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Multiple Choice Quiz
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1
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.
2
Which of the following is not true?
A)Actual sales greater than expected sales are an unfavorable variance.
B)Actual sales less than expected sales are an unfavorable variance.
C)Actual costs less than expected costs are a favorable variance
D)Actual costs greater than expected costs are an unfavorable variance.
3
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What is the sales price variance?
A)$120,000 F
B)$120,000 U
C)$240,000 F
D)$240,000 U
4
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What is the sales volume variance?
A)$120,000 F
B)$120,000 U
C)$240,000 F
D)$240,000 U
5
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What is the amount of the Total Sales Variance?
A)$120,000 F
B)$120,000 U
C)$240,000 F
D)$240,000 U
6
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What is the amount of the Flexible Budget Variance for Variable Manufacturing costs?
A)0
B)$6,000 U
C)$24,000 F
D)$46,000 U
7
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What is the amount of the Flexible Budget Variance for Variable Selling and Administrative Costs?
A)0
B)$6,000 U
C)24,000 F
D)$46,000 U
8
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What is the flexible Budget Variance for fixed Manufacturing Costs?
A)$50,000 F
B)$50,000 U
C)$13,636 F
D)0
9
The ability to attain the sales volume indicated in the Master Budget is usually referred to as:
A)Creating the numbers
B)Making the numbers
C)Budgetary slack
D)Achieving the numbers
10
Standards that are easily attainable with or accomplished with a minimal effort are referred to as:
A)Ideal Standards
B)Lax Standards
C)Practical Standards
D)Employee Standards
11
Standards, which are difficult to achieve due to reasons beyond the individual performing the task, are the result of firm using which of the following methods to establish standards?
A)Ideal Standards
B)Lax Standards
C)Practical Standards
D)Employee Standards
12
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What is the Materials Usage Variance?
A)$600,000 U
B)$600,000 F
C)$264,000 U
D)$264,000 F
13
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What is the Materials Price Variance?
A)$600,000 U
B)$600,000 F
C)$264,000 U
D)$264,000 F
14
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Which of the following would be held accountable for the materials Price Variance?
A)Production Foreman
B)Assembly Manager
C)Assembly Workers
D)Purchasing Manager
15
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What is the Labor Price Variance?
A)$24,500 U
B)$24,500 F
C)$ 5,000 U
D)$ 5,000 F
16
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What is the Labor Usage Variance?
A)$24,500 U
B)$24,500 F
C)$ 5,000 U
D)$ 5,000 F
17
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What is the financial statement impact of the labor rate variance?
A)Decrease cost of goods sold
B)Increase cost of goods sold
C)Decrease Inventory
D)Increase Inventory
18
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What is the financial statement impact of the Variable Overhead Variance?
A)Decrease cost of goods sold
B)Increase cost of goods sold
C)Decrease Inventory
D)Increase Inventory
19
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What is the Fixed Overhead Spending Variance?
A)$63,500 F
B)$63,500 U
C)$51,500 F
D)$51,500 U
20
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What is the Fixed Overhead Volume Variance?
A)$63,500 F
B)$63,500 U
C)$51,500 F
D)$51,500 U
21
The practice of understating expected sales volume is referred to as:
A)Lowballing
B)Highballing
C)Budgetary slack
D)Budgetary overstatement
22
A budgeting process in which information flows top down and bottom up is referred to as:
A)Continuous budgeting
B)Participative budgeting
C)Perpetual budgeting
D)Joint budgeting
23
When evaluating operations management sometimes uses the difference between expected and actual performance. This is referred to as:
A)Management by Differences.
B)Management by Expectation.
C)Management by Objective
D)Management by Exception.
24
A primary advantage of a standard cost system is the efficient use for management to control costs. Secondary advantages include all of the following except:
A)Alerting Management to trouble spots.
B)Boosting morale and motivating employees.
C)Allowing employees to optimize resources thereby minimizing waste and reducing costs.
D)Encourage good planning.





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