Question :
MULTIPLE CHOICE. Choose the one alternative that best completes the : 1196266
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 26) A variance is considered to be 26) ______ A) the difference between an actual result and a budget amount. B) the gap between an actual result and a benchmark amount. C) the required number of inputs for one standard output. D) a standard. E) the difference between a budgeted amount and a standard amount. 27) The type of budget that is based on one level of output, without adjustment for any operational or financial changes is called 27) ______ A) a balanced budget. B) a static budget. C) a cost budget. D) a standard budget. E) a flexible budget. 28) ________ is a carefully predetermined amount usually expressed on a per-unit basis. 28) ______ A) A flexible budget B) Fixed factory overhead C) A standard D) Variable marketing overhead E) A static budget 29) A budget that is adjusted in accordance with changes in actual output is called 29) ______ A) a flexible budget. B) a cost budget. C) a trial balance budget. D) a balanced budget. E) a static budget 30) Some financial variances show increases in operating income relative to a budgeted or allocated amount, and others show decreases in operating income. Respectively, these variances are 30) ______ A) budgeted, standard. B) unfavourable, favourable. C) standard, budgeted. D) favourable, unfavourable. E) fixed, variable. 31) All of the following are TRUE concerning standards, EXCEPT, 31) ______ A) represent the best expected level of performance. B) some organizations develop standards based on past results C) they are usually expressed on a per unit basis. D) they should only be developed after a careful study of the desired data E) they require time-motion studies by engineering to be reliable 32) General Insurance Company had a static budgeted operating income of $4.6 million; however, actual income was $3.0 million. What is the static budget variance of operating income? 32) ______ A) $1,000,000 unfavourable B) $1,600,000 unfavourable C) $1,600,000 favourable D) $3,000,000 favourable E) $1,000,000 favourable Use the information below to answer the following question(s).
Ames Golf Company used the following data to evaluate their current operating system. The company sells 1 pack of golf balls for $10 per pack. The $10 selling price is also the budgeted selling price.
BudgetedActual
Units Sold 1,000,000990,000
Variable Costs$3,000,000 $2,500,000
Fixed Costs $1,800,000 $1,850,000
33) What is the actual operating income for Ames Golf Company using the actual results? 33) ______ A) <$3,360,000> B) $5,200,000 C) $4,750,000 D) $5,970,000 E) $5,550,000 34) What is the budgeted operating income for Ames Golf Company? 34) ______ A) $7,000,000 B) $5,550,000 C) $5,200,000 D) $5,970,000 E) $4,750,000 35) What is the total static budget variance for Ames Golf Company? 35) ______ A) $400,000 favourable B) $450,000 unfavourable C) $650,000 favourable D) $390,000 unfavourable E) $350,000 favourable 36) A company uses a static budget approach and the previous management accountant calculated the following information: Fixed costs variance $10,000 U; revenues variance $400,000 F; contribution margin variance $60,000 F
Required: What is the Total static-budget variance ? 36) ______ A) $50,000 U B) $390,000 F C) $230,000 F D) $50,000 F E) $230,000 U 37) All of the following are considered to be steps in the preparation of a flexible budget EXCEPT
