ACCT 102 final exam study!

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

Price Variance

(AP - SP) X ATQU or ATHU = Variance (F or U)

Computation of sales price variance

(ASP - PSP) X AUS = Variance (F or U)

Usage variance

(ATQU or ATHU - STQA or STHA) X SP = Variance (F or U)

Computation of Sales volume variance

(AUS - PUS) X PSP

Budget slacks

(Costs) Overstate budget costs on purpose so that when compared to actual results have a better chance of getting a favorable variance.

Low Balling

(Revenue) Understate budget revenue on purpose so that when compared to actual results have a better chance of getting a favorable variance.

AUC, SUC and AUM are known as

- Actual Unit Cost (Actual Quantity Per Unit or Actual Hours Per Unit X Actual Unit Price) - Standard Unit Cost (Standard Quantity Per Unit or Standard Hours Allowed Per Unit X Standard Unit Price) -Actual Units Made

3 common levels of strandards

- Ideal standards -practical standards -lax standards

AP, SP and ATQU or ATHU is known as

-Actual Price Per Unit -Standard Price Per Unit -Actual Total Quantity Used or Actual Total Hours Used

ATQU or ATHU and STQA or STHA are known as

-Actual Total Quantity Used or Actual Total Hours Used -Standard Total Quantity Allowed or Standard Total Hours Allowed

Shimano Company makes a product that is expected to require 2 hours of labor per unit of product. The standard cost of labor is $5.20. Shimano actually used 1.9 hours of labor per unit of product. The actual cost of labor was $5.10 per hour. Shimano made 1,000 units of product during the period. Based on this information alone, the labor price variance is A. $190 favorable. B. $190 unfavorable. C. $510 favorable. D. $510 unfavorable

A. $190 favorable. ($5.10 - $5.20) X 1,900(a) = $190 favorable (a)1,000 units made X 1.9 hours per unit = 1,900

MO standards

Flexible budget at actual volume - actual results at actual volume = flexible budget variance

Material standards

Specifications for materials including price and usage

Cost Standards

Standards are what should be the price/cost or quantity needed to produce 1 unit

computation of sales variances

Total sale variance (AS - PS) = Variance (F or U)

Static Budget

based on only one level of activity

Lax Standards

easily attainable- Can be achieved with minimal effort

flexible budget

expected revenues and costs over a variety of volume levels

Ideal standard

perfect performance under best possible conditions- Most companies cannot achieve ideal standards- use as a starting point to develop standards.

PUS is known as

planned units sold

Most companies use...

practical standards

Practical Standards

reasonable efforts attainable by most companies- Allows for normal levels of inefficiency such as: -Waste -Spoilage -Labor inefficiencies (employees gets sick, downtime, etc.) -External factors - snowstorms, hurricanes, etc.

major differences

total fixed costs remain the same; total variable costs will change as volume changes

A flexible budget is used when...

volume levels might change during the budget period.

Standard cost systems facilitate the management practice known as A. management development. B. management by exception. C. just-in-time management. D. managing by the numbers.

B. management by exception.

A budget prepared at a single volume of activity is referred to as a A. strategic budget. B. static budget. C. standard budget. D. flexible budget.

B. static budget.

Assuming actual sales volume is 11,000 units and planned sales volume is 10,000 units, the sales volume variance in units A. is 1,000 units favorable. B. is 1,000 units unfavorable. C. cannot be determined without additional information. D. None of these

A. is 1,000 units favorable.

Total Flexible Budget Variance

AUC - SUC) X AUM = Variance (F or U)

AS is known as

Actual Sales (Actual Units Sold X Actual Sales Price per unit)

ASP is known as

Actual Sales Price per unit

AUS is known as

Actual Units Sold

Select the incorrect statement regarding flexible budgets. A. Standard prices and costs are used in preparing a flexible budget. B. A flexible budget is also known as a static budget. C. Flexible budgets show the estimated revenues and costs at multiple volume levels. D. A master budget can be prepared using flexible budgeting.

B. A flexible budget is also known as a static budget.

Sometimes employees will deliberately overstate the amount of materials and/or labor costs that should be required to complete a job. The difference between inflated and realistic cost standards is known as A. lowballing. B. budget slack. C. cooking the books. D. making the numbers.

B. budget slack.

Gonzalez Company makes a product that is expected to use 1.2 pounds of material per unit of product. The material has a standard cost of $2 per pound. Gonzalez actually used 1.1 pounds of material per unit of product made in January. The actual cost of material was $2.10 per pound. Based on this information alone, the condition of the variances for the January production would be A. unfavorable for price and unfavorable for usage. B. unfavorable for price and favorable for usage. C. favorable for price and unfavorable for usage. D. favorable for price and favorable for usage.

B. unfavorable for price and favorable for usage.

Difficulty Levels of Standards

Budgets are developed based on standards (what is expected for the next period)

Keiko Company makes a product that is expected to require 2 hours of labor per unit of product. The standard cost of labor is $6.00. Keiko actually used 1.9 hours of labor per unit of product. The actual cost of labor was $6.25 per hour. Keiko made 1,100 units of product during the period. Based on this information alone, the labor usage variance is A. $190 favorable. B. $600 favorable. C. $660 favorable D. $660 unfavorable

C. $660 favorable

Which range of difficulty should normally be used to develop standards? A. Ideal standards B. Lax standards C. Practical standards D. None of these

C. Practical standards

Static and flexible budgets are similar in that A. they both are prepared for multiple activity levels. B. they both concentrate solely on costs. C. they both are based on the same per unit variable amounts and the same total fixed costs. D. none of these.

C. they both are based on the same per unit variable amounts and the same total fixed costs.

sales variances

Comparing actual revenue (sales) to planned (also referred to as budgeted, projected or standard) revenue

Which of the following equations can be used to compute the total materials variance? (A = Actual; S = Standard; Q = Quantity; P = Price) A. (SQ SP) (SQ SP) B. (AQ SP) (SQ SP) C. (AQ AP) (AQ SP) D. (AQ AP) (SQ SP)

D. (AQ AP) (SQ SP)

When would a variance be labeled as favorable? A. When standard costs are equal to actual costs B. When standard costs are less than actual costs C. When expected sales are greater than actual sales D. When actual costs are less than standard costs

D. When actual costs are less than standard costs

PS is known as

Planned Sales (Planned Units to Be Sold X Planned Sales Price per unit)

PSP is known as

Planned Sales Price per unit

A static budget is used when...

a company does not expect that volume levels will change for the budget period.


Kaugnay na mga set ng pag-aaral

Med nutrition skim of notes for ch 16-23

View Set

AP Euro Revolutions of 1848-France

View Set

Series 7 Debt: Bond Basics, Corporate Debt, US Gov Debt

View Set

Herbicides, Insecticides, Fungicides

View Set

Ch.34 Pt.2 Tetrapods: Amphibians,Amniotes: Reptiles (not birds)

View Set

Government Chapter 2 Google Doc Questions (not vocabulary)

View Set

Business Law: Ch. 19 - Video Quiz - Pharzime, Scene 1

View Set