cost-accounting-test-bank-chapter-7

1Copyright©2015PearsonEducation,Inc.CostAccounting,15e(Horngren/Datar/Rajan)Chapter7FlexibleBudgets,Direct-CostVariances,andManagementControlObjective7.11)Amasterbudgetis________.A)abudgetwhichstartsfromazerobaseB)developedforaperiodforaplannedoutputC)developedattheendofaperiodD)atypeofflexiblebudgetAnswer:BDiff:1Objective:1AACSB:Analyticalthinking2)Managementbyexceptionisapracticewherebymanagersfocusmorecloselyon________.A)astaticbudgetB)areasthatarenotoperatingasanticipatedC)activity-basedcostingD)exceptionaldecision-makingmodelsAnswer:BDiff:1Objective:1AACSB:Analyticalthinking3)Avarianceis________.A)thedifferencebetweenactualfixedcostperunitandstandardvariablecostperunitB)thestandardunitsofinputsforoneoutputC)thedifferencebetweenanactualresultandabudgetedperformanceD)thedifferencebetweenactualvariablecostperunitandstandardfixedcostperunitAnswer:CDiff:1Objective:1AACSB:Analyticalthinking4)Anunfavorablevarianceindicatesthat________.A)theactualcostsarelessthanthebudgetedcostsB)theactualrevenuesexceedthebudgetedrevenuesC)theactualunitssoldarelessthanthebudgetedunitsD)thebudgetedcontributionmarginismorethantheactualamountAnswer:CDiff:2Objective:1AACSB:Analyticalthinking2Copyright©2015PearsonEducation,Inc.5)Afavorablevarianceindicatesthat________.A)budgetedcostsarelessthanactualcostsB)actualrevenuesexceedbudgetedrevenuesC)actualoperatingincomeislessthanthebudgetedamountD)budgetedcontributionmarginismorethantheactualamountAnswer:BDiff:2Objective:1AACSB:AnalyticalthinkingAnswerthefollowingquestionsusingtheinformationbelow:LanderCorporationusedthefollowingdatatoevaluatetheircurrentoperatingsystem.Thecompanysellsitemsfor$18eachandusedabudgetedsellingpriceof$18perunit.ActualBudgetedUnitssold41,000units40,000unitsVariablecosts$164,000$156,000Fixedcosts$46,000$48,0006)Whatisthestatic-budgetvarianceofrevenues?A)$18,000favorableB)$18,000unfavorableC)$6,000favorableD)$4,000unfavorableAnswer:AExplanation:A)Static-budgetvarianceofrevenues=(41,000units×$18)-(40,000units×$18)=$18,000FDiff:2Objective:1AACSB:Applicationofknowledge7)Whatisthestatic-budgetvarianceofvariablecosts?A)$2,000favorableB)$8,000unfavorableC)$4,000favorableD)$6,000unfavorableAnswer:BExplanation:B)Static-budgetvarianceofvariablecosts=$164,000−$156,000=$8,000UDiff:2Objective:1AACSB:Applicationofknowledge3Copyright©2015PearsonEducation,Inc.8)Whatisthestatic-budgetvarianceofoperatingincome?A)$10,000favorableB)$10,000unfavorableC)$12,000favorableD)$12,000unfavorableAnswer:CExplanation:C)ActualStaticStatic-budgetResultsBudgetVarianceUnitssold41,00040,000Revenues$738,000$720,000$18,000FVariablecosts164,000156,0008,000UContributionmargin$574,000$564,00010,000FFixedcosts46,00048,0002,000FOperatingincome$528,000$516,000$12,000FDiff:3Objective:1AACSB:ApplicationofknowledgeAnswerthefollowingquestionsusingtheinformationbelow:ContraficCorporationusedthefollowingdatatoevaluateitscurrentoperatingsystem.Thecompanysellsitemsfor$21eachandusedabudgetedsellingpriceof$21perunit.ActualBudgetedUnitssold180,000units185,000unitsVariablecosts$1,080,000$1,295,000Fixedcosts$800,000$775,0009)Whatisthestatic-budgetvarianceofrevenues?A)$105,000favorableB)$105,000unfavorableC)$8,000favorableD)$8,000unfavorableAnswer:BExplanation:B)Static-budgetvarianceofrevenues=(180,000units×$21)−(185,000units×$21)=$105,000UDiff:2Objective:1AACSB:Applicationofknowledge4Copyright©2015PearsonEducation,Inc.10)Whatisthestatic-budgetvarianceofvariablecosts?A)$25,000favorableB)$25,000unfavorableC)$215,000favorableD)$215,000unfavorableAnswer:CExplanation:C)Static-budgetvarianceofvariablecosts=$1,080,000−$1,295,000=$215,000FDiff:2Objective:1AACSB:Applicationofknowledge11)Whatisthestatic-budgetvarianceofoperatingincome?A)$85,000favorableB)$90,000unfavorableC)$110,000favorableD)$105,000unfavorableAnswer:AExplanation:A)ActualStaticStatic-budgetResultsBudgetVarianceUnitssold180,000185,000Revenues$3,780,000$3,885,000$(105,000)UVariablecosts1,080,0001,295,000(215,000)FContributionmargin$2,700,000$2,590,000110,000FFixedcosts800,000775,00025,000UOperatingincome$1,900,000$1,815,000$85,000FDiff:3Objective:1AACSB:Applicationofknowledge5Copyright©2015PearsonEducation,Inc.Answerthefollowingquestionsusingtheinformationbelow:CoroidCorporationusedthefollowingdatatoevaluatetheircurrentoperatingsystem.Thecompanysellsitemsfor$11eachandhadusedabudgetedsellingpriceof$12perunit.ActualBudgetedUnitssold280,000units275,000unitsVariablecosts$900,000$885,000Fixedcosts$55,000$52,00012)Whatisthestatic-budgetvarianceofrevenues?A)$55,000favorableB)$220,000favorableC)$220,000unfavorableD)$55,000unfavorableAnswer:CExplanation:C)Static-budgetvarianceofrevenues=(280,000units×$11)−(275,000units×$12)=$220,000UDiff:2Objective:1AACSB:Applicationofknowledge13)Whatisthestatic-budgetvarianceofvariablecosts?A)$12,000favorableB)$12,000unfavorableC)$15,000favorableD)$15,000unfavorableAnswer:DExplanation:D)Static-budgetvarianceofvariablecosts=$900,000−$885,000=$15,000UDiff:2Objective:1AACSB:Applicationofknowledge6Copyright©2015PearsonEducation,Inc.14)Wha