25,000 units and already has 5,074 units in beginning inventory. How many units must be produced to also meet the 7,010 units required in ending inventory?

26,936

A Company has a material standard of 1 pound per unit of output. Each pound has a standard price of $25 per pound. During July, A Company paid $127,250 for 4,950 pounds, which they used to produce 4,700 units. What is the direct material price variance?

3,500 unfavorable

ABC Co. purchases direct materials each month. Its payment history shows that 0.79 is paid in the month of purchase, with the remaining balance paid the month after purchase. Prepare a cash payment schedule for March if in January through March, it purchased $35,000, $37,000, and $39,000, respectively.

38,580

An examination of ABC Corp's inventory accounts revealed the following information: Raw materials, June 1: 45,400 units Raw materials, June 30: 50,400 units Purchases of raw materials during June: 182,000 units ABC's finished product requires four units of raw materials. On the basis of this information, how many finished products were manufactured during June? 38,450 30,250 40,450 44,250 42,250

44,250

ABC plans to sell 14,000 units of a particular product during July, and expects sales to increase at the rate of 10% per month during the remainder of the year. The June 30th and September 30th ending inventories are anticipated to be 1,200 units and 1,050 units, respectively. On the basis of this information, how many units should ABC purchase for the quarter ended September 30? 49,610 40,960 41,960 41,690 46,190

46,190

ABC Co. applies overhead to production on the basis of machine hours, reported the following data for the period just ended: Actual units produced: 13,000 Actual variable overhead incurred: $68,700 Actual machine hours worked: 16,132 Standard variable overhead cost per machine hour: $4.30 If ABC Co. estimates 1.30 hours to manufacture a completed unit, the company's variable-overhead spending variance is:

668

ABC Inc. began operations in April of this year. It makes all sales on account, subject to the following collection pattern; 30% are collected in the month of sale; 60% are collected in the first month after sales; and 10% are collected in the second month after sale. If sales for April, May, and June were $61,385, $83,751, and $71,237, respectively, what were the firm's budgeted collections for June?

77,760

A Company has a material standard of 1.1 pound per unit of output. Each pound has a standard price of $34 per pound. During July, A Company paid $118,800 for 5,100 pounds, which they used to produce 4,900 units. What is the direct materials quantity variance?

9,860

What is the proper sequencing of the following budgets? A Budgeted Balance Sheet B Selling and Administrative Budget C Sales Budget D Budgeted Income Statement C, B, D, A A, B, C, D C, D, B, A D, C, B, A D, C, A, B

C, B, D, A

Which of the following should have the strongest cause and effect relationship with overhead costs? cost drivers units of output cost adapters cost followers value-added costs

Cost drivers

Which of the following statements about financial planning models (FPMs) is (are) false?

FPMs have become less popular in recent years because of computers and spreadsheets.

Companies develop a set of operating budgets to project cash flow and likely cash shortfalls and/or surpluses. True False

False

In an activity-based flexible budget, each overhead item has the same cost driver, identified by flexible overhead budget for that cost item. True False

False

Variances are computed by taking the difference between the product cost and standard cost. True False

False

The first step in developing a master budget is always the creation of which of the following?

Sales Budget

What is the primary difference between a static budget and a flexible budget? -The static budget is prepared for a single level of activity, while a flexible budget is adjusted for different activity levels -The static budget is adjusted for different activity levels, and a flexible budget is adjusted for different activity levels -Both the static and flexible budgets are fixed at predetermined activity levels -The static budget contains only fixed costs, while a flexible budget contains only variable costs

The static budget is prepared for a single level of activity, while a flexible budget is adjusted for different activity levels

The activity-based flexible budget provides a more accurate benchmark against which to compare actual costs than does a conventional flexible budget. True False

True

Flexible budgets reflect a company's anticipated costs based on variations in: standards inflation rates activity levels managers anticipated capital acquisitions

activity levels

A budget serves as a benchmark against which actual results become inconsequential allocated results can be interpreted actual results can be compared cash balances can be compared to expense tools allocated results become inconsequential

actual results can be compared

The units required in production each period are computed by which of the following methods? -adding budgeted sales to the desired ending inventory and subtracting beginning inventory -adding beginning inventory to budgeted sales and subtracting desired ending inventory -adding budgeted sales tot he beginning inventory and subtracting the desired ending inventory -adding beginning inventory, budgeted sales, and desired ending inventory

adding budgeted sales to the desired ending inventory and subtracting beginning inventory

Which of the following combinations of direct-material variances might prompt management to undertake a detailed variance investigation?

all of the answers are correct

Which of the following could be found on a flexible overhead budget? indirect labor at different activity levels all of the listed choices are correct indirect materials at different activity levels depreciation expense for plant and equipment multiple cost pools

all of the listed choices are correct

Which system(s) use a predetermined overhead rate? standard costing variable costing normal costing both normal and standard costing both standard and variable costing

both normal and standard costing

A company's plan for the acquisition of long-lived assets, such as buildings and equipment, is commonly called a: master budget financial budget capital budget profit plan budget pro-forma budget

capital budget

A company's expected receipts from sales and planned disbursements to pay bills is commonly called a: pro-forma budget financial budget master budget cash budget profit plan budget

cash budget

The difference between the actual price and the standard price, multiplied by the actual quantity of materials purchased, is the direct materials quantity variance direct materials price variance direct labor price variance direct labor quantity variance

direct materials price variance

A company's plan for the issuance of stock or incurrence of debt is commonly called a: master budget financial budget profit plan budget capital budget pro-forma budget

financial budget

Which budgets evaluates the results of operations at the actual level of activity? capital budget static budget cash budget flexible budget

flexible budget

Which of the following is a possible cause of an unfavorable labor efficiency variance? buying higher-quality material hiring unqualified workers making too many units paying higher wages to workers

hiring unqualified workers

A static budget: -is preferred over a flexible budget in the evaluation of performance -is based totally on prior year's costs -is based on one anticipated activity level -is based on a range of activity -presents a clear measure of performance when planned activity differs from actual activity

is based on one anticipated activity level

What are some reasons for a material quantity variance? change in the actual cost of materials more qualified workers building rental charges increase labor rate decreases

more qualified workers

The direct materials budget is prepared using which budget's information? production budget labor budget raw materials budget cash receipts budget cash payments budget

production budget

The individual generally responsible for the direct-material price variance is the: human resource department manager production supervisor sales manager purchasing manager finance manager

purchasing manager

Which of the following is a possible cause of an unfavorable material quantity variance? hiring higher qualified workers paying higher wages for workers purchasing substandard material purchasing too much material

purchasing substandard material

The _________________ department would generally begin an initial investigation of an unfavorable material price variance, and the _______________department would generally begin an initial investigation of an unfavorable materials quantity variance. engineering; production production; purchasing purchasing; quality control purchasing; production

purchasing; production

A manufacturing firm would begin preparation of its master budget by constructing a: production budget sales budget set of pro-forma financial statements capital budget cash budget

sales budget

Which of the following is a predetermined estimated cost that can be used in the calculation of a variance? differential cost standard cost product cost marginal cost actual cost

standard cost

The comprehensive set of budgets that serves as a company's overall financial plan is commonly known as: the financing budget the master budget the cash budget the sales budget the capital budget

the master budget

Which department would normally begin an investigation regarding an unfavorable materials price variance? the sales department the administrative department the human resources department the purchasing department the manufacturing department

the purchasing department

This variance is the difference involving spending more or using more than the standard amount. favorable variance no variance simple variance unfavorable variance

unfavorable variance

With respect to overhead, what is the difference between normal costing and standard costing? the choice of an activity measure use of a standard rate versus an actual rate use of standard hours versus actual hours use of a predetermined overhead rate

use of standard hours versus actual hours

When is the materials price variance favorable? -when the actual price paid is more than the standard price -when the actual quantity used is greater than the standard quantity -when the actual price is less than the standard price -when the actual quantity used is less than the standard quantity

when the actual price is less than the standard price

When is the material price variance unfavorable? when the actual price paid is less than the standard price when the actual quantity used is greater than the standard quantity when the actual quantity used is less than the standard quantity when the actual price paid is greater than the standard price

when the actual price paid is greater than the standard price

When is the material quantity variance favorable? -when the actual price paid is more than the standard price -when the actual price paid is greater than the standard price -when the actual quantity used is less than the standard quantity -when the actual quantity used is greater than the standard quantity

when the actual quantity used is less than the standard quantity