Managerial Reporting Final

all of the above

A budget aids in a. motivation. b. communication. c. coordination. d. all of the above.

simplify costing procedures

A purpose of standard costing is to a. eliminate the need to account for year-end underapplied or overapplied manufacturing overhead. b. replace budgets and budgeting. c. eliminate the need for actual costing for external reporting purposes. d. simplify costing procedures.

actual cost and total cost applied for the actual output of the period

A total variance is best defined as the difference between total a. standard cost and total cost applied to production. b. actual cost and total cost applied for the actual output of the period. c. actual cost and total cost applied for the standard output of the period. d. actual cost and total standard cost of the actual input of the period.

specifies tasks to make a unit and the times allowed for each task

An operations flow document a. charts the shortest path by which to arrange machines for completing products. b. tracks the cost and quantity of material through an operation. c. tracks the network of control points from receipt of a customer's order through the delivery of the finished product. d. specifies tasks to make a unit and the times allowed for each task

allocated among work in process, finished goods, and cost of goods sold

At the end of a period, a significant material quantity variance should be a. allocated among Raw Material, Work in Process, Finished Goods, and Cost of Goods Sold. b. closed to Cost of Goods Sold. c. carried forward as a balance sheet account to the next period. d. allocated among Work in Process, Finished Goods, and Cost of Goods Sold

material purchases budget

Both the budgeted quantity of material to be purchased and the budgeted quantity of material to be consumed can be found in the a. cash budget. b. pro forma income statement. c. production budget. d. material purchases budget

1,040 U

Brennan Company The following information is for Brennan Company's September production: Standards: Material 4.0 feet per unit @ $3.75 per foot Labor 3.0 hours per unit @ $8.25 per hour Actual: Production:3,500 units produced during the month Material: 14,200 feet used; 14,700 feet purchased @ $3.70 per foot Labor: 10,400 direct labor hours @ $8.35 per hour (Round all answers to the nearest dollar.) Refer to Brennan Company. What is the labor rate variance? a. $1,040 F b. $1,040 U c. $1,420 F d. $1,420 U

5,813 U

Buckingham Company Buckingham Company uses a standard cost system for its production process and applies overhead based on direct labor hours. The following information is available for May when Buckingham produced 4,500 units: Standard: DLH per unit 2.50 Variable overhead per DLH $1.75 Fixed overhead per DLH $3.10 Budgeted variable overhead $21,875 Budgeted fixed overhead $38,750 Actual: Direct labor hours 10,000 Variable overhead $26,250 Fixed overhead $38,000 Refer to Buckingham Company. Using the two-variance approach, what is the controllable variance? a. $4,375 U b. $5,813 U c. $4,375 F d. $5,813 F

1,800 U

Commodore Company Commodore Company uses a standard cost system for its production process and applies overhead based on direct labor hours. The following information is available for September when Commodore produced 5,000 units: Standard: DLH per unit 3.00 Variable overhead per DLH $1.80 Fixed overhead per DLH $3.25 Budgeted variable overhead $27,250 Budgeted fixed overhead $49,500 Actual: Direct labor hours 16,000 Variable overhead $31,325 Fixed overhead $49,750 Refer to Commodore Company. Using the four-variance approach, what is the variable overhead efficiency variance? a. $ 250 F b. $1,800 F c. $ 250 U d. $1,800 U

they can participate in its development

Managers may be more willing to accept a budget if a. it is continuous. b. they can participate in its development. c. it is very hard to attain. d. it is imposed.

15,000

Priceless Memories Company manufactures toy trains. Information on Priceless Memories Company's labor costs follow: Sales commissions $6 per train Administration $12,000 per month Indirect factory labor $4 per train Direct factory labor $6 per train The following information applies to the upcoming month of July for Priceless Memories Company: Budgeted production 1,500 units Budgeted sales 1,300 units Refer to Priceless Memories Company. What is Priceless Memories' budgeted factory labor cost for July? a. $13,000 b. $34,000 c. $15,000 d. $24,000

is greater when managers are allowed to participate in the budgeting process

Slack in operating budgets a. results from unintentional managerial acts. b. makes an organization more efficient and effective. c. requires managers to work harder to achieve the budget. d. is greater when managers are allowed to participate in the budgeting process.

18

Sullivan Company is preparing its Manufacturing Overhead budget for the second quarter of the year. Budgeted variable factory overhead is $3.00 per unit produced; budgeted fixed factory overhead is $75,000 per month, with $16,000 of this amount being factory depreciation. Refer to Sullivan Company. If the budgeted production for May is 5,000 units, then the total budgeted factory overhead per unit: a. $18 b. $20 c. $15 d. $22

140,000

Emerald Company has the following expected pattern of collections on credit sales: 70 percent collected in the month of sale, 15 percent in the month after the month of sale, and 14 percent in the second month after the month of sale. The remaining 1 percent is never collected. At the end of May, Emerald Company has the following accounts receivable balances: From April sales $21,000 From May sales 48,000 Emerald's expected sales for June are $150,000. What were total sales for April? a. $72,414 b. $70,000 c. $150,000 d. $140,000

mostly incurred to provide the capacity to product and are best controlled on a total basis at the time they are originally negotiated

Fixed overhead costs are a. best controlled on a unit-by-unit basis of products produced. b. mostly incurred to provide the capacity to produce and are best controlled on a total basis at the time they are originally negotiated. c. best controlled as to spending during the production process. d. constant on a per-unit basis at all different activity levels within the relevant range.

sales budget

If the chief accountant of a firm has to prepare an operating budget for the coming year, the first budget to be prepared is the a. purchases budget. b. cash budget. c. sales budget. d. capital budget

normally controllable if they are internal

Key variables that are identified in strategic planning are a. normally controllable if they are internal. b. normally uncontrollable if they are internal. c. seldom if ever controllable. d. normally controllable if they occur in a domestic market.

material usage

Of the following budgets, which one is least likely to be determined by the dictates of top management? a. sales b. material usage c. general and administrative d. revenues

6,330 U

Pearce Company Pearce Company uses a standard cost system for its production process. Pearce Company applies overhead based on direct labor hours. The following information is available for July: Standard: Direct labor hours per unit 2.20 Variable overhead per hour $2.50 Fixed overhead per hour (based on 11,990 DLHs) $3.00 Actual: Units produced 4,400 Direct labor hours 8,800 Variable overhead $29,950 Fixed overhead $42,300 Refer to Pearce Company Using the four-variance approach, what is the fixed overhead spending variance? a. $935 F b. $6,330 U c. $15,900 U d. $6,930 U

19,010 U

Pearce Company Pearce Company uses a standard cost system for its production process. Pearce Company applies overhead based on direct labor hours. The following information is available for July: Standard: Direct labor hours per unit 2.20 Variable overhead per hour $2.50 Fixed overhead per hour (based on 11,990 DLHs) $3.00 Actual: Units produced 4,400 Direct labor hours 8,800 Variable overhead $29,950 Fixed overhead $42,300 Refer to Pearce Company Using the one-variance approach, what is the total variance? a. $19,010 U b. $6,305 U c. $4,730 U d. $12,705 U

6,930 U

Pearce Company Pearce Company uses a standard cost system for its production process. Pearce Company applies overhead based on direct labor hours. The following information is available for July: Standard: Direct labor hours per unit 2.20 Variable overhead per hour $2.50 Fixed overhead per hour (based on 11,990 DLHs) $3.00 Actual: Units produced 4,400 Direct labor hours 8,800 Variable overhead $29,950 Fixed overhead $42,300 Refer to Pearce Company Using the two-variance approach, what is the noncontrollable variance? a. $26,040 F b. $6,930 U c. $13,260 U d. $0

2,000 F

Teague Company uses a two-way analysis of overhead variances. Selected data for the March production activity are as follows: Actual variable OH incurred $196,000 Variable OH rate per MH $6 Standard MHs allowed 33,000 Actual MHs 32,000 Assuming that budgeted fixed overhead costs are equal to actual fixed costs, the controllable variance for March is a. $4,000 U. b. $4,000 F. c. $6,000 F. d. $2,000 F.

static budget

The master budget is a a. flexible budget. b. qualitative expression of a future goal. c. qualitative expression of a prior goal. d. static budget

is geared to only one level of production and sales

The master budget is a static budget because it a. is geared to only one level of production and sales. b. never changes from one year to the next. c. always contains the same operating and financial budgets. d. covers a preset period of time.

cash payment for material each period

The material purchases budget tells a manager all of the following except the a. cost of material to be purchased each period. b. quantity of material to be purchased each period. c. quantity of material to be consumed each period. d. cash payment for material each period.

the material quantity variance

The sum of the material mix and material yield variances equals a. the material quantity variance. b. the total material variance. c. the material purchase price variance. d. none of the above.

uncontrollable rather than controllable

When actual performance varies from the budgeted performance, managers will be more likely to revise future budgets if the variances were a. controllable rather than uncontrollable. b. favorable rather than unfavorable. c. small. d. uncontrollable rather than controllable.

no, yes, yes

Which of the following standards can commonly be reached or slightly exceeded by workers in a motivated work environment? Ideal Practical Expected annual a. no yes no b. yes yes no c. no yes yes d. no no no

favorable variances are not necessarily good variances

Which of the following statements regarding standard cost systems is true? a. Managers will investigate all variances from standard. b. Favorable variances are not necessarily good variances. c. The production supervisor is generally responsible for material price variances. d. Standard costs cannot be used for planning purposes since costs normally change in the future.

442,500

Whitney Corporation, a reseller of women's fashions, has budgeted its activity for March. The budget information is presented below: I. Sales are $550,000. All sales are cash. II. Merchandise inventory on February 28 is $300,000 III. Budgeted depreciation for March is $35,000. IV. Cash in bank on March 1 is $25,000. V. Selling and administrative expenses are budgeted at $60,000 for March and are paid in cash. VI. The planned merchandise inventory on March 31 is $270,000. VII. The invoice cost for merchandise purchases represents 75% of sales price. All purchases are paid for in cash. Refer to Whitney Corporation. The budgeted cash disbursements for March are: a. $477,500 b. $382,500 c. $472,500 d. $442,500