managerial accounting exam 3

Net operating income - (%)(Average operating assets)

residual income =

A. an unfavorable materials quantity variance

An unfavorable direct labor efficiency variance could be caused by: A. an unfavorable materials quantity variance. B. an unfavorable variable overhead rate variance. C. a favorable materials quantity variance. D. a favorable variable overhead rate variance.

Process time + Inspection time + Move time + Queue time

Throughput time =

D. the actual usage of materials was less than the standard allowed.

Tower Company planned to produce 3,000 units of its single product, Titactium, during November. The standards for one unit of Titactium specify six pounds of materials at $0.30 per pound. Actual production in November was 3,100 units of Titactium. There was an unfavorable materials price variance of $380 and a favorable materials quantity variance of $120. Based on these variances, one could conclude that: A. more materials were purchased than were used. B. more materials were used than were purchased. C. the actual cost per pound for materials was less than the standard cost per pound. D. the actual usage of materials was less than the standard allowed.

Sales / Average operating assets

Turnover =

D. sales.

Turnover is computed by dividing average operating assets into:

B. unfavorable.

Variable manufacturing overhead is applied to products on the basis of standard direct labor-hours. If the direct labor efficiency variance is unfavorable, the variable overhead efficiency variance will be: A. favorable. B. unfavorable. C. either favorable or unfavorable. D. zero.

C. price variance

When computing standard cost variances, the difference between actual and standard price multiplied by actual quantity yields a(n): A. combined price and quantity variance. B. efficiency variance. C. price variance. D. quantity variance.

D. Purchasing.

Which department should usually be held responsible for an unfavorable materials price variance? A. Production. B. Materials Handling. C. Engineering. D. Purchasing.

D. Common stock

Which of the following is not an operating asset?

wait time + throughput time

delivery cycle time =

B. the purchasing agent.

A labor efficiency variance resulting from the use of poor quality materials should be charged to: A. the production manager. B. the purchasing agent. C. manufacturing overhead. D. the industrial engineering department.

investment center

A segment whose manager has control over costs, revenues, and investments in operating assets.

profit center

A segment whose manager has control over both costs and revenues, but no control over investment funds

cost center

A segment whose manager has control over costs, but not over revenues or investment funds.

A. actual hours exceeded standard hours allowed for the actual output.

If the labor efficiency variance is unfavorable, then A. actual hours exceeded standard hours allowed for the actual output. B. standard hours allowed for the actual output exceeded actual hours. C. the standard rate exceeded the actual rate. D. the actual rate exceeded the standard rate.

process time / throughput time

MCE =

Net operating income / Sales

Margin =

Net operating income / Average operating assets

ROI = (division)

margin x turnover

ROI = (multiplication)

A. actual quantity of inputs X (actual price - standard price)

The general model for calculating a price variance is: A. actual quantity of inputs X (actual price - standard price). B. standard price X (actual quantity of inputs - standard quantity allowed for output). C. (actual quantity of inputs at actual price) - (standard quantity allowed for output at standard price). D. actual price X (actual quantity of inputs - standard quantity allowed for output).

B. based upon the amount of materials used in production.

The materials quantity variance should be computed: A. when materials are purchased. B. based upon the amount of materials used in production. C. based upon the difference between the actual and standard prices per unit times the actual quantity used. D. only when there is a difference between standard and actual cost per unit for the materials.

update the static planning budget to reflect the actual level of activity of the period.

The purpose of a flexible budget is to ____

A. cost center.

The purpose of the Data Processing Department of Falena Corporation is to assist the various departments of the corporation with their information needs free of charge. The Data Processing Department would best be evaluated as a: