Accounting Exam 3

The direct materials flexible budget variance can be divided into which of the following two variances? A) Price variance and the rate variance B) Price variance and the standard variance C) Price variance and the quantity variance D) Quantity variance and the efficiency variance

C

A company's purchasing department negotiates all of the purchasing contracts for raw materials. Which variance is most useful in assessing the performance of the purchasing department? A) Direct materials quantity variance B) Direct materials price variance C) Direct labor rate variance D) Direct labor efficiency variance

B

An example of a favorable variance is: A) Material prices are higher than budgeted. B) Actual expenses are less than budgeted. C) Budgeted direct labor costs are less than actual costs. D) Actual sales are less than budgeted.

B

Collections of cash from sales appear on what budget? A) Sales budget B) Combined Cash budget C) Budgeted income statement D) None of the above answers is correct.

B

If the actual quantity of direct material used in production exceeded the standard quantity allowed (based on actual units produced), there was: A) A favorable direct materials quantity variance. B) An unfavorable direct materials quantity variance. C) An unfavorable direct materials price variance. D) An unfavorable flexible budget variance.

B

A(n) ________ is a carefully predetermined cost that is usually expressed on a per unit basis. a. allocated cost b. applied cost c. standard cost d. flexible cost

C

The ________ budget starts with the number of units to be produced. A) production B) operating expense C) direct labor D) All of these choices start with the number of units to be produced.

C

The direct labor variance can be divided into two variances A) rate variance and price variance. B) price variance and usage variance. C) rate variance and efficiency variance. D) price variance and efficiency variance.

C

Jacob Wolf Company had a favorable direct labor flexible budget variance. It would not be possible for the direct labor rate and efficiency variances, respectively, to be: A) unfavorable; unfavorable B) favorable; favorable C) favorable; unfavorable D) unfavorable; favorable

A

On the direct materials budget, the total quantity of direct materials to be purchased is computed as A) quantity needed for production + desired end inventory of DM - beginning inventory of DM. B) units to be produced + desired end inventory of DM - beginning inventory of DM. C) units to be produced - desired end inventory of DM + beginning inventory of DM. D) quantity needed for production - desired end inventory of DM + beginning inventory DM.

A

The ________ budget is the only budget stated only in units, not dollars. A) production B) sales C) direct materials D) manufacturing overhead

A

The production budget is directly used to prepare which of the following budgets? A) Direct Materials budget B) Sales budget C) Capital Expenditures budget D) Operating Expenses budget

A

The volume variance and the spending variance combined explain the: A) master budget variance B) efficiency variance C) price variance D) difference between budgeted income based on actual units sold and budgeted income based on budgeted units sold.

A

Which variance is directly impacted if a worker drops the raw material during production and the raw material must be discarded? A) Direct materials quantity variance B) Direct materials price variance C) Direct labor rate variance D) Direct labor efficiency variance

A

Which of the following may cause a favorable volume variance of the sales? A) Actual net income for the subunit is greater than budgeted net income. B) Actual sales in dollars are greater than the master budget sales in dollars. C) The flexible budget sales in dollars are greater than the master budget sales in dollars. D) Actual sales in dollars are less than the master budget sales in dollars.

C

"The comprehensive budget" is best described by which of the following terms? A) Operating budget B) Sensitivity analysis C) Responsibility center D) Master budget

D

A company receives an unusually high number of orders in a month. To produce all of the orders within the scheduled dates of delivery, the company pays employees an extra $8 per hour for every hour of overtime the employees work. Which of the following variances may be directly impacted? A) Direct materials price variance B) Direct materials quantity variance C) Direct labor efficiency variance D) Direct labor rate variance

D

A company's planned borrowings and repayments appear on the A) capital expenditure budget. B) production budget. C) operating expenses budget. D) combined cash budget.

D

A favorable direct materials price variance indicates which of the following? A) The actual cost of materials purchased was greater than the standard cost of materials purchased. B) The standard cost of materials purchased was less than the actual cost of materials purchased. C) The Actual Quantity (AQ) of materials used was less than the standard quantity of materials used for actual production. D) The standard cost of materials purchased was greater than the actual cost of materials purchased.

D

The final step in the preparation of the financial budget is the preparation of which of the following? A) Master budget B) Cash budget C) Operating budgets D) Budgeted balance sheet

D

The quantity of direct materials needed for production is calculated by: A) subtracting units to produce from the quantity of direct materials required per unit. B) dividing units to produce by the quantity of direct materials required per unit. C) adding units to produce to the quantity of direct materials required per unit. D) multiplying units to produce by the quantity of direct materials required per unit.

D

Which of the following alternatives reflects the proper order of preparing components of the master budget? 1. Production budget 2. Sales budget 3. Direct materials budget A) 2, 3, 1 B) 1, 3, 2 C) 3, 1, 2 D) 2, 1, 3

D

Which of the following budgets usually shows separate sections for fixed and variable costs? A) Direct materials and manufacturing overhead budget B) Manufacturing overhead budget and production budget C) Production budget and manufacturing overhead budget D) Operating expenses budget and manufacturing overhead budget

D

Which of the following is a benefit to an organization that implements a budget? A) Budgets help managers focus their attention on the future needs in an organization. B) Budgets help managers improve their decision-making processes in an organization. C) Budgets help the manager improve the motivation of employees in the workplace. D) All of the above

D