Question :
81. The difference between actual materials cost per unit and the : 1208272
81. The difference between actual materials cost per unit and the standard materials cost per unit is known as a:
A. Materials price variance.
B. Materials usage variance.
C. Materials cost variance.
D. Materials volume variance.
82. What is the result when the quantity of materials used is less than the standard quantity?
A. An unfavorable materials usage variance
B. A favorable materials usage variance
C. An unfavorable materials price variance
D. A favorable materials price variance
83. What is the result when the actual rate paid for labor is less than the standard rate?
A. An unfavorable labor usage variance
B. A favorable labor usage variance
C. A favorable labor price variance
D. An unfavorable labor price variance
84. Which of the following statements is incorrect regarding variable overhead variances?
A. Variable overhead variances are not based on the same general formulas used to compute the materials and labor price variances.
B. Variable overhead costs represent many inputs such as supplies, utilities and indirect labor.
C. Many companies do not calculate price and usage variances for variable overhead costs.
D. None of the other answers are correct.
85. Starlight prepared a static budget that for a production and sales volume of 20,000 units.
What is net income if 18,000 units are sold?
A. $304,200
B. $342,800
C. $274,600
D. $304,400
86. What was the sales volume variance?
Refer To: 08-87
A. $65,000 unfavorable
B. $65,000 favorable
C. $29,800 favorable
D. $29,800 unfavorable
87. What was the total variable cost volume variance?
Refer To: 08-87
A. $35,200 unfavorable
B. $35,200 favorable
C. $24,200 favorable
D. $24,200 unfavorable
88. Which of the following statements is correct?
A. A favorable variance may indicate the existence of unfavorable conditions.
B. Managers should be praised or punished based on variances.
C. Budget slack exists when performance standards are set at an ideal, unachievable level.
D. Establishing standards is the least difficult aspect of using a standard cost system.
89. Which of the following statements is incorrect?
A. In deciding whether to investigate a variance, managers should consider the materiality of the variance.
B. A material variance is one that will influence stockholders’ investment decisions.
C. The primary advantage of a standard cost system is controlling costs efficiently.
D. None of the other answers are correct.
90. Spreadsheet software can aid in the preparation and analysis of budgets because of which relationship between static and flexible budgets?
A. Static budget provides responses to the question “What if” the planned budget had included a certain volume.
B. Flexible budget provides responses to the question “What if” the planned budget had included a certain volume.
C. Static budget can be used as the basis of the master budget.
D. Flexible budgets can be used to derive budgeted financial statements.
91. Ben expects to charge $75 per hour for his industrial maintenance business during the following year. He expects to reach 50,000 hours at that price. Ben’s partner disagrees with the estimate and expects closer to 60,000 hours.
What should Ben do when preparing the budget for the year?
A. Create two budgets, one at 50,000 hours and one at 60,000 hours.
B. Create several budgets showing a range of outcomes.
C. Create several budgets, and then follow the one that he feels like following.
D. Create a volume budget based on actual performance.
