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Exam 24: Flexible Budgets and Standard Costs

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Question 71

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A flexible budget expresses all costs on a per unit basis.

A) True
B) False

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Question 72

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Abrams, Inc., provides the following results of March's operations: Required:(a) Determine the total overhead cost variance for March. (b) Applying the management by exception approach, which of the variances shown are of greatest concern? Why?

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Question 73

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Cabot Company collected the following data regarding production of one of its products. Compute the direct materials price variance.

Cabot Company collected the following data regarding production of one of its products. Compute the variable overhead efficiency variance.

The sum of the variable overhead spending variance, the variable overhead efficiency variance, and the fixed overhead spending variance is the:

Within the same budget performance report, it is impossible to have both favorable and unfavorable variances.

Flexible budgets may be prepared before or after an actual period of activity. Why would management prepare such budgets at differing time frames?

The difference between the actual cost incurred and the standard cost is called the:

Gates Company reports the following information regarding the production on one of its products for the month. Compute the direct labor cost variance, the direct labor rate variance, the direct labor efficiency variance and identify each as either favorable or unfavorable.

Brewer Company specializes in selling used cars. During the month, the dealership sold 22 cars at an average price of $15,000 each. The budget for the month was to sell 20 cars at an average price of $16,000. Compute the dealership's sales price variance for the month.

An internal report that helps management analyze the difference between actual performance and budgeted performance based on the actual sales volume (or other level of activity) , and which presents the differences between actual and budgeted amounts as variances, is called a(n) :

Stanton Co. produces and sells two lines of t-shirts, Deluxe and Mega. Stanton provides the following data. Compute the sales price and the sales volume variances for each product.

Should both favorable and unfavorable variances be investigated, or only the unfavorable ones? Explain.

Although a fixed budget is only useful over the relevant range of operations, a flexible budget is useful over all possible production levels.

Cabot Company collected the following data regarding production of one of its products. Compute the direct materials quantity variance.

Bok Company's output for the current period was assigned a $200,000 standard direct materials cost. The direct materials variances included a $5,000 favorable price variance and a $3,000 unfavorable quantity variance. What is the actual total direct materials cost for the current period?

When standard costs are used, factory overhead is assigned to products with a predetermined standard overhead rate.

Thomas Co. provides the following fixed budget data for the year: Required: Prepare a flexible budget performance report for the year using the contribution margin format.

Job #305 was budgeted to require 3.5 hours of labor at $11.00 per hour. However, it was completed in 3 hours by a person who worked for $14.00 per hour. What is the total labor cost variance for Job #305?

Bartels Corp. produces woodcarvings. It takes 2 hours of direct labor to produce a carving. Bartels' standard labor cost is $12 per hour. During August, Bartels produced 10,000 carvings and used 21,040 hours of direct labor at a total cost of $250,376. What is Bartels' labor rate variance for August?