chapter 9 final

Assume that the amount of one of a company's variable expenses in its flexible budget is $40,000. The actual amount of the expense is $42,000 and the amount in the company's planning budget is $41,800. The activity variance for this expense is:

$1,800 F

Assume that the amount of one of a company's variable expenses in its flexible budget is $40,000. The actual amount of the expense is $42,000 and the amount in the company's planning budget is $44,000. The spending variance for this expense is:

$2,000 U

Assume that the cost formula for one of a company's variable expenses is $5.00 per unit. The company's planned level of activity was 2,000 units and its actual level of activity was 2,200 units. The actual amount of this expense was $10,800. The spending variance for this expense is:

$200 F

Assume that the amount of one of a company's fixed expenses in its flexible budget is $46,000. The actual amount of the expense is $49,400 and the amount in the company's planning budget is $46,000. The spending variance for this expense is:

$3,400 U

Assume that the amount of one of a company's variable expenses in its flexible budget is $40,000. The actual amount of the expense is $42,000 and the amount in the company's planning budget is $44,000. The activity variance for this expense is:

$4,000 F

Petrus Framing's cost formula for its supplies cost is $1,800 per month plus $11 per frame. For the month of March, the company planned for activity of 620 frames, but the actual level of activity was 626 frames. The actual supplies cost for the month was $8,900. The activity variance for supplies cost in March would be closest to:

$66 U

Assume the following information for one of a company's variable expenses: The amount of the expense in the planning budget is $9,000. The cost formula is $9.00 per hour. The actual level of activity is 900 hours. The spending variance is $220 unfavorable. The actual amount of the expense must be:

$8,320

Assume the following information for one of a company's variable expenses: The activity variance is $820 favorable. The actual amount of the expense is $8,300. The planned level of activity is 1,000 hours. The actual level of activity is 900 hours. The cost formula for this expense must be:

$8.20 per hour.

Assume that the cost formula for one of a company's variable expenses is $5.00 per unit. The company's planned level of activity was 2,000 units and its actual level of activity was 2,200 units. The actual amount of this expense was $10,100. The spending variance for this expense is:

$900 F

Which of the following statements is true? A. The revenue variance will be favorable if the revenue in the flexible budget is less than the actual revenue. B. The revenue variance will be favorable if the revenue in the flexible budget exceeds the actual revenue. C. The revenue variance will usually equal zero. D. The revenue variance can be favorable or unfavorable depending on the planned level of activity.

A. The revenue variance will be favorable if the revenue in the flexible budget is less than the actual revenue.

Which of the following statements is true? A. The spending variance for a fixed expense will be favorable if the amount of the expense contained in the flexible budget is greater than the actual amount of the expense. B.The spending variance for a fixed expense will be favorable if the amount of the expense contained in the flexible budget is less than the actual amount of the expense. C. The spending variance for a fixed expense can be favorable or unfavorable depending on whether the actual expense is greater than or less than the planned expense. D. The spending variance for a fixed expense will equal zero when the planned level of activity equals the actual level of activity.

A. The spending variance for a fixed expense will be favorable if the amount of the expense contained in the flexible budget is greater than the actual amount of the expense.

Which of the following statements is true? A. A flexible budget is an estimate of what revenues and costs should have been given the planned level of activity for the period. B. A flexible budget is an estimate of what revenues and costs should have been given the actual level of activity for the period. C. A flexible budget is a comparison of actual revenues and costs at the actual level of activity to the actual revenues and costs incurred at the planned level of activity. D. A flexible budget is a comparison of actual revenues and costs to what they should have been given the planned level of activity.

B. A flexible budget is an estimate of what revenues and costs should have been given the actual level of activity for the period.

Which of the following statements is true? A. A planning budget is prepared before the period begins and is valid for only the actual level of activity. B. A planning budget is prepared before the period begins and is valid for only the planned level of activity. C. A planning budget is prepared after the period ends and is valid for only the planned level of activity. D. A planning budget is prepared after the period ends and is valid for only the actual level of activity.

B. A planning budget is prepared before the period begins and is valid for only the planned level of activity.

Which of the following statements is true? A. The activity variance for a variable expense will be unfavorable if the actual level of activity is less than the planned level of activity. B. The activity variance for a variable expense will be unfavorable if the actual level of activity is greater than the planned level of activity. C. The activity variance for a variable expense can be favorable or unfavorable depending on whether the actual expense incurred is greater than or less than the planned expense. D. The activity variance for a variable expense will usually equal zero.

B. The activity variance for a variable expense will be unfavorable if the actual level of activity is greater than the planned level of activity.

Which of the following statements is true? A. The activity variance for revenue can be favorable or unfavorable depending on whether the actual revenue earned is greater than or less than the planned revenue. B. The activity variance for revenue will be unfavorable if the actual level of activity is less than the planned level of activity. C. The activity variance for revenue will be unfavorable if the actual level of activity is greater than the planned level of activity. D. The activity variance for revenue will usually equal zero.

B. The activity variance for revenue will be unfavorable if the actual level of activity is less than the planned level of activity.

Which of the following statements is true? A. The revenue variance can be favorable or unfavorable depending on the formula used to create the flexible budget. B. The revenue variance will equal zero if the actual revenue earned equals the revenue expected for the actual level of activity. C. The revenue variance will be favorable if the revenue in the flexible budget exceeds the revenue in the planning budget. D. The revenue variance can be favorable or unfavorable depending on the planned level of activity.

B. The revenue variance will equal zero if the actual revenue earned equals the revenue expected for the actual level of activity.

Which of the following statements is true? A. The spending variance for a variable expense will usually equal zero. B. The spending variance for a variable expense will be favorable if the amount of the expense contained in the flexible budget is greater than the actual amount of the expense. C. The spending variance for a variable expense will be favorable if the amount of the expense contained in the flexible budget is less than the actual amount of the expense. D. The spending variance for a variable expense can be favorable or unfavorable depending on whether the actual expense is greater than or less than the planned expense.

B. The spending variance for a variable expense will be favorable if the amount of the expense contained in the flexible budget is greater than the actual amount of the expense.

Which of the following statements is true? A. The activity variance for a fixed expense will usually be unfavorable. B. The activity variance for a fixed expense will usually be favorable. C. The activity variance for a fixed expense will equal zero. D. The activity variance for a fixed expense can be favorable or unfavorable depending on the actual level of activity.

C. The activity variance for a fixed expense will equal zero.

Assume that a company's planned level of activity is 1,000 hours and its actual level of activity is 1,100 hours. Based on this information, the company's activity variances for its mixed expenses will:

all be unfavorable.

Assume that a company's planned level of activity is 1,000 hours and its actual level of activity is 1,100 hours. Based on this information, the company's activity variances for its variable expenses will:

all be unfavorable.

Assume that a company's planned level of activity is 1,000 hours and its actual level of activity is 1,100 hours. Based on this information, the company's activity variances for its fixed expenses will:

all be zero.

When using a flexible budget, a decrease in activity within the relevant range:

decreases total costs.

Assume that a company's planned level of activity is 1,000 hours and its actual level of activity is 1,100 hours. Based on this information, the company's activity variance for revenue will be:

favorable

A revenue variance is calculated by comparing the:

flexible budget to the actual results.

A spending variance is calculated by comparing the:

flexible budget to the actual results.

An activity variance is calculated by comparing the:

planning budget to the flexible budget.