nd which of the following statements about the business variance are correct?) - The budgeted selling price per unit does not change - Budgeted fixed costs do not change - Budgeted variable costs per unit do not change - The units coming in do not change
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5. How many of the following statements about the activity gap are correct? (and which of the following statements about the business variance are correct?)
- The budgeted selling price per unit does not change
- Budgeted fixed costs do not change
- Budgeted variable costs per unit do not change
- The units coming in do not change
a)4
b)2
c)1
d)3
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- A situation where a favourable variance may result is when actual operating income is less than the budgeted amount b. None of the answers. actual revenues exceed budgeted revenues d. budgeted contribution margin is more than the actual amount e. budgeted or standard costs are less than actual costs 16 10 906041) Why do companies develop flexible budgets for variance analysis? Because actual activity level may not be the same as the budgeted activity level. Because flexible budgets reflect the normal production capacity. Because flexible budgets are more accurate than static budgets. Because static budgets become obsolete in the end of year when variance analysis are performed. 2) If excessive direct hours are used in the current operations, what variance would be resulted under the standard cost accounting? Unfavorable labor efficiency variance Favorable labor quality variance Favorable labor efficiency variance Unfavorable labor rate variance 3) The following actual and standard cost data for direct material and direct labor relate to the production of 4,000 units of product: Actual Costs Standard Costs Direct Material 4,900 lb. $5.85 per pound 5,000 lb. $5.90 per pound Direct Labor 1,900 hrs. $20.50 per hour 2,000 hrs. $20.00 per hour What is the materials price…Total operating income variance means the difference between the actul operating inccome and the operating income of the master budget. Operating profit variance only determines the results of operation and excludes financing and other profits and losses. The total operating income variance is also known as sales volume variance which results in difference in the gross profit and difference in booking of other overheads costs due to difference arising in sales and closing inventory values. Questions1. What would be a first-level breakdown of the total operating income variance? 2. How can the total flexible-budget variance be broken down (i.e., what are the constituent parts of this total variance)?
- 8. The Purchasing Agent in a firm would be most likely to be held responsible for which of the following variances? none of the above labor rate variance selling price variance variable overhead efficiency materials price variance1. What is the budgeted sales price per unit? 2. What is the budgeted variable expense per unit? 3. What is the budgeted fixed cost for the period? 4. Compute the master budget variances. Be sure to indicate each variance as favorable (F) or unfavorable (U.) 5. Management would like to determine the portion of the master budget variance that is (a) due to volume being different than originally anticipated and (b) due to some other unexpected cause. Prepare a flexible budget performance report to address these questions, using the actual sales volume of 52,500units and the budgeted sales volume of 50,000units. Use the original budget assumptions for sales price, variable cost per unit, and fixed costs, assuming the relevant range stretches from 45,000 to 57,500 units. 6. Using the flexible budget performance report you prepared for Requirement 5, answer the following questions: a. How much of the master budget variance (calculated in…Which of the following statements about margin of safety is false? a. Margin of safety measures the difference between budgeted revenues and breakeven revenues. b. If the variable cost per unit decreases but the number of units sold, unit selling price and total fixed cost are all constant, the margin of safety decreases. c. If only the fixed costs decrease but the number of units sold and unit selling price and unit variable cost are all constant, the margin of safety increases. d. If only the fixed costs increase but the number of units sold and unit selling price and unit variable cost are all constant, the margin of safety decreases. e. none of the given answers is false.
- verify whether variances favorable of unfavorable: budgeted cost at actual volue would be 25344 (21.12*1200) and total variance to be explained is 2536 (unfavorable 27880-25344). what is the amount of variance that is attributed to the diffence between the budgeted and actual wage rate per hour. what is the amount of variance that is attributed to the change in labor productivity? what is the amount of variance that can be attributed tothe diffence between budgeted and actual volume budget actual wage rate per hour 16 17 fixed hours 320 320 variable hours per relative value unit (RVU) 1 1.1 Relative Value unite (RVUs) 1000 1200 total labor hours 1320 1640 labor cost 21120 27880 cost per RVU 21.12 23.231. A planning budget is prepared before the period begins and is valid for only the planned level of activity. TRUE OR FALSE 2. An unfavorable activity variance for a cost indicates that spending was higher than it should have been for the actual level of activity for the period. TRUE OR FALSE 3. The activity variance for revenue is unfavorable if the actual revenue for the period is less than the revenue in the static planning budget. TRUE OR FALSE 4. If the actual level of activity is 4% more than planned, then the fixed costs in the static budget should be increased by 4% before comparing them to actual costs. TRUE OR FALSE1. If demand is insufficient to keep everyone busy and workers are not laid off, which of the following labor efficiency variance often will be a result: A) favorable. B) unfavorable. C) zero. D) either favorable or unfavorable 2. A/an ______________ materials quantity variance occurs when the actual quantity used in production is less than the standard quantity allowed for the actual output of the period. A) favorable. B) unfavorable. C) zero. D) either favorable or unfavorable 3. When the materials price variance is recorded at the time of purchase, raw materials are recorded as inventory at: A) replacement cost B) standard cost C) absorption cost D) actual cost 4.When more hours of labor time are necessary to complete a job than the standard allows, the labor efficiency variance is A) favorable. B) unfavorable. C) zero D) either favorable or unfavorable.
- 9. A company using direct costing in its performance evaluation would normally include the following variance in its report, except a)Budget variance b)Price variance c)Efficiency variance d)Volume varianceWhich of the following is true? Multiple Choice If a company has an unfavorable spending variance, it must have an unfavorable price variance. If a company has a favorable spending variance, it may have a favorable or unfavorable rate variance. If a company has a favorable quantity variance, it will have a favorable price variance. If a company has an unfavorable efficiency variance, it spent more per labor hour than budgeted.hich of the following statements is true? A budget reconciliation report shows the difference between actual profit and budgeted profit and does not show the other variances. Comparing the flexible budget to the as-if budget isolates a change in input price (e.g. budgeted input price vs. actual input price). Sales quantity (budgeted sales volume vs. actual sales volume) is the only item which differs between the master budget and the flexible budget. Activity-based costing is not used to evaluate customer profitability.
