ACCT 212 Read & Interact Wild & Shaw Chapter 8 Flexible Budgets solutions complete answers

ACCT 212 Read & Interact Wild & Shaw Chapter 8 Flexible Budgets solutions complete answers 

 

When recording journal entries for production costs using a standard cost accounting system, the credit to Raw Materials Inventory for the materials used in production is for the ______ amount.

 

A   variance is the difference between the actual quantity of input used and the standard quantity of input that should have been used. 

 

At the end of the accounting period, if the net amount of the variances is immaterial, the variance accounts are closed to:

 

The difference between the actual amount paid and the standard price paid to purchase an overhead item is called a

 

When recording journal entries for production costs using a standard cost accounting system, the debit to Work in Process Inventory is for the ______ amount.

 

A(n)   variance occurs when management pays an amount different from the standard price to acquire an overhead item.

 

True or false: Volume variances are due to the difference between expected production and actual production and, therefore, never need to be investigated.

 

Which of the following are examples of an overhead allocation base:

 

ABC Company has set the following standards for one unit of product: Direct materials: 0.5 pounds @ $1.00 per pound; Direct labor: 1 hour @ $10.00 per hour. The company produced 35,000 units and had the following actual costs: Direct materials: 18,000 pounds at a total cost of $17,280; Direct labor: 36,000 hours at a total cost of $374,400. Compute the direct labor variance.

 

XYZ Company makes one product and has calculated the following amounts for direct materials: AQ x AP = $150,000; AQ x SP = $145,000; SQ x SP = $152,000. Compute the direct materials price variance.

 

A manufacturing company has an unfavorable volume variance. Which statement is true?

 

The overhead variance is the difference between:

 

Step 1 of computing a standard overhead rate is to:

 

XYZ Company makes one product and has calculated the following amounts for direct labor: AH x AR = $84,000; AH x SR = $83,000; SH x SR = $85,000. Compute the direct labor cost variance.

 

ABC Company has set the following standards for one unit of product: Direct materials: 0.5 pounds @ $1.00 per pound; Direct labor: 1 hour @ $10.00 per hour. The company produced 35,000 units and had the following actual costs: Direct materials: 18,000 pounds at a total cost of $17,280; Direct labor: 36,000 hours at a total cost of $374,400. Compute the direct materials price variance.

 

Which of the following is the correct formula?

 

All of the following individuals work to help set standard costs:

 

A flexible budget prepared (before/after)   the period begins allows management to make adjustments to increase profits or decrease losses.

 

Match the cost variance component to its definition.

 

Budget reports are commonly prepared for: (Check all that apply).

 

Costs developed which identify what products should cost are called

 

A flexible budget has which of the following characteristics?

 

Budget   compare actual results to budgeted results.

 

The main factors that can cause a variance include the following. Select all that apply.

 

When recording journal entries for production costs using a standard cost accounting system, the debit to Work in Process Inventory account is for the ______ amount.

 

Actual sales volume for a period is 5,000 units. Budgeted sales volume is 4,500. Actual selling price per unit is $15 and budgeted price per unit is $15.75. The sales price variance is $      .

 

The difference between the actual amount paid and the standard price paid to purchase an item is called a

 

A company had a standard sales price of $1.79 per unit and expected to sell 10,000 units. Due to a downturn in the economy, the product was marked down to $1.59 per unit and the company only sold 9,500 units. Calculate the sales price variance.

 

The overhead cost variance is the difference between:

 

To determine a standard overhead cost rate, the overhead costs must be classified as:

 

A        variance is the difference between the actual price per unit and the standard price per unit.

 

Fixed costs equal $25,000; variable cost per unit is $2.50 and units produced are 10,000. The total budgeted costs is $      .

 

XYZ Company makes one product and has calculated the following amounts for direct materials: AQ x AP = $150,000; AQ x SP = $145,000; SQ x SP = $152,000. Compute the total direct materials variance.

 

Budget reports are commonly prepared for:

 

The formula to calculate total budgeted costs is:

 

The fixed budget indicates direct labor costs of $27,500. Actual direct labor costs were $27,000. The variance is:

 

Budget        contain relevant information that compares actual results to planned activities.

 

When compared to the budgeted amount, if the actual cost or revenue contributes to a lower income, then the variance is considered       . 

 

A manufacturing company has variable overhead costs of $2.50 per unit and fixed costs of $5,000 per month. Each unit requires 4 hours of direct labor and the company expects to produce 2,000 units each month. The standard overhead rate will be $       per direct labor hour.

 

Standard costs have which of the following characteristics? (Check all that apply.) 

 

ABC Company has set the following standards for one unit of product: Direct materials: 0.5 pounds @ $1.00 per pound; Direct labor: 1 hour @ $10.00 per hour. The company produced 35,000 units and had the following actual costs: Direct materials: 18,000 pounds at a total cost of $17,280; Direct labor: 36,000 hours at a total cost of $374,400. Compute the total direct materials variance.

 

When compared to the budgeted amount, if the actual cost or revenue contributes to a higher income, then the variance is considered       . 

 

Management uses a(n) ______ budget to establish the standard overhead rate.

 

Preset costs for delivering a product or service under normal conditions are called        costs.

 

The standard overhead applied is based on the ______ level of activity multiplied by the predetermined overhead rate.

 

A(n)        variance occurs when management pays an amount different from the standard price to acquire the item.

 

The fixed budget indicates sales of $50,000. Actual sales were $55,000. The variance is:

 

When recording journal entries for production costs using a standard cost accounting system, the favorable variances are recorded as ______ and the unfavorable variances are recorded as ______.

 

A manufacturing company has the following budgeted overhead costs: Indirect materials: $0.50 per unit; Utilities: $0.25 per unit; Supervisory salaries: $60,000; Building rent: $80,000. If the company expects to produce 200,000 units using 100,000 hours of direct labor, the standard overhead rate will be $       per direct labor hour.

 

A        variance is the difference between the actual quantity per unit and the standard quantity per unit.