Question 1

Flexible budgeting builds the effect of changes in level of activity into the budget system.

Accepted Answer

A) True 
 B)False

Question 2

Refer to the information provided for Answer Corporation.The amount of the direct labor time variance is:

Accepted Answer

A)  $1,200 favorable.
B)  $1,140 unfavorable.
C)  $1,200 unfavorable.
D)  $1,140 favorable.E) A) and B)
F) A) and C)

Question 3

Refer to the information provided for Cape Corporation.The amount of direct material B purchased during the year is:

Accepted Answer

A)  $1,224,000.
B)  $1,390,600.
C)  $1,088,000.
D)  $1,057,400.E) A) and B)
F) A) and C)

Question 4

Production and sales estimates for May for the Hudson Co.are as follows:

Accepted Answer

A)  22,000.
B)  18,400.
C)  23,800.
D)  20,200.E) A) and B)
F) B) and C)

Question 5

Refer to the information provided for Kohlman Company.The cash payments for manufacturing in the month of June are:

Accepted Answer

A)  $294,000.
B)  $235,200.
C)  $183,200.
D)  $381,500.E) All of the above
F) A) and B)

Question 6

Standard costs should be revised when they differ from actual costs.

Accepted Answer

A) True 
 B)False

Question 7

The standard costs and actual costs for direct labor for the manufacture of 2,500 actual units of product are as follows:

Accepted Answer

A)  $4,440 unfavorable.
B)  $4,500 favorable.
C)  $4,440 favorable.
D)  $4,500 unfavorable.E) B) and D)
F) B) and C)

Question 8

Standard and actual costs for direct materials for the manufacture of 2,000 units of product were as follows:

Accepted Answer

(a) Actual quantity 2,750 lbs. Standard ...

Question 9

Which of the following budgets is prepared using the production budget?

Accepted Answer

A)  Selling and administrative expenses
B)  Direct materials purchases
C)  Sales
D)  Capital expendituresE) All of the above
F) A) and B)

Question 10

The variable factory overhead controllable variance measures:

Accepted Answer

A)  operating results at less than normal capacity.
B)  the efficiency of using variable overhead resources.
C)  operating results at more than normal capacity.
D)  control over fixed overhead costs.E) All of the above
F) None of the above

Question 11

Refer to the information provided for Executive Inc.What is the direct labor time variance?

Accepted Answer

A)  $17,400 favorable
B)  $17,400 unfavorable
C)  $18,000 favorable
D)  $18,000 unfavorableE) B) and C)
F) A) and D)

Question 12

Favorable volume variances are never harmful since achieving them encourages managers to run the factory above normal capacity.

Accepted Answer

A) True 
 B)False

Question 13

If the standard to produce certain quantity of product is 16,000 hours at a factory overhead rate of $5 ($3 fixed,$2 variable),actual variable factory overhead is $26,400,actual fixed factory overhead is $45,000,and 100% of productive capacity is 15,000 hours,the volume variance is $3,000 favorable.

Accepted Answer

A) True 
 B)False

Question 14

Refer to the information provided for Benjamin Corporation.The cash collections from accounts receivable in November are:

Accepted Answer

A)  $305,200.
B)  $294,000.
C)  $235,200.
D)  $381,500.E) A) and D)
F) C) and D)

Question 15

Nonmanufacturing activities are usually controlled using a static budget rather than a standard costing system.

Accepted Answer

A) True 
 B)False

Question 16

In most businesses,cost standards are established principally by accountants.

Accepted Answer

A) True 
 B)False

Question 17

Refer to the information provided for Efficient Corporation.The direct labor time variance is:

Accepted Answer

A)  $31,725 favorable.
B)  $32,400 favorable.
C)  $89,100 unfavorable.
D)  $121,500 unfavorable.E) B) and C)
F) All of the above

Question 18

Assuming that the standard fixed overhead rate is based on full capacity,the cost of available but unused productive capacity is indicated by the:

Accepted Answer

A)  factory overhead cost volume variance.
B)  direct labor cost time variance.
C)  direct labor cost rate variance.
D)  factory overhead cost controllable variance.E) A) and B)
F) None of the above

Question 19

The most effective means of presenting standard factory overhead cost variance data is through a factory overhead cost variance report.

Accepted Answer

A) True 
 B)False

Question 20

The formula to compute direct material quantity variance is:

Accepted Answer

A)  actual costs - standard costs.
B)  standard costs - actual costs.
C)  (actual quantity × standard price) - standard costs.
D)  actual costs - (standard price × standard costs) .E) B) and C)
F) A) and B)

Exam 13: Budgeting and Standard Cost Systems

Correct AnswerverifiedShow Answer

Refer to the information provided for Kohlman Company.The cash payments for manufacturing in the month of June are:

Correct AnswerverifiedShow Answer

Refer to the information provided for Answer Corporation.The amount of the direct labor time variance is:

Correct AnswerverifiedShow Answer

Standard and actual costs for direct materials for the manufacture of 2,000 units of product were as follows:

Correct Answerverified(a) Actual quantity 2,750 lbs. Standard ...View AnswerShow Answer

Standard costs should be revised when they differ from actual costs.

Correct AnswerverifiedShow Answer

Refer to the information provided for Cape Corporation.The amount of direct material B purchased during the year is:

Correct AnswerverifiedShow Answer

Production and sales estimates for May for the Hudson Co.are as follows:

Correct AnswerverifiedShow Answer

The formula to compute direct material quantity variance is:

Correct AnswerverifiedShow Answer

Which of the following budgets is prepared using the production budget?

Correct AnswerverifiedShow Answer

Refer to the information provided for Efficient Corporation.The direct labor time variance is:

Correct AnswerverifiedShow Answer

Nonmanufacturing activities are usually controlled using a static budget rather than a standard costing system.

Correct AnswerverifiedShow Answer

Assuming that the standard fixed overhead rate is based on full capacity,the cost of available but unused productive capacity is indicated by the:

Correct AnswerverifiedShow Answer

The standard costs and actual costs for direct labor for the manufacture of 2,500 actual units of product are as follows:

Correct AnswerverifiedShow Answer

Favorable volume variances are never harmful since achieving them encourages managers to run the factory above normal capacity.

Correct AnswerverifiedShow Answer

Refer to the information provided for Executive Inc.What is the direct labor time variance?

Correct AnswerverifiedShow Answer

Refer to the information provided for Benjamin Corporation.The cash collections from accounts receivable in November are:

Correct AnswerverifiedShow Answer

The most effective means of presenting standard factory overhead cost variance data is through a factory overhead cost variance report.

Correct AnswerverifiedShow Answer

In most businesses,cost standards are established principally by accountants.

Correct AnswerverifiedShow Answer

The variable factory overhead controllable variance measures:

Correct AnswerverifiedShow Answer

Flexible budgeting builds the effect of changes in level of activity into the budget system.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
(a) Actual quantity 2,750 lbs. Standard ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified