Question 1

The sales price variance is the difference between the actual sales revenues and the

Accepted Answer

A)  budgeted selling price multiplied by the budgeted number of units sold.
B)  budgeted selling price multiplied by the actual number of units sold.
C)  actual selling price multiplied by the budgeted number of units sold.
D)  actual selling price multiplied by the actual number of units sold.

Question 2

Is the production volume variance favorable or unfavorable?

Accepted Answer

A)  favorable
B)  unfavorable

Question 3

Which of the following is the most probable reason a company would experience an unfavorable labor rate variance and a favorable labor efficiency variance?

Accepted Answer

A)  The mix of workers assigned to the particular job was heavily weighted towards the use of higher paid experienced individuals.
B)  The mix of workers assigned to the particular job was heavily weighted towards the use of new relatively low paid unskilled workers.
C)  Because of the production schedule,workers from other production areas were assigned to assist this particular process.
D)  Defective materials caused more labor to be used in order to produce a standard unit.

Question 4

A favorable variance is not necessarily good,and an unfavorable variance is not necessarily bad.

Accepted Answer

A) True 
 B)False

Question 5

In general,the direct labor efficiency variance is the responsibility of the

Accepted Answer

A)  purchasing agent.
B)  company president.
C)  production manager.
D)  industrial engineering.
E)  marketing department.

Question 6

What was Goodman's standard direct-labor rate?

Accepted Answer

A)  $3.54
B)  $3.80
C)  $4.00
D)  $5.80

Question 7

The following data pertains to the direct materials cost for the month of October: What is the direct materials efficiency (quantity) variance?

Accepted Answer

A)  $950 favorable
B)  $950 unfavorable
C)  $1,000 favorable
D)  $1,000 unfavorable
E)  $50 unfavorable

Question 8

What is the master budget sales revenue?

Accepted Answer

A)  $124,000.
B)  $148,000.
C)  $156,000.
D)  $180,000.

Question 9

Dickey Company had total underapplied overhead of $15,000.Additional information is as follows: What is the actual total overhead for the period?

Accepted Answer

A)  $50,000
B)  $45,000
C)  $80,000
D)  $87,000

Question 10

What were the actual direct labor hours worked during the month?

Accepted Answer

A)  5,000.
B)  4,800.
C)  4,200.
D)  4,000.
E)  3,400.

Question 11

Which of the following is not an alternative name for the production volume variance?

Accepted Answer

A)  capacity variance
B)  idle capacity variance
C)  denominator variance
D)  fixed overhead efficiency variance

Question 12

Which department is customarily held responsible for an unfavorable materials quantity variance?

Accepted Answer

A)  Quality control.
B)  Purchasing.
C)  Engineering.
D)  Production.

Question 13

A flexible budget adjusts the static budget to reflect the actual activity level achieved during the period.

Accepted Answer

A) True 
 B)False

Question 14

What is the master budget contribution margin?

Accepted Answer

A)  $52,000.
B)  $47,500.
C)  $45,000.
D)  $39,000.

Question 15

What is the direct labor efficiency variance for November?

Accepted Answer

A)  $1,800
B)  $1,900
C)  $2,000
D)  $2,090
E)  $2,200

Question 16

The slope of the flexible budget-line is the

Accepted Answer

A)  selling price per unit.
B)  variable cost per unit.
C)  fixed cost per unit.
D)  contribution margin per unit.
E)  operating profit per unit.

Question 17

Is the production volume variance favorable or unfavorable?

Accepted Answer

A)  favorable
B)  unfavorable

Question 18

Given the following information in standard costing: What is the total direct labor cost variance?

Accepted Answer

A)  $3,160,favorable
B)  $3,160,unfavorable
C)  $2,360,favorable
D)  $2,360,unfavorable

Question 19

What is the sales revenue in the flexible budget?

Accepted Answer

A)  $139,000.
B)  $156,000.
C)  $169,000.
D)  $180,000.

Question 20

The intercept of the flexible budget-line is total

Accepted Answer

A)  sales.
B)  variable costs.
C)  fixed costs.
D)  contribution margin.
E)  assets.

Exam 16: Fundamentals of Variance Analysis

Is the production volume variance favorable or unfavorable?

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Which department is customarily held responsible for an unfavorable materials quantity variance?

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What is the master budget sales revenue?

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Dickey Company had total underapplied overhead of $15,000.Additional information is as follows: What is the actual total overhead for the period?

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Is the production volume variance favorable or unfavorable?

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Which of the following is not an alternative name for the production volume variance?

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The slope of the flexible budget-line is the

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What were the actual direct labor hours worked during the month?

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What is the sales revenue in the flexible budget?

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The following data pertains to the direct materials cost for the month of October: What is the direct materials efficiency (quantity) variance?

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Given the following information in standard costing: What is the total direct labor cost variance?

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What was Goodman's standard direct-labor rate?

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Which of the following is the most probable reason a company would experience an unfavorable labor rate variance and a favorable labor efficiency variance?

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What is the direct labor efficiency variance for November?

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What is the master budget contribution margin?

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In general,the direct labor efficiency variance is the responsibility of the

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The sales price variance is the difference between the actual sales revenues and the

Correct AnswerverifiedShow Answer

The intercept of the flexible budget-line is total

Correct AnswerverifiedShow Answer

A flexible budget adjusts the static budget to reflect the actual activity level achieved during the period.

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A favorable variance is not necessarily good,and an unfavorable variance is not necessarily bad.

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