Exam 3

The planning budget, based on 1,000 units, shows revenue of $24,000 and $6,250 for supplies. A total of 1,200 units were actually produced and sold. The flexible budget will show

$28,800 revenue $7,500 for supplies

If the planned budget revenue for 5,000 units is $120,000, the flexible budget revenue for 4,500 units is

108,000

Which of the following statements is true?: Quantity variances are computed for direct materials, direct labor and fixed overhead. Price variances can only be computed for direct materials and direct labor. A labor efficiency variance is a quantity variance. The variance that computes the price difference for materials is called a material rate variance.

A labor efficiency variance is a quantity variance.

The material quantity variance measures the difference between the ______ quantity of materials used in production and the_____ quantity of materials allowed for the actual output, multiplied by the standard price per unit of materials

Blank 1: actual Blank 2: standard

A(n) ________ __________ is the difference between how much of an input was actually used and how much should have been used and is stated in dollar terms using the standard price of the input

Blank 1: quantity Blank 2: variance

A materials price variance is equivalent to a labor________ variance and a materials quantity variance is equivalent to a labor_____ variance

Blank 1: rate Blank 2: efficiency

The material variance terms price and quantity are replaced with the terms _________ and ________ when computing direct labor variances.

Blank 1: rate or rates Blank 2: hours or hour

The labor rate variance measures the productivity of direct labor.

False

Estimates of what revenues and costs should have been based on the actual level of activity are shown on the _____ budget

Flexible

A budget that is prepared at the beginning of the period for a specific level of activity is called a______ budget

Planning

an unchanged planning budget is known as a(n) __ planning budget.

Static

The materials price variance is calculated using the Blank______ quantity of the input purchased.

actual

A price variance is the difference between the

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

When preparing a flexible budget, the level of activity

affects variable costs only

The materials price variance is the difference between the actual price of materials

and the standard price for materials with the difference multiplied by the actual quantity of materials

The variance analysis cycle

begins with the preparation of performance reports

A quantity variance is: calculated using the standard price of the input calculated using the actual price of the input based only on the standard quantity of inputs based only on the actual quantity of inputs

calculated using the standard price of the input

A spending variance is the

difference between the actual amount of the cost and how much a cost should have been, given the actual level of activity

A revenue variance is the

difference between the actual total revenue and what the total revenue should have been, given the actual level of activity for the period

(Actual cost per unit - standard cost per unit) × actual quantity = the materials variance

price

The materials quantity variance is generally the responsibility of the ___________ department manager.

production

The difference between the actual amount of materials used in production and the standard amount of materials allowed for the actual output, multiplied by the standard price per unit of materials is the materials

quantity

The difference between the actual total revenue and what the total revenue should have been, given the actual level of activity for the period is called a(n)------- variance.

revenue or sales

The difference between how much a cost should have been, given the actual level of activity, and the actual amount of the cost is a(n)

spending variance

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

standard

The materials price variance is calculated using the

standard price of the input actual price of the input actual quantity of the input purchased