Exam 3
The planning budget, based on 1,000 units, shows revenue of $24,000 and $6,250 for supplies. A total of 1,200 units were actually produced and sold. The flexible budget will show
$28,800 revenue $7,500 for supplies
If the planned budget revenue for 5,000 units is $120,000, the flexible budget revenue for 4,500 units is
108,000
Which of the following statements is true?: Quantity variances are computed for direct materials, direct labor and fixed overhead. Price variances can only be computed for direct materials and direct labor. A labor efficiency variance is a quantity variance. The variance that computes the price difference for materials is called a material rate variance.
A labor efficiency variance is a quantity variance.
The material quantity variance measures the difference between the ______ quantity of materials used in production and the_____ quantity of materials allowed for the actual output, multiplied by the standard price per unit of materials
Blank 1: actual Blank 2: standard
A(n) ________ __________ is the difference between how much of an input was actually used and how much should have been used and is stated in dollar terms using the standard price of the input
Blank 1: quantity Blank 2: variance
A materials price variance is equivalent to a labor________ variance and a materials quantity variance is equivalent to a labor_____ variance
Blank 1: rate Blank 2: efficiency
The material variance terms price and quantity are replaced with the terms _________ and ________ when computing direct labor variances.
Blank 1: rate or rates Blank 2: hours or hour
The labor rate variance measures the productivity of direct labor.
False
Estimates of what revenues and costs should have been based on the actual level of activity are shown on the _____ budget
Flexible
A budget that is prepared at the beginning of the period for a specific level of activity is called a______ budget
Planning
an unchanged planning budget is known as a(n) __ planning budget.
Static
The materials price variance is calculated using the Blank______ quantity of the input purchased.
actual
A price variance is the difference between the
actual price and the standard price multiplied by the actual amount of the input
When preparing a flexible budget, the level of activity
affects variable costs only
The materials price variance is the difference between the actual price of materials
and the standard price for materials with the difference multiplied by the actual quantity of materials
The variance analysis cycle
begins with the preparation of performance reports
A quantity variance is: calculated using the standard price of the input calculated using the actual price of the input based only on the standard quantity of inputs based only on the actual quantity of inputs
calculated using the standard price of the input
A spending variance is the
difference between the actual amount of the cost and how much a cost should have been, given the actual level of activity
A revenue variance is the
difference between the actual total revenue and what the total revenue should have been, given the actual level of activity for the period
(Actual cost per unit - standard cost per unit) × actual quantity = the materials variance
price
The materials quantity variance is generally the responsibility of the ___________ department manager.
production
The difference between the actual amount of materials used in production and the standard amount of materials allowed for the actual output, multiplied by the standard price per unit of materials is the materials
quantity
The difference between the actual total revenue and what the total revenue should have been, given the actual level of activity for the period is called a(n)------- variance.
revenue or sales
The difference between how much a cost should have been, given the actual level of activity, and the actual amount of the cost is a(n)
spending variance
The labor efficiency variance is the difference between actual hours used and standard hours allowed multiplied by the ______ hourly rate.
standard
The materials price variance is calculated using the
standard price of the input actual price of the input actual quantity of the input purchased