Management Accounting 2023

A variance is:

• the difference between actual fixed cost per unit and standard variable cost per unit
• the standard units of inputs for one output
• the difference between an actual result and a budgeted performance
• the difference between actual variable cost per unit and standard fixed cost per unit

1) The flexible budget contains:

• A) budgeted amounts for actual output
• B) static budget amounts for planned output
• C) actual costs for actual output
• D) actual costs for planned output

An unfavorable sales-volume variance could result from:

• A) an inappropriate assignment of labor or machines to specific jobs
• B) competitors taking market share
• C) an inefficiency of a purchasing manager in bargaining with suppliers
• D) a decrease in actual selling price compared to anticipated selling price

The flexible-budget variance for direct cost inputs can be further subdivided into a:

• A) static-budget variance and a sales-volume variance
• B) sales-volume variance and an efficiency variance
• C) price variance and an efficiency variance
• D) static-budget variance and a price variance

Which of the following can be a reason for a favorable price variance for direct materials?

• A) a decrease in the price of materials due to an oversupply of materials
• B) an unexpected increase in the price of materials
• C) less amount of material used during production than planned for actual output
• D) workers taking less time to produce the products than was expected

Which of the following could be a reason for a favorable material price variance?

• A) the purchasing manager bargaining effectively with suppliers
• B) the purchasing manager giving orders for small quantity to reduce storage cost
• C) the purchasing manager accepting a bid from the highest-priced supplier to ensure the quality of material
• D) the personnel manager hiring under skilled workers

Benchmarking is a process:

• A) in which overhead costs are absorbed into units of output, or 'jobs'
• B) in which a firm's performance levels are compared against the best levels of performance in competing companies or in companies having similar processes
• C) which is based on calculating the breakeven point and analyzing the consequences of changes in various factors calculating the breakeven point
• D) in which the underlying processes of an organization is optimized using a systematic approach to achieve more efficient goals

Fixed overhead costs include:

• A) the cost of sales commissions
• B) leasing of machinery used in a factory
• C) energy costs
• D) indirect materials

Which of the following mathematical expression is used to calculate budgeted variable overhead cost rate per output unit?

• A) Budgeted output allowed per input unit × Budgeted variable overhead cost rate per input unit
• B) Budgeted input allowed per output unit ÷ Budgeted variable overhead cost rate per input unit
• C) Budgeted output allowed per input unit ÷ Budgeted variable overhead cost rate per input unit
• D) Budgeted input allowed per output unit × Budgeted variable overhead cost rate per input unit

When machine-hours are used as an overhead cost-allocation base and annual leasing costs for equipment unexpectedly increase, the most likely result would be to report a(n):

• A) unfavorable variable overhead spending variance
• B) favorable variable overhead efficiency variance
• C) unfavorable fixed overhead flexible-budget variance
• D) favorable production-volume variance