ACG 2071 EXAM 3 PRACTICE QUESTIONS

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?

$3,500

An examination of ABC Corp's inventory accounts revealed the following information: Raw materials, June 1: 45,400 units Raw materials, June 30: 50,400 units Purchases of raw materials during June: 182,000 units 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

A static budget

is based on one anticipated activity level

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

ABC Company makes premium chocolates. One of the company's products is the Peppo Mint. Peppo Mints are packed 24 per 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 Co has forecast sales to be $ 148,601 in February, $145,000 in March, $170,000 in April, and $180,000 in May. The average cost of goods sold is 60% of sales. All sales are on made on credit and sales are collected 60% in the month of sale, and 40% the month following

146,440

ABC plans to sell 50,000 units of product 75I in June, and each of these units requires five sq. ft. of raw material. Additional data is as follows: Product No. 75IRaw MaterialActual June 1 Inventory6,600 11,200 sq ftEstimated June 30 Inventory5,400 ? sq ft 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 Co. is budgeting sales of 25,000 units and already has 5,023 units in beginning inventory. How many units must be produced to also meet the 7,083 units required in ending inventory?

27,060

An examination of ABC Corp's inventory accounts revealed the following information: Raw materials, June 1: 45,400 units Raw materials, June 30: 50,400 units Purchases of raw materials during June: 182,000 units 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

Flexible budgets reflect a company's anticipated costs based on variations in:

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

A company's expected receipts from sales and planned disbursements to pay bills is commonly called a:

cash budget

A company's expected receipts from sales and planned disbursements to pay bills is commonly called a:

cash budgets

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

cbda

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

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

false

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

financial budget

Which budgets 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

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 versus actual hours

When is the materials price variance favorable?

when the actual price is less than the standard price

When is the material price variance unfavorable?

when the actual price paid is greater than the standard price

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 budget serves as a benchmark against which

Actual results can be compared

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

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

True

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

indirect labor at different activity levels depreciation expense for plant and equipment indirect materials at different activity levels multiple cost pools all of the above

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 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

The _________________ department would generally begin an initial investigation of an unfavorable material price variance, and the _______________department would generally begin an initial investigation of an unfavorable materials quantity variance. Correct Answer

purchasing; production

A manufacturing firm would begin preparation of its master budget by constructing a:

sales budget

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

When is the material quantity variance favorable?

when the actual quantity used is less than the standard quantity