A static budget A is based totally on prior years costs B is based on one

# A static budget a is based totally on prior years

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9. A static budget: A. is based totally on prior year's costs.B. is based on one anticipated activity level.C. is based on a range of activity.D. is preferred over a flexible budget in the evaluation of performance. E. presents a clear measure of performance when planned activity differs from actual activity. 3
ACC 312 Midterm Exam # 2 Form A Spring 2008 10. Master Products has the following information for the year just ended: The company's sales-price variance is: Sales Price Var = (AQ x AP) – (AQ x SP) = \$147,000 – (14,000 x (\$150k / 15k units)) = \$7,000 F11. In the first draft of its annual budget, Webster has the following budgeted costs at its anticipated production level (expressed in hours): variable overhead, \$150,000; fixed overhead, \$240,000. If Webster revises its anticipated production hours slightly downward in the second budget draft, it would expect: 12. Vern's makes all sales on account, subject to the following collection pattern: 20% are collected in the month of sale; 70% are collected in the first month after sale; and 10% are collected in the second month after sale. If sales for October, November, and December were \$70,000, \$60,000, and \$50,000, respectively, what was the budgeted receivables balance on December 31? 4
ACC 312 Midterm Exam # 2 Form A Spring 2008 13. Richard Hamilton has a fast-food franchise and must pay a franchise fee of \$35,000 plus 3% of gross sales. In terms of cost behavior, the fee is a: A. variable cost. B. fixed cost. C. step-fixed cost. D. semi variable cost. E. curvilinear cost. 14. Benson Company, which uses a standard costing system that applies manufacturing overhead based on machine hours, budgeted \$600,000 of fixed overhead when 40,000 machine hours were anticipated. Other data for the period were: Actual units produced: 10,000 Standard production time per unit: 3.9 machine hours Fixed overhead incurred: \$620,000 Actual machine hours worked: 42,000 Benson's fixed-overhead volume variance is: Volume Variance = Budgeted – Applied = \$600,000 – (10,000 units x 3.9 MH/unit x (\$600k / 40,000 MH)) = \$15,000 U

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• Spring '08
• Welsh
• Managerial Accounting, purchasing manager, budgeting process, faculty member, Duncanville