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Exam 13: Budgeting and Standard Cost Systems

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Question 61

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A formal written statement of management's plans for the future,expressed in financial terms,is called a budget.

A) True
B) False

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Question 62

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If the standard to produce a given amount of product is 600 direct labor hours at $17 and the actual was 500 hours at $15,the time variance was $1,700 favorable.

A) True
B) False

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Question 63

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Budgetary slack can be avoided if lower and mid-level managers are requested to support all of their spending requirements with specific operational plans.

Since the controllable variance measures the efficiency of using variable overhead resources,if budgeted variable overhead exceeds actual results,the variance is favorable.

Below is budgeted production and sales information for Cooper Cans,Inc.for the month of March: The unit selling price for aluminum cans is $0.10 and for tin cans is $0.15. -Budgeted production for aluminum cans during the month is

The budget that summarizes future plans for the acquisition of fixed assets is the

As of January 1 of the current year,the Butner Company had accounts receivables of $50,000.Sales for January,February,and March were as follows: $120,000,$140,000,and $150,000.20% of each month's sales are for cash.Of the remaining 80% (the credit sales) ,60% are collected in the month of sale,with the remaining 40% collected in the following month.What is the total cash collected (both from accounts receivable and for cash sales) in the month of February?

The master budget of a small manufacturer would normally include all component budgets that impact the financial statements.

The standard costs and actual costs for direct materials,direct labor,and factory overhead for the manufacture of 2,500 units of product are as follows: The amount of the direct labor time variance is

Frogue Corporation uses a standard cost system.The following information was provided for the period that just ended: The direct labor cost variance is

The fact that workers are unable to meet a properly determined direct labor standard is sufficient cause to change the standard.

The following data relate to direct materials costs for November: -What is the direct materials price variance?

When budget goals are set too tight,the budget becomes less effective as a tool for planning and controlling operations.

Supervisor salaries,maintenance,and indirect factory wages would normally appear in the selling and administrative expenses budget.

The formula to compute direct materials price variance is to calculate the difference between

A negative fixed overhead volume variance can be caused due to the following EXCEPT

Prepare a monthly flexible selling expense budget for Long Company for sales volumes of $300,000,$400,000,and $500,000,based on the following data:

Favorable volume variances are never harmful since achieving them encourages managers to run the factory above normal capacity.

The formula to compute direct labor rate variance is to calculate the difference between

Browning Inc.production budget for Product X for the year ended December 31 is as follows: In Brown's production operations,Materials A,B,and C are required to make Product X.The quantities of direct materials expected to be used for each unit of product are as follows: Product X Material A .50 pound per unit Material B 1.00 pound per unit Material C 1.20 pound per unit The prices of direct materials are as follows: Material A $0.60 per pound Material B $1.70 per pound Material C $1.50 per pound Prepare a direct materials purchases budget for Product X.