Standard Costs and Variance Analysis Paper 4

1

A plan that is created using budgeted revenue and costs but is based on the actual units of output is known as a






2

A method of budgeting in which the cost of each program must be justified, starting with the one most vital to the company, is






3

Comparing actual results with a budget based on achieved volume is possible with the use of a






4

The use of standard costs in the budgeting process signifies that an organization has most likely implemented a






5

A manufacturing firm has certain peak seasons; namely the Christmas season, the summer season, and the last 2 weeks of February. During these periods of increased output, the firm leases additional production equipment and hires additional temporary employees. Which of the following budget techniques would best fit this firm’s needs?






6

Country Ovens is a family restaurant chain. Due to an unexpected road construction project, traffic passing by the Country Ovens restaurant in New town has significantly increased. As a result, restaurant volume has similarly increased well beyond the level expected. Which type of budget would be most appropriate in helping the restaurant manager plan for restaurant labor costs?






7

An organization’s revenues and variable costs vary significantly with seasonal weather conditions. This variability has frustrated management’s attempts to evaluate the organization’s actual results against budgeted performance because there are often large variances in revenues. Which one of the following budgeting methods is most likely to assist management in planning and assessment of results?






8

Gooding bicycles has begun using budgeting to evaluate performance. Budgets were prepared for the current year based on anticipated sales of 40,000 units. Actual sales totaled 45,000. What type of budgeting methodology should Gooding use to evaluate performance this year?






9

Under a standard cost system, the materials efficiency variances are the responsibility of






10

Blaster, Inc., a manufacturer of portable radios, purchases the components from subcontractors to use to assemble into a complete radio. Each radio requires three units each of Part XBEZ52, which has a standard cost of $1.45 per unit. During May, Blaster experienced the following with respect to Part XBEZ52:
Purchases ($18,000) ...12,000 Units
Consumed in manufacturing ...10,000 Units
Radios manufactured... 3,000 Units
During May, Blaster incurred a purchase price variance of






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