ACCT 321 Multiple Choice
A flexible budget is a budget that: A. is updated with actual costs as they occure during the period B. is updated to reflect the level of activity during the pay period C. is prepared using a computer spreadsheet D. contains only variable production costs
b
A quantity variance is: a. based only on the actual quantity of inputs b. calculated using the standard price of the input c. calculated using the actual price of the input d. based only on the standard quantity of inputs
b
The materials purchase budget: A. is the beginning point in the budget process B. must provide for desired ending inventory as well as for production C. is accompanied by a schedule of cash collections D. is completed after the cash budget
b
The difference between the actual price paid for the material and what should have been paid according to the standard is reflected in the direct materials _______ variance.
price
Pardee Co plans to sell 12,000 units during the month of August. If the company has 2,500 units on hand at the start of the month, and plans to have 2,000 units on hand at the end of the month, how many units must be produced during the month? A. 11,500 B. 12,500 C. 12,000 D. 14,000
a
When using a flexible budget, what will occur to fixed costs as the activity level increases within the relevant range? A) fixed costs per unit will decrease. B) fixed costs per unit will remain unchanged. C) fixed costs per unit will increase. D) fixed costs are not considered in flexible budgeting
a
The standard rate per hour includes: a. fringe benefits b. employment taxes c. employee-paid union dues d. the direct labor rate per hour
a, b, d
Which of the following are used to calculate the standard quantity per unit of direct materials? a. freight and transportation costs b. direct materials requirements per unit of finished product c. allowance for waste and spoilage
b and c
The materials price variance is calculated using the: a. standard quantity allowed of the input for the actual output b. standard price of the input c. actual price of the input d. actual quantity of the input purchased
b, c, d
A price variance is the difference between the: a. standard quantity allowed and the actual quantity used multiplied by the standard price b. standard quantity allowed and the actual quantity used multiplied by the actual price c. actual price and the standard price multiplied by the actual amount of the input d. actual price and the standard price multiplied by the standard amount allowed
c
Comparing actual results to a budget based on actual activity for the period is possible with the use of a: A) monthly budget. B) master budget. C) flexible budget. D) rolling budget
c
The purpose of a flexible budget is to: A. remove items from performance reports that are not controllable by managers. B. permit managers to reduce the number of unfavorable variances that are reported. C. update the static planning budget to reflect the actual level of activity of the period. D. reduce the amount of conflict between departments when the master budget is prepared.
c
The standard price per unit for direct materials: a. is adjusted for an allowance for waste and spoilage b. does not consider purchase discounts c. can change based on a change in the delivery method
c
A quantity variance is: a. based only on the standard quantity of inputs b. calculated using the actual price of the input c. based only on the actual quantity of inputs d. calculated using the standard price of the input
d
Which of the following budgets are prepared before the sales budget? MOH CASH A. YES YES B. YES NO C. NO YES D. NO NO
d
Which of the following would not appear on a flexible budget performance report as shown in the text? A. Variable costs. B. Mixed costs. C. A flexible budget adjusted to the actual level of activity. D. The previous year's actual costs.
d
The difference between the amount of an input used and the amount that should have been used, all evaluated at the standard price for the input, is called a(n) ________ variance.
quantity
The amount of an input that should have been used to produce the actual output is known as the _______ quantity, or hours allowed.
standard