Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
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Textbook Question
Chapter 11, Problem 8QC
(Learning Objective 6) Which of the following is not true about the fixed
- a. It is the difference between actual fixed overhead and budgeted fixed overhead.
- b. It is the difference between the budgeted fixed overhead and the standard fixed overhead allocated to production.
- c. It can be either favorable or unfavorable.
- d. It is sometimes referred to as the fixed overhead spending variance.
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Which of the following statements is false? (You may select more than one answer.)a. A flexible budget is used for control purposes and a static budget is used for planning purposes.b. A flexible budget is prepared at the end of the period and a static budget is prepared at the beginning of the period.c. A flexible budget is not useful for controlling variable costs.d. A static budget provides budgeted estimates for one level of activity.
Which of the following is true?
a.
The Flexible Budget Variance for operating income is calculated by taking the actual operating income minus the static budget operating income.
b.
The Flexible Budget Variance for operating income is calculated by taking the actual operating income minus the flexible budget operating income.
c.
The Flexible Budget Variance for operating income is calculated by taking the flexible budget operating income minus the actual operating income.
Which of the following elements are used in calculating Costs in a Flexible Budget?
a.
Budgeted unit costs times actual quantities of output
b.
Actual unit costs times budgeted quantities of output
c.
Budgeted unit costs times budgeted quantities of output
d.
Actual unit costs times actual quantities of output
A Favorable Variance results when (check all that apply)
a.
Actual costs exceed Budgeted costs
b.
Budgeted costs exceed…
Which one of the following statements regarding the difference between a flexible budget and a static budget is true?
A flexible budget primarily is prepared for planning purposes, but a static budget is prepared for performance evaluation
A flexible budget provides cost allowances for different levels of activity, but a static budget provides costs for one level of activity
A flexible budget includes only variable costs whereas a static budget includes only fixed cost
Variances will always be larger with a flexible budget than with a static budget
Chapter 11 Solutions
Managerial Accounting (5th Edition)
Ch. 11 - (Learning Objective 1) Which of the following is...Ch. 11 - (Learning Objective 2) The direct material price...Ch. 11 - Prob. 3QCCh. 11 - Prob. 4QCCh. 11 - Prob. 5QCCh. 11 - (Learning Objective 4) Which of the following is...Ch. 11 - Prob. 7QCCh. 11 - (Learning Objective 6) Which of the following is...Ch. 11 - Prob. 9QCCh. 11 - (Learning Objective 7Appendix) Which of the...
Ch. 11 - Compute the standard cost of direct materials...Ch. 11 - Compute the standard cost of direct labor...Ch. 11 - Explain a direct material variance (Learning...Ch. 11 - Prob. 11.4SECh. 11 - Calculate direct material variances when the...Ch. 11 - Calculate direct labor variances (Learning...Ch. 11 - Prob. 11.7SECh. 11 - Prob. 11.8SECh. 11 - Calculate fixed overhead variances (Learning...Ch. 11 - Calculate and interpret fixed overhead variances...Ch. 11 - Prob. 11.11SECh. 11 - Calculate and interpret overhead variances...Ch. 11 - Record costing transactions (Learning Objective 7)...Ch. 11 - Record standard costing transactions (Learning...Ch. 11 - Identify ethical standards violated (Learning...Ch. 11 - Vocabulary (Learning Objectives 1, 2, 3, 4, 5, 6)...Ch. 11 - Calculate standard cost and gross profit per unit...Ch. 11 - Calculate standard cost per unit (Learning...Ch. 11 - Calculate and explain direct material variances...Ch. 11 - Calculate missing direct material variables...Ch. 11 - Calculate and explain direct labor variances...Ch. 11 - Calculate and interpret direct material and direct...Ch. 11 - Calculate the material and labor variances...Ch. 11 - Record materials and labor transactions (Learning...Ch. 11 - Calculate the standard cost of a product before...Ch. 11 - Recognize advantages and disadvantages of standard...Ch. 11 - Compute and interpret overhead variances (Learning...Ch. 11 - Data Set for E11-28A through E11-32A Country...Ch. 11 - Data Set for E11-28A through E11-32A Country...Ch. 11 - Data Set for E11-28A through E11-32A Country...Ch. 11 - Make journal entries in a standard costing system...Ch. 11 - Prepare a standard cost income statement (Learning...Ch. 11 - Calculate standard cost and gross profit per unit...Ch. 11 - Calculate the standard cost per unit (Learning...Ch. 11 - Calculate and explain direct material variances...Ch. 11 - Calculate missing direct material variables...Ch. 11 - Calculate and explain direct labor variances...Ch. 11 - Prob. 11.38BECh. 11 - Prob. 11.39BECh. 11 - Prob. 11.40BECh. 11 - Prob. 11.41BECh. 11 - Recognize advantages and disadvantages of standard...Ch. 11 - Calculate and interpret overhead variances...Ch. 11 - Prob. 11.44BECh. 11 - Prob. 11.45BECh. 11 - Prob. 11.46BECh. 11 - Prob. 11.47BECh. 11 - Prob. 11.48BECh. 11 - Prob. 11.49APCh. 11 - Comprehensive standards and variances problem...Ch. 11 - Comprehensive standards and variances problem...Ch. 11 - Prob. 11.52APCh. 11 - Prob. 11.53APCh. 11 - Prob. 11.54BPCh. 11 - Comprehensive standards and variances problem...Ch. 11 - Comprehensive standards and variances problem...Ch. 11 - Work backward through labor variances (Learning...Ch. 11 - Determine all variances and make journal entries...Ch. 11 - Calculate labor variances in a hotel (Learning...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Which of the following is true? a. The Static Budget Variance for operating income is calculated by taking the actual operating income minus the static budget operating income. b. The Static Budget Variance for operating income is calculated by taking the actual operating income minus the flexible budget operating income. c. The Static Budget Variance for operating income is calculated by taking the flexible budget operating income minus the actual operating incomearrow_forwardDistinguish among a budget, a performance report, and a variance. Question content area bottom Part 1 A. A budget measures the differences between a performance report and a variance; a performance report compares actual results with the budget; and a variance is a quantitative expression of a plan of action. B. A budget compares the performance report with variances; a performance report measures the differences between budget and actual; and a variance is a quantitative expression of a plan of action. C. A budget compares actual results with the performance report; a performance report is a quantitative expression of a plan of action; and a variance measures the differences between budget and actual. D. A budget is a quantitative expression of a plan of action; a performance report compares actual results with the budget; and a variance measures the differences between budget and actual.arrow_forwardInformation technology has made it easier for managers to perform all of the following tasks except a. preparing performance reports that identify variances between actual and budgeted revenues and costs. b. combining individual units’ budgets into the companywide budget. c. sensitivity analyses. d. removing budgetary slack from the budget.arrow_forward
- What is the primary difference between a static budget and a flexible budget? a. The static budget contains only fixed costs, while the flexible budget contains only variable costs. b. The static budget is prepared for a single level of activity, while a flexible budget is adjusted for different activity levels. c. The static budget is constructed using input from only upper level management, while a flexible budget obtains input from all levels of management. d. The static budget is prepared only for units produced, while a flexible budget reflects the number of units sold.arrow_forwardThe flexible budget variance for fixed overhead is known as the A.) Static budget variance. B.) Fixed overhead efficiency variance. C.) The fixed overhead volume variance. D.) The fixed overhead spending variance.arrow_forwardIf so, what do you suggest be done to improve the system? Prepare a flexible budget and recompute the budget variances.arrow_forward
- Which of the following statements is false? Standard costs (e.g., how much should be paid for each unit of input) are benchmarks for measuring performance. Managers should investigate only unfavorable variances. Variance analysis enhances responsibility accounting. A variance is the difference between the budgeted amount and actual amount.arrow_forwardIn comparison to static budgets, flexible budgets: Offer managers a more realistic comparison of budget and actual fixed cost items under their control Encourage managers to use fewer fixed cost items and more variable cost items that are under their control. Provide a better understanding of the capacity variances during the period being evaluated. Offer managers a more realistic comparison of budget and actual revenue and cost items under their control.arrow_forwardTo reconcile budgeted profit to actual profit under marginal costing, which variances must be accounted for? A) All sales variances, variable cost variances and fixed overhead expenditure variance B) All sales variances C) All variable cost variances and fixed overhead expenditure variance D) All sales variances and variable cost variancesarrow_forward
- A Master budget is called a Static budget because a. It is developed around unchanging (static) Sales Volumes at unchanging (static) Unit Costs b. It is developed around unchanging (static) Sales Volumes with changing Unit Costs c. It is developed around changing Sales Volumes with unchanging (static) Unit Costs A Flexible Budget will show a. Budgeted Sales Volumes at the original Budgeted Unit Costs b. Actual Sales Volumes at the original Budgeted Unit Costs c. Actual Sales Volumes at the Actual Unit Costs Which of the following is true? a. The Static Budget Variance for operating income is calculated by taking the actual operating income minus the static budget operating income. b. The Static Budget Variance for operating income is calculated by taking the actual operating income minus the flexible budget operating income. c. The Static Budget Variance for operating income is calculated by taking…arrow_forwardThe Zero Base Budget (ZBB) is the budget system that most influences resource allocation management by involving the devolution of decision making power to the lower levels. Identify whether this statement is true or false. Select one:TrueFalsearrow_forwardThe first step of the budget process is: plan direct control feedback Static budget are often used by: production department. administrative departments. responsible centers. capital projects. A budget serves as a benchmark against which Actual results can be compared. Allocated results can be compared. Actual results become inconsequential. Allocated results become inconsequential. The following are characteristics of an effective budget, EXCEPT: Goals should be attainable. Evaluations should be made carefully with opportunities to explain any failures. They should be properly applied to avoid negative effects. Customers affected by a budget should be consulted when it is prepared. Which of the following is NOT a benefit of budgeting? It forces managers to look to the future. It plays an important role in communication within the organization. It serves an important role in motivating and rewarding employees. It encourages executives to build up organizational slack.…arrow_forward
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