Question :
91. Prestige Furnishings uses flexible budgeting. The company’s budget for variable : 1295669
91. Prestige Furnishings uses flexible budgeting. The company’s budget for variable and fixed overhead is $20,000 and $10,000, respectively. The company uses activity-based costing (ABC) and has traced the budgeted overhead of $30,000 to three activities: material handling, assembly, and inspections. The costs associated with each activity and their respective cost drivers are as follows:
Activity
Flexible Budget
Cost Driver
Budgeted Volume
Material handling
$8,000
Number of moves
100
Assembly
16,000
Number of labor hours
4,000
Inspections
6,000
Number of inspections
1,000
The actual cost and total volume for each activity during the current year are as follows:
Activity
Cost
Volume
Material handling
$8,190
105 moves
Assembly
15,000
4,200 labor hours
Inspections
6,100
1,100 inspections
Refer to the Prestige Furnishings information above. What is the spending variance for the materials handling activity? A. $210 FB. $210 UC. $190 FD. $190 U
92. Prestige Furnishings uses flexible budgeting. The company’s budget for variable and fixed overhead is $20,000 and $10,000, respectively. The company uses activity-based costing (ABC) and has traced the budgeted overhead of $30,000 to three activities: material handling, assembly, and inspections. The costs associated with each activity and their respective cost drivers are as follows:
Activity
Flexible Budget
Cost Driver
Budgeted Volume
Material handling
$8,000
Number of moves
100
Assembly
16,000
Number of labor hours
4,000
Inspections
6,000
Number of inspections
1,000
The actual cost and total volume for each activity during the current year are as follows:
Activity
Cost
Volume
Material handling
$8,190
105 moves
Assembly
15,000
4,200 labor hours
Inspections
6,100
1,100 inspections
Refer to the Prestige Furnishings information above. What is the efficiency variance for the materials handling activity? A. $190 UB. $190 FC. $400 UD. $400 F
93. Prestige Furnishings uses flexible budgeting. The company’s budget for variable and fixed overhead is $20,000 and $10,000, respectively. The company uses activity-based costing (ABC) and has traced the budgeted overhead of $30,000 to three activities: material handling, assembly, and inspections. The costs associated with each activity and their respective cost drivers are as follows:
Activity
Flexible Budget
Cost Driver
Budgeted Volume
Material handling
$8,000
Number of moves
100
Assembly
16,000
Number of labor hours
4,000
Inspections
6,000
Number of inspections
1,000
The actual cost and total volume for each activity during the current year are as follows:
Activity
Cost
Volume
Material handling
$8,190
105 moves
Assembly
15,000
4,200 labor hours
Inspections
6,100
1,100 inspections
Refer to the Prestige Furnishings information above. What is the efficiency variance for the assembly activity? A. $ 800 FB. $ 800 UC. $2,900 FD. $2,900 U
94. Prestige Furnishings uses flexible budgeting. The company’s budget for variable and fixed overhead is $20,000 and $10,000, respectively. The company uses activity-based costing (ABC) and has traced the budgeted overhead of $30,000 to three activities: material handling, assembly, and inspections. The costs associated with each activity and their respective cost drivers are as follows:
Activity
Flexible Budget
Cost Driver
Budgeted Volume
Material handling
$8,000
Number of moves
100
Assembly
16,000
Number of labor hours
4,000
Inspections
6,000
Number of inspections
1,000
The actual cost and total volume for each activity during the current year are as follows:
Activity
Cost
Volume
Material handling
$8,190
105 moves
Assembly
15,000
4,200 labor hours
Inspections
6,100
1,100 inspections
Refer to the Prestige Furnishings information above. What is the overall efficiency variance with respect to all of the activities? A. $3,190 FB. $3,190 UC. $1,800 FD. $1,800 U
95. Which of the following statements is false regarding variance analysis in the modern manufacturing environment? A. It is often not timely enough to be useful to managers.B. It is often too detailed to be of much use to managers.C. Not all variances are required to be investigated.D. It can influence employee behavior.
96. Which of the following statements is true regarding variance analysis in the modern manufacturing environment? A. It requires all variances, regardless of size, to be investigated by managers.B. The use of ideal standards over practical standards will always be the best motivator to employees.C. An “unfavorable” variance should always be interpreted as “bad”.D. It is often not performed in a timely enough manner to be useful to employees.
97. Which of the following statements is true regarding “management by exception”? A. It is rarely used in variance analysis.B. It forces managers to investigate all variances, regardless of size.C. It requires the use of flexible budgets.D. It requires managers to calculate standard costs but not actual costs.
98. When managers use the process called “management by exception”: A. they take action when there is a significant variance between planned and actual results.B. they take action when there is a variance of any size or amount between planned and actual results.C. they are allowed to use standard costs rather than actual costs on financial statements issued to decision makers.D. they are not required to compute the standard cost of making a product.
99. Managers who properly apply the concept called “management by exception” will: A. investigate only unfavorable variances.B. investigate only favorable variances.C. always investigate unfavorable and favorable variances regardless of size.D. investigate only variances of a certain size or scope.
