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Flexible Budgets and Standard Costs
Flexible Budgets and Standard Costs MCQs
?
The Sydney Manufacturing Company uses a fixed budget of 80,000 direct labour hours, with planned overhead cost of $400,000 for variable overhead and $...
$400,000 and $120,000
$500,000 and $120,000
$400,000 and $150,000
$500,000 and $150,000
?
Which of the following is true?
Flexible budget and fixed budget are synonymous terms
Quantity variance and price variance are synonymous terms
Flexible budget and variable budget are synonymous terms
Historical costs and standard costs are synonymous terms
?
The materials price variance may be computed by:
(Actual price - Standard price) X Actual quantity used
(Actual price - Standard price) X Standard quantity
(Actual quantity - Standard quantity) X Actual price
(Actual quantity - Standard quantity) X Standard price
?
The actual materials price (AP) was $3.50, the actual quantity (AQ) of material was 5,100 units, and the materials price variance (PV) was $1,275 unfa...
was $3.75
was $3.30
was $3.00
was $3.25
?
Leland Manufacturing produced 3,700 units of finished product, using 15,000 pounds of raw material. Sixteen thousand pounds were purchased for $158,40...
$1,500, favourable
$2,475, favourable
$ 150, favourable
$ 198, favourable
?
Which of the following is correct with regard to using the standard quantity to compute materials variances? Standard quantity used:
Materials Price Variance: Yes Materials Quantity Variance: No
Materials Price Variance: Yes Materials Quantity Variance: Yes
Materials Price Variance: No Materials Quantity Variance: No
Materials Price Variance: No Materials Quantity Variance: Yes
?
The standard units (SQ) were 5,200, the standard price (SP) was $3.25, and the materials quantity variance (QV) was $325 favourable. The actual units ...
were 5,300
were 5,000
were 5,100
were 5,200
?
Which of the following is correct with regard to using the standard unit price to compute materials variances? Standard unit price used:
Materials Price Variance: Yes Materials Quantity Variance: No
Materials Price Variance: Yes Materials Quantity Variance: Yes
Materials Price Variance: No Materials Quantity Variance: No
Materials Price Variance: No Materials Quantity Variance: Yes
?
An unfavourable materials quantity variance may be the result of:
a greater than anticipated waste in the manufacturing process
an increase in the cost per unit of raw materials
a decrease in the cost per unit of raw materials
a lower than anticipated waste in the manufacturing process
?
Which of the following is correct with regard to the standard labour hours being used to compute labour variances? Standard labour hours used:
Labour Rate Variance: Yes Labour Efficiency Variance: No
Labour Rate Variance: Yes Labour Efficiency Variance: Yes
Labour Rate Variance: No Labour Efficiency Variance: No
Labour Rate Variance: No Labour Efficiency Variance: Yes
?
The labour rate variance may be computed by:
(Actual rate - Standard hours) X Actual hours
(Actual hours - Standard hours) X Standard price
(Actual hours - Standard rate) X Actual hours
(Actual rate - Standard rate) X Standard hours
?
The standard cost of one unit of product includes 2 hours of direct labour at $7.50 per hour. The company’s labour rate variance was $80, unfav...
were 496 hours
were 500 hours
were 504 hours
were 514 hours
?
Which of the following is correct with regard to using the standard labour rate to compute labour variances? Standard labour rate used:
Labour Rate Variance: Yes Labour Efficiency Variance: No
Labour Rate Variance: Yes Labour Efficiency Variance: Yes
Labour Rate Variance: No Labour Efficiency Variance: No
Labour Rate Variance: No Labour Efficiency Variance: Yes
?
The standard hourly rate was $1.40. The actual rate was $1.30. The labour rate variance was $600, favourable. The actual labour hours:
were 6,000
were 6,400
were 1,000
were 1,500
?
The Big Company’s expected production volume was 36,000 units at 9,000 hours of labour. The fixed overhead rate is $3 per hour at 36,000 units....
Spending variance, $3,000 F; volume variance, $2,000 U.
Spending variance, $1,000 U; volume variance, $3,000 U.
Spending variance, $1,000 U; volume variance, $3,000 F.
Spending variance, $1,000 F; volume variance, $3,000 U.
?
The Big Company’s expected production volume was 36,000 units at 9,000 hours of labour. The variable overhead rate is $5 per hour. Actual varia...
Spending variance, $1,500 unfav.; efficiency variance, $2,000 unfav.
Spending variance, $1,500 fav.; efficiency variance, $2,500 unfav.
Spending variance, $1,500 unfav.; efficiency variance, $2,500 fav.
Spending variance, $2,000 fav.,; efficiency variance, $2,500 unfav.
?
The overhead variances for Big Company were: Variable overhead spending variance: $450 unfavourable. Variable overhead efficiency variance: $750 fav...
$950 unfavourable
$1,700 unfavourable
$3,000 unfavourable
$500 favourable
?
Under a standard costing system, the overhead variances are recorded when:
the factory overhead is applied to the Goods in Process account
the factory labour is recorded
the materials price variance is recorded
the cost of goods sold is recorded
?
Under a standard cost system, the materials quantity variance was recorded at $500 unfavourable, the materials price variance was recorded at $1,620 f...
$0.10 each
$0.01 each
$1.00 each
$0.0988 each
?
The term production control means:
assuring that output is produced at the least possible cost, consistent with quality standards.
assuring that production goals in terms of output are met.
assuring that production goals are met at the lowest possible cost, consistent with quality standards.
assuring that all products produced are free of defects.
?
A static budget is most effective in measuring:
cost control.
production control.
cost control and production control.
neither cost control nor production control
?
Which of the following is not an appropriate activity base for developing a flexible budget?
direct labour hours.
machine hours.
number of invoices processed.
direct labour cost.
?
The variable overhead spending variance is most effective in measuring:
price changes for overhead items during a period.
the efficiency with which the activity base was utilized in production.
excessive use of overhead materials.
the utilization of plant facilities.
?
The variable overhead efficiency variance is most effective in measuring:
the difference between actual variable overhead costs incurred during the period and the budget allowance based on actual input.
the difference between actual variable overhead costs incurred during the period and the budget amount based on the time that should have been expended in producing at a certain level of activity.
the difference between actual hours utilized in production and the standard hours allowed at a certain level of output.
excessive usage of overhead materials.
?
A company using an activity-based costing system should:
not use a flexible budget since the concept of flexible budgets is incongruent with the concept of activity-based costing.
prepare a flexible budget for each activity center identified.
prepare a flexible budget only for the entire company.
prepare a flexible budget only for manufacturing cost pools.
?
The denominator level of activity applies to:
fixed overhead costs only.
variable overhead costs only.
both fixed and variable overhead costs.
actual but not standard costing systems.
?
If the price a company paid for overhead items, such as utilities, decreased during the year, the company would probably report a(n):
favourable efficiency variance.
favourable spending variance.
unfavourable efficiency variance
unfavourable spending variance.
?
At Candy Company, maintenance is exclusively a variable cost that varies directly with machine hours. The performance report for June showed that actu...
$1.185
$1.1675
$1.2025
$1.15
?
When using a flexible budget, a decrease in production levels within a relevant range:
decreases variable cost per unit.
decreases total costs.
increases total fixed costs.
increases variable cost per unit.
