Problem 1: The purchasing agent of an organization acquired some raw materials at a bargain price, even though she knew that their quality was lower than that of the materials customarily used. This action resulted in a favorable raw materials purchase price variance that might very well have been more than offset by:
a. an unfavorable raw materials usage variance.
b. a favorable direct labor efficiency variance.
c. an unfavorable variable overhead spending variance.
d. an unfavorable direct labor rate variance.
Problem 2: The total budget variance is caused by two factors:
a. quantity and price.
b. direct and indirect relationships.
c. fixed and variable cost behavior.
d. time and materials.
Problem 3: If the net of all variances is immaterial relative to the total production costs incurred during the period, the net variance is:
a. treated as an adjustment to manufacturing overhead.
b. ignored.
c. treated as an adjustment to cost of goods sold.
d. treated as an adjustment to work in process, finished goods, and cost of goods sold.
Problem 4: The term transfer price refers to:
a. The price at which a product or service is sold to a government entity.
b. The price at which a product or service is sold by one segment to another related segment.
c. The price at which a product or service is sold by a segment to an outside party.
d. None of the above.