CostAcctingSolutionsCH7.doc

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Unformatted text preview: http://www.scribd.com/doc/54084129/Kotler-Chapter1 Cost Accounting, 13e (Horngren et al.) Chapter 7 Flexible Budgets, Direct-Cost Variances, and Management Control 49) The master budget is: A) a flexible budget B) a static budget C) developed at the end of the period D) based on the actual level of output Answer: B Diff: 1 Terms: static budget Objective: 1 AACSB: Reflective thinking 50) A flexible budget: A) is another name for management by exception B) is developed at the end of the period C) is based on the budgeted level of output D) provides favorable operating results Answer: B Diff: 1 Terms: flexible budget Objective: 1 AACSB: Reflective thinking 51) Management by exception is the practice of concentrating on: A) the master budget B) areas not operating as anticipated C) favorable variances D) unfavorable variances Answer: B Diff: 1 Terms: management by exception Objective: 1 AACSB: Reflective thinking 52) A variance is: A) the gap between an actual result and a benchmark amount B) the required number of inputs for one standard output C) the difference between an actual result and a budgeted amount D) the difference between a budgeted amount and a standard amount Answer: C Diff: 1 Terms: variance Objective: 1 AACSB: Reflective thinking 53) An unfavorable variance indicates that: A) actual costs are less than budgeted costs B) actual revenues exceed budgeted revenues C) the actual amount decreased operating income relative to the budgeted amount D) All of these answers are correct. Answer: C Diff: 2 Terms: unfavorable variance Objective: 1 AACSB: Reflective thinking 54) A favorable variance indicates that: A) budgeted costs are less than actual costs B) actual revenues exceed budgeted revenues C) the actual amount decreased operating income relative to the budgeted amount D) All of these answers are correct. Answer: B Diff: 2 Terms: favorable variance Objective: 1 AACSB: Reflective thinking Answer the following questions using the information below: Abernathy Corporation used the following data to evaluate their current operating system. The company sells items for $10 each and used a budgeted selling price of $10 per unit. Actual Budgeted Units sold 92,000 units 90,000 units Variable costs $450,800 $432,000 Fixed costs $ 95,000 $100,000 55) What is the static-budget variance of revenues? A) $20,000 favorable B) $20,000 unfavorable C) $2,000 favorable D) $2,000 unfavorable Answer: A Explanation: A) (92,000 units ? $10) - (90,000 units ? $10) = $20,000 F Diff: 2 Terms: static-budget variance Objective: 1 AACSB: Analytical skills 56) What is the static-budget variance of variable costs? A) $1,200 favorable B) $18,800 unfavorable C) $20,000 favorable D) $1,200 unfavorable Answer: B Explanation: B) $450,800 - $432,000 = $18,800 U Diff: 2 Terms: static-budget variance Objective: 1 AACSB: Analytical skills 57) What is the static-budget variance of operating income?...
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This note was uploaded on 10/25/2011 for the course ACG 3341 taught by Professor Jomosankara during the Spring '09 term at FAU.

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