Question 1

The Ferguson Company estimated that October sales would be 100,000 units with an average selling price of $6.00.Actual sales for October were 105,000 units and average selling price was $5.95. The sales volume variance was:

Accepted Answer

A)   $30,000 favorable.
B)   $30,000 unfavorable.
C)   $29,750 favorable.
D)   $29,750 unfavorable.E) B) and C)
F) None of the above

Question 2

A static budget is one that shows estimated revenues and costs at multiple activity levels.

Accepted Answer

A) True 
 B)False

Question 3

In most cases,the production manager should be held accountable for fixed cost volume variances.

Accepted Answer

A) True 
 B)False

Question 4

In general,budget variances should not be used to single out managers for praise or punishment.

Accepted Answer

A) True 
 B)False

Question 5

Abbot Company spent less than expected for materials and more than expected for labor.Select the incorrect statement from the following.

Accepted Answer

A)   You can always expect unfavorable labor variances if you have favorable material variances.
B)   In order to facilitate cost control,it will be necessary to analyze the price and quantity of each resource used in production.
C)   It cannot be determined from the information provided whether employees were paid higher wages or if they worked more hours.
D)   It cannot be determined from the information provided whether the company paid a lower purchase price for materials or if workers used less materials.E) All of the above
F) None of the above

Question 6

Under all circumstances,unfavorable variances are bad;favorable variances are good.

Accepted Answer

A) True 
 B)False

Question 7

When would a cost variance be listed as unfavorable?

Accepted Answer

A)   When actual costs are less than budgeted costs
B)   When actual costs exceed budgeted costs
C)   When actual costs are equal to budgeted costs
D)   When actual sales are less than budgeted salesE) B) and D)
F) None of the above

Question 8

The resources used in the manufacturing process are frequently called:

Accepted Answer

A)   Variances.
B)   Standards.
C)   Inputs.
D)   Outputs.E) C) and D)
F) B) and C)

Question 9

The best standards to include in a standard cost system are ideal standards.

Accepted Answer

A) True 
 B)False

Question 10

What is the result when the actual rate paid for labor is less than the standard rate?

Accepted Answer

A)   A favorable labor price variance
B)   An unfavorable labor price variance
C)   A favorable labor usage variance
D)   An unfavorable labor usage varianceE) B) and C)
F) A) and D)

Exam 8: Performance Evaluation

The Ferguson Company estimated that October sales would be 100,000 units with an average selling price of $6.00.Actual sales for October were 105,000 units and average selling price was $5.95. The sales volume variance was:

Correct Answer
verified

The resources used in the manufacturing process are frequently called:

Correct Answer
verified

Abbot Company spent less than expected for materials and more than expected for labor.Select the incorrect statement from the following.

Correct Answer
verified

Under all circumstances,unfavorable variances are bad;favorable variances are good.

Correct Answer
verified

A static budget is one that shows estimated revenues and costs at multiple activity levels.

Correct Answer
verified

When would a cost variance be listed as unfavorable?

Correct Answer
verified

In general,budget variances should not be used to single out managers for praise or punishment.

Correct Answer
verified

What is the result when the actual rate paid for labor is less than the standard rate?

Correct Answer
verified

In most cases,the production manager should be held accountable for fixed cost volume variances.

Correct Answer
verified

The best standards to include in a standard cost system are ideal standards.

Correct Answer
verified

Exam 8: Performance Evaluation

The Ferguson Company estimated that October sales would be 100,000 units with an average selling price of $6.00.Actual sales for October were 105,000 units and average selling price was $5.95. The sales volume variance was:

Correct AnswerverifiedShow Answer

The resources used in the manufacturing process are frequently called:

Correct AnswerverifiedShow Answer

Abbot Company spent less than expected for materials and more than expected for labor.Select the incorrect statement from the following.

Correct AnswerverifiedShow Answer

Under all circumstances,unfavorable variances are bad;favorable variances are good.

Correct AnswerverifiedShow Answer

A static budget is one that shows estimated revenues and costs at multiple activity levels.

Correct AnswerverifiedShow Answer

When would a cost variance be listed as unfavorable?

Correct AnswerverifiedShow Answer

In general,budget variances should not be used to single out managers for praise or punishment.

Correct AnswerverifiedShow Answer

What is the result when the actual rate paid for labor is less than the standard rate?

Correct AnswerverifiedShow Answer

In most cases,the production manager should be held accountable for fixed cost volume variances.

Correct AnswerverifiedShow Answer

The best standards to include in a standard cost system are ideal standards.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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