1. Which of the following amounts of a flexible budget remain constant when the sales volume? changes?
A. total variable expenses
B. total sales revenue
C. total contribution margin
D. total fixed costs
2. Which of the following amounts of a flexible budget change with changes in sales? volume?
A. total fixed costs
B. total contribution margin
C. selling price per unit
D. variable expense per unit
3. Allen Manufacturing makes staplers. The budgeted selling price is $12 per? stapler, the variable costs are $3 per? stapler, and budgeted fixed costs are $11,000. What is the budgeted operating income for 4,200 ?staplers?
A. $ 12,600
B. $ 37,800
C. $ 50,400
D. $ 26,800
4. Flexible budget variance is the difference between? the:
A. flexible budget and static budget due to differences in fixed costs.
B. expected results in the flexible budget for the units expected to be sold and the static budget.
C. actual results and the expected results in the flexible budget for the actual units sold.
D. flexible budget and actual amounts due to differences in volumes.
5. Onyx Company has prepared a static budget at the beginning of the month. At the end of the? month, the following information has been retrieved from the records.
Static? budget:
Sales? volume: 2,000? units: Price:? $50 per unit
Variable? expense: $12 per? unit: Fixed? expenses: $25,000 per month
Operating? income: $51,000
Actual? results:
Sales? volume: 1,800? units: Price:? $58 per unit
Variable? expense: $16 per? unit: Fixed? expenses: $35,000 per month
Operating? income: $40,600
Calculate the sales volume variance for variable expenses.
A. ?$3,960 F
B. ?$2,970 U
C. ?$3,800 U
D. ?$2,400 F
6. A company is analyzing its monthminus end results by comparing it to both static and flexible budgets. During the previous? month, the actual variable expenses per unit were lower than the expected variable costs per unit as per the static budget. This difference results in? a(n):
A. unfavorable flexible budget variance for variable expenses.
B. favorable flexible budget variance for variable expenses.
C. unfavorable sales volume variance for variable expenses.
D. favorable sales volume variance for variable expenses.
7. An unfavorable flexible budget variance in variable expenses suggests? a(n):
A. increase in variable expenses per unit.
B. decrease in volume.
C. increase in price.
D. decrease in fixed costs.
8. A standard is a? price, cost, or quantity that is expected under normal conditions.
True
False
9. An efficiency variance measures how well a company keeps unit prices of material and labor inputs within standards.
True
False
10. Which of the following is the correct formula to measure cost? variance?
A. Cost Variance? = (Actual Cost? + Standard? Cost) + Actual Quantity
B. Cost Variance? = (Actual Cost? + Standard? Cost) / Actual Quantity
C. Cost Variance? = (Actual Cost - Standard? Cost) x Actual Quantity
D. Cost Variance? = (Actual Cost - Standard? Cost) - Actual Quantity
11. Which of the following formulae is the correct formula to measure the efficiency? variance?
A. Efficiency Variance? = (Actual Quantity? / Standard? Quantity) x Standard Cost
B. Efficiency Variance? = (Actual Quantity? + Standard? Quantity) - Standard Cost
C. Efficiency Variance? = (Actual Quantity x Standard? Quantity) / Standard Cost
D. Efficiency Variance? = (Actual Quantity - Standard? Quantity) x Standard Cost
12. Which of the following will result in an unfavorable direct labor cost? variance?
A. when actual direct labor hours exceed standard direct labor hours
B. when the actual direct labor rate exceeds the standard direct labor rate
C. when the actual direct labor rate is less than the standard direct labor rate
D. when actual direct labor hours are less than standard direct labor hours
13. What do cost variances? measure?
A. the difference between actual and standard cost
B. the volume discounts companies receive when ordering materials in large quantities
C. the change in costs over time
D. the difference between the price the company pays and the price its competitors pay
14. Which of the following does the efficiency variance? measure?
A. the difference between the quantity used by the company and the quantity used by its competitors
B. the difference between actual and standard quantity used
C. the change in quantities used over time
D. how quickly materials are processed into finished goods
15. Only unfavorable variances should be? investigated, if? substantial, to determine their causes.
True
False
16. A favorable direct materials cost variance occurs when the actual direct materials costs incurred is less than the standard direct materials cost.
True
False
17. What does a favorable direct materials cost variance? indicate?
A. The actual cost of materials purchased was less than the standard cost of materials purchased.
B. The actual quantity of materials used was less than the standard quantity.
C. The actual cost of materials purchased was greater than the standard cost of materials purchased.
D. The actual quantity of materials used was greater than the standard quantity.
18. The total production cost flexible budget variance is obtained by adding direct labor efficiency variance and fixed overhead volume variance.
True
False
19. An unfavorable variance for an expense means more expense has been incurred than planned.
True
False
20. A favorable variance reflects a decrease in operating income.
True
False