Ch9. Flexible Budget, Standard Costs, and Variance Analysis

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

If the activity level for the month is 4,000 units, actual revenue is $6,000, actual variable costs are $0.20 unit, and actual fixed costs total $500, which of the following are true?

$1,300 in total costs $4,700 net income $1,300 in total costs Reason:4,000 units x $0.20 + $500 = $1,300 $4,700 net income Reason:$6,000 - (4,000 x $0.20) - $500 = $4,700 net income.

Fancy Nails' budget revenue is $20 per manicure. The budget for June was based on 2,400 manicures. During June, the actual revenue was $49,750 for 2,500 manicures. The revenue variance for June is

$250 Unfavorable (Flexible budget amount for revenue $20 per manicure x 2,500 manicures = $50,000. Revenue variance = $50,000 - $49,750 = $250 U)

The standard price of materials is $4.10 per pound and the standard quantity allowed for actual output is 5,800 pounds. If the actual quantity purchased and used was 6,000 pounds, and the actual price per pound was $4.00, the direct materials price variance is _____.

$600 F 6,000 x ($4.00 - $4.10) = $600 F

The spending variance is _____.

(AQ X AP) - (SQ X SP)

Which of the following statements is true?

A labor efficiency variance is a quantity variance.

the variable overhead efficiency variance compares the _____ hours times the standard rate with the standard hours allowed for the actual output times the _____ rate.

Actual Standard

The spending variance is labeled as favorable when the

Actual cost is less than what the cost should have been at the actual level of activity

The materials price variance is calculated using the _____.

Actual price of the input Actual quantity of the input purchased Standard price of the input

Which of the following statements are correct?

Excessive inventories contribute to inefficient operations. Building inventories can reduce unfavorable labor efficiency variances.

An unfavorable labor efficiency variance can result from:

Faulty equipment Poorly motivated workers Insufficient product demand

The materials price variance is:

Impacted by the delivery method chosen Charged to the production manager when production problems occur Generally the responsibility of the purchasing manager

When setting direct labor standards _____.

It is best to use "tight but attainable" standards The production manager should be consulted Time and motion studies may be used

Which of the following statements are true?

Overtime premiums can cause an unfavorable labor rate variances How production supervisions use direct labor workers can lead to labor rate variance

A static budget is suitable for:

Planning only

SP(AQ-SQ) is the formula for the materials _____ variance.

Quantity

The difference between the actual materials used in production and the standard amount allowed for the actual output is reflected in the materials _____ variance.

Quantity

The difference between actual results and the flexible budget amount is a(n) _____ variance.

Spending

The amount of direct-labor hours that should be used to produce one unit of finished goods is the __________hours per unit.

Standard

Which of the following statements are true?

Standards provide information for measuring performance. When actual results depart significantly from the standard, the reasons why should be investigated.

A price variance is the difference between:

The actual price and the standard price multiplied by the actual amount of the input.

Match the definition with the term

Unfavorable variance: Actual revenue is less than budgeted revenue Favorable variance: Actual revenue is more than budgeted revenue

To calculate a price variance, multiply the _____ quantity times the actual price and compare it to the actual quantity times the _____ price.

actual standard

When preparing a flexible budget, the level of activity

affects variable costs only

Which of the following are used to calculate the standard quantity per unit of direct materials?

direct materials requirements per unit of finished product allowance for waste and spoilage

When the actual hourly rate is lower than the standard hourly rate, the labor rate variance is _____.

favorable

What costs and revenue should have been for the actual level of activity is shown on a(n) _____ budget.

flexible

SR(AH-SH) is the formula for the _____ variance

labor efficiency

How much input should be used to produce a product or provide a service is a _____ standard.

quantity

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 _____ variance.

quantity

The final, delivered price that should be paid for each unit of direct materials is the ______ price per unit of materials.

standard

The labor efficiency variance is the difference between actual hours used and standard hours allowed multiplied by the _____ hourly rate.

standard

When calculating the labor rate variance, multiply the actual hours worked times the __ labor rate and compare it to the actual hours worked times the __ labor rate.

standard actual

The standard price of the material is used in the calculation of the material quantity variance because:

using actual prices would hold the production manager responsible for the inefficiencies of the purchasing manager


Kaugnay na mga set ng pag-aaral

Chapter 1 Overview of Health Informatics

View Set

Vocabulaire de l'Europe et l'Union européenne

View Set

Ch. 8 Business Plans: Seeing Audiences and your Business Clearly

View Set

역학-인과성 판단의 근거

View Set

Polymers Chapter, CHAPTER 16 BIOCHEMISTRY

View Set

Chapter 11 - Public Goods and Common Resources

View Set