Managerial Accounting: CHPT 7 & 8
A possible reason for a direct labor time variance would be less qualified workers.
True
Which of the following includes only financial budgets?
cash budget, budgeted balance sheet, capital asset budget
Which of the following is true in a bottom-up budgeting approach?
Departments determine their needs and relate them to the overall goals
Hiring too many workers is a possible cause of an unfavorable labor rate variance.
False
The budgeted balance sheet is the starting point in preparing financial budgets.
False
The master budgeting approach requires management to justify all its expenditures.
False
The most common budget is prepared for a quarter.
False
The variance overhead rate is caused by the sum of the actual and standard allocation base.
False
The flexible budget evaluates the results of operations at the actual level of activity.
True
The variable overhead efficiency variance is caused by the difference between which of the following?
actual and standard allocation base
The units required in production each period are computed by which of the following methods?
adding budgeted sales to the desired ending inventory and subtracting beginning inventory
Which is not a section of the cash budget?
allowance for uncollectible accounts
8. This standard is set at a level that may be reached with reasonable effort.
attainable standard
Which approach is most likely to result in employee buy-in to the budget?
bottom-up approach
Which of the following is not an operating budget?
cash budget
What are some possible reasons for a labor rate variance?
hiring of less qualified workers
Which of the following is a possible cause of an unfavorable labor efficiency variance?
hiring substandard workers
A flexible budget ________.
predicts estimated revenues and costs at varying levels of production
7. Which of the following is an operating budget?
production budget
Which of the following is a possible cause of an unfavorable material price variance?
purchasing higher-quality material
Which of the operating budgets is prepared first?
sales budget
What are some possible reasons for a material price variance?
substandard material
What is the main difference between static and flexible budgets?
the variable costs are adjusted in a flexible budget
This variance is the difference involving spending more or using more than the standard amount.
unfavorable variance
When is the labor rate variance favorable?
when the actual price is less than the standard price
When is the material price variance favorable?
when the actual price is less than the standard price
When is the direct labor time variance favorable?
when the actual quantity used is less than the standard quantity
When is the material quantity variance favorable?
when the actual quantity used is less than the standard quantity