ACG Exam 3 Study Guide

A company has a material standard of 1 pound per unit of output. Each pound has a standard price of $25 per pound. During July, a company paid $127, 250 for 4,950 pounds, which they used to produce 4,700 units. What is the direct material price variance?

$3500 unfavorable

A company's static budget estimate of total overhead costs was $100,000 based on the assumption that 10,000 units would be produced and sold. The company estimates that 30% of its overhead is variable, and the remainder is fixed. What would be the total overhead costs according to the flexible budget if 11,222 units were produced and sold?

103,666

A company's static budget estimate of total overhead costs was $100,000 based on the assumption that 10,000 units would be produced and sold. The company estimates that 30% of its overhead is variable, and the remainder is fixed. What would be the total overhead costs according to the flexible budget if 11,715 units were produced and sold?

105,145

A company's static budget estimate of total overhead costs was $100,000 based on the assumption that 10,000 units would be produced and sold. The company estimates that 30% of its overhead is variable , and the remainder is fixed. What would be the total overhead costs according to the flexible budget of 11,916 units were produced and sold?

105,478

ABC company makes premium chocolates. One of the company's products is the Peppo Mint. Peppo Mints are packed 24 in a box. During June, 2,000 boxes were produced. The company paid its direct labor workers a total of $15,480 for their work or $12.90 per hour. According to the standard cost card for Bango mints, each box should require 0.3 direct labor hours at a cost of $12.00 per hour. What is the labor price variance?

1080

ABC plans to sell 50,000 units of product 751 in June, and each of these units requires five sq. ft. of raw material. If the company purchases 250,000 sq. ft. of raw material during the month, the estimated raw material inventory on June 30 would be:

17,200 sq ft

ABC plans to sell 60,000 units of product of 751 in June, and each of these units requires five sq. ft. of raw material. Additional data is as follows: If the company purchases 250,000 sq. ft. of raw material during the month, the estimated raw material inventory on June 30 would be:

19,200 sq. ft.

ABC Co. purchases direct materials each month. Each payment history shows that 0.75 is paid in the month of purchase, with the remaining balance paid the month after purchase. Prepare a cash payment schedule for March if in January through March, it purchased $35000, $37000, and $39000, respectively.

38,500

ABC's finished product requires four units of raw materials. On the basis of this information, how many finished products were manufactured during June?

44,250

ABC plans to sell 14,000 units of a particular product during July, and expects sales to increase at the rate of 10% per month during the remainder of the year. The June 30th and September 30th ending inventories are anticipated to be 1,200 units and 1,050 units, respectively. On the basis of this information, how many units should ABC purchase for the quarter ended September 30?

46,190

A company has a material standard of 1.1 pound per unit of output. Each pound has a standard price of $21 per pound. During July, a company paid $118,800 for 5,100 pounds, which they used to produce 4,900 units. What is the direct materials quantity variance?

6,090

How many units are estimated to be sold if ABC Co., has a planned production of 877,304, a desired beginning inventory of 160,000, and a desired ending inventory of 100,000 units?

937,304

What is the proper sequencing of the following budgets ? A) Budgeted balance sheet B) Selling and Administrative Budget C) Sales Budget D) Budgeted Income Statement

C, B, D, A

In an activity-based flexible budget, each overhead item has the same cost driver, identified by flexible overhead budget for that cost item

False

Variances are computed by taking the difference between the product cost and standard cost.

False

What is the primary difference between a static budget and a flexible budget?

The static budget is prepared for a single level of activity, while a flexible budget is adjusted for different activity levels

A budget serves as a benchmark against which:

actual results can be compared

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 of the following could be found on a flexible overhead budget?

all of the listed choices are correct

Which system(s) use a predetermined overhead rate?

both normal and standard costing

A company's plan for the acquisition of long-lived assets, such as buildings and equipment, is commonly called a:

capital budget

Which of the following should have the strongest cause and effect relationship with overhead costs?

cost drivers

The difference between the actual price and the standard price, multiplied by the actual quantity of materials purchased, is the...

direct materials price variance

A company's plan for the issuance of stock or incurrence of debt is commonly called a:

financial budget

Which budget evaluates the results of operations at the actual level of activity?

flexible budget

Which of the following is a possible cause of an unfavorable labor efficiency variance?

hiring unqualified workers

A static budget:

is based on one anticipated activity level

What are some reasons for a material quantity variance?

more qualified workers

The direct materials budget is prepared using which budget's information?

production budget

The individual generally responsible for the direct material price variance is the:

purchasing manager

Which of the following is a possible cause of an unfavorable material quantity variance?

purchasing substandard material

Which of the following is a predetermined estimated cost that can be used in the calculation of a variance?

standard cost

The comprehensive set of budgets that serves as a company's overall financial plan is commonly known as...

the master budget

Which department would normally begin an investigation regarding an unfavorable materials price variance?

the purchasing department

The activity- based flexible budget provides a more accurate benchmark against which to compare actual costs than does a conventional flexible budget

true

This variance is the difference involving spending more or using more than the standard amount

unfavorable variance

With respect to overhead, what is the difference between normal costing and standard costing?

use of standard hours vs. actual hours

When is the material price variance unfavorable?

when the actual price paid is greater than the standard price

When is the material quantity variance favorable?

when the actual quantity used is less than the standard quanity

When is the material quantity variance favorable?

when the actually quantity used is less than the standard quantity