ACCT 2521 Exam 3 terms

A. Ideal Standard

This standard is set at a level that could be achieved if everything ran perfectly. A. ideal standard B. attainable standard C. unattainable standard D. variance from standard

B. Attainable Standard

This standard is set at a level that may be reached with reasonable effort. A. ideal standard B. attainable standard C. unattainable standard D. variance from standard

A. Favorable Variance

This variance is the difference involving spending less, or using less than the standard amount .A. favorable variance B. unfavorable variance C. no variance D. variance

B. Unfavorable Variance

This variance is the difference involving spending more or using more than the standard amount. A. favorable variance B. unfavorable variance C. no variance D. variance

B. Less qualified workers

What are some possible reasons for a direct labor efficiency variance? A. utility usage decrease B. less qualified workers C. office supplies spending D. sales decline

A. Substandard Material

What are some possible reasons for a material price variance? A. substandard material B. labor rate increases C. labor rate decreases D. labor efficiency

D. When the actual price is less than the standard price

When is the labor rate variance favorable? A. when the actual quantity used is greater than the standard quantity B. when the actual quantity used is less than the standard quantity C. when the actual price is greater than the standard price D. when the actual price is less than the standard price

D. When the actual price is less than the standard price

When is the material price variance favorable? A. when the actual quantity used is greater than the standard quantity B. when the actual quantity used is less than the standard quantity C. when the actual price paid is greater than the standard price D. when the actual price is less than the standard price

C. When the actual price paid is greater than the standard price

When is the material price variance unfavorable? A. when the actual quantity used is greater than the standard quantity B. when the actual quantity used is less than the standard quantity C. when the actual price paid is greater than the standard price D. when the actual price is less than the standard price

A. Predicts estimated revenues and costs at varying levels of production

A flexible budget ________. A. predicts estimated revenues and costs at varying levels of production B. gives actual figures for selling price C. gives actual figures for variable and fixed overhead D. is not used in overhead variance calculations

Unfavorable Variance

Causes operating income to be higher than budgeted

A profit center

Managers are accountable for both revenues and costs, and therefore profits.

A cost center

Managers are accountable for costs only

Revenue Center

Managers are accountable primarily for revenues

an investment center

Managers are responsible for (1) generating revenues, (2) control- ling costs, and (3) efficiently managing the division's assets

A. Hiring of less qualified workers

What are some possible reasons for a labor rate variance? A. hiring of less qualified workers B. an excess of material usage C. material price increase D. utilities usage change

Favorable Variance

causes operating income to be higher than budgeted

Return of investment

measures the amount of income an investment center earns relative to the size of its assets.

Capital turnover

which focuses on how efficiently the division uses its assets to generate sales revenue.

Direct fixed expenses

which include those fixed expenses that can be traced to the profit center. An example might include advertisements for Tropicana orange juice.

A. When the actual quantity used is greater than the standard quantity

When is the material quantity unfavorable? A. when the actual quantity used is greater than the standard quantity B. when the actual quantity used is less than the standard quantity C. when the actual price paid is greater than the standard price D. when the actual price is less than the standard price

B. When the actual quantity used is less than the standard quantity

When is the material quantity variance favorable? A. when the actual quantity used is greater than the standard quantity B. when the actual quantity used is less than the standard quantity C. when the actual price paid is greater than the standard price D. when the actual price is less than the standard price

A. Hiring substandard workers

Which of the following is a possible cause of an unfavorable labor efficiency variance? A. hiring substandard workers B. making too many units C. buying higher-quality material D. paying too much for workers

B. Hiring higher-quality workers at a higher wage

Which of the following is a possible cause of an unfavorable labor rate variance? A. hiring too many workers B. hiring higher-quality workers at a higher wage C. making too many units D. purchasing too much material

B. Purchasing higher-quality material

Which of the following is a possible cause of an unfavorable material price variance? A. purchasing too much material B. purchasing higher-quality material C. hiring substandard workers D. buying substandard material

A. Purchasing substandard material

Which of the following is a possible cause of an unfavorable material quantity variance? A. purchasing substandard material B. hiring higher-quality workers C. paying more than should have for workers D. purchasing too much material

Common fixed expenses

which include those fixed expenses that cannot be traced to the profit center