Question : 11.Assuming actual volume 10,000 units and planned volume 12,000 units, : 1257192

 

 

11.Assuming actual volume is 10,000 units and planned volume is 12,000 units, the sales volume variance in units:   

A. Equals 2,000 units unfavorable.

 

B. Equals 2,000 units favorable.

 

C. Cannot be determined without additional information.

 

D. None of these answers is correct.

 

 

12.Volume variances are computed for which of the following costs?   

A. Fixed manufacturing costs only

 

B. Variable selling and administrative costs only

 

C. Variable manufacturing and selling and administrative costs

 

D. Variable manufacturing costs only

 

 

13.A difference between the static budget based on planned volume and a flexible budget prepared at actual volume is called a:   

A. Flexible budget variance.

 

B. Static budget variance.

 

C. Production activity variance.

 

D. Volume variance.

 

 

14.The following static budget is provided:  What will be the overall volume variance if 12,000 units are produced and sold?   

A. $80,000 F

 

B. $80,000 U

 

C. $60,000 U

 

D. $160,000 U

 

 

15.The following static budget is provided:  What will budgeted net income equal if 21,000 units are produced and sold? (Do not round intermediate calculations.)   

A. $53,550

 

B. $55,500

 

C. $94,500

 

D. $210,000

 

 

16.Select the incorrect statement.   

A. If both the flexible budget and actual results are based on the actual volume of activity, the flexible budget sales variance will be attributable to sales price, not sales volume.

 

B. Budget slack is the difference between deflated and realistic standards.

 

C. Gamesmanship is decreased if superiors and subordinates participate sincerely in setting mutually agreeable, attainable standards.

 

D. For performance evaluation, management should compare actual results to a flexible budget based on the actual volume of activity.

 

 

17.Select the incorrect statement concerning the human factor of performance evaluation.   

A. Variances should not be used to single out managers for punishment.

 

B. Variances must be analyzed carefully to ensure that they are fully understood.

 

C. Just because a cost variance is labeled as favorable doesn’t necessarily mean that the manager should be commended for a job well done.

 

D. Managers should always be punished for unfavorable variances.

 

 

18.Sometimes employees will deliberately overstate the amount of materials and/or labor that should be required to complete a job. The difference between inflated and realistic standards is known as:   

A. Budget slack.

 

B. Making the numbers.

 

C. Lowballing.

 

D. Cooking the books.

 

 

19.Sometimes the sales staff will deliberately underestimate the amount of expected sales. This practice is known as:   

A. making the numbers.

 

B. cooking the books.

 

C. lowballing.

 

D. budget slack.

 

 

20.Which of the following can reduce the amount of employees’ budget gamesmanship?   

A. Have superiors and subordinates participate in the standard-setting process.

 

B. Incorporate standards into the firm’s evaluation system.

 

C. Avoid using standards for punitive purposes.

 

D. All of these answers are correct.

 

 

 

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