Flexible Budgets and Performance Analysis
Standard Costs and Operating Performance Measures
16 multiple choice questions and I can start anytime. I can send them to you in two sets. Anytime you are ready.
Here are the first 8 questions
1. The management of International Cookwares believes that delivery performance measures must be improved if the company is to maintain its competitive edge. The following data are considered to be typical of the time to complete orders.
Process time 4.0 days
Wait time before the start of production 15.0 days
Move time 3.0 days
Inspection time 2.0 days
Wait time during the production process 8.0 days
The manufacturing cycle efficiency is closest to: (Points : 5)
The Whitfield Co. uses a standard costing system and has established the following standards:
Direct materials: 4 pounds at $8.00 per pound
Direct labor: 1 hour at $16.00 per hour
During July, Whitfield produced 6,000 units of its product and incurred the following actual costs:
Direct materials: 25,200 pounds purchased and used at $8.20 per pound
Direct labor: 5,600 hours worked at $15.30 per hour
What was the labor efficiency variance for July? (Points : 5)
$ 6,120 favorable
$ 6,400 favorable
What was the labor rate variance for July? (Points : 5)
4. A direct labor efficiency variance is least likely to be caused by: (Points : 5)
an out-of-date labor time standard.
producing fewer finished units than originally planned.
using new, inexperienced employees.
using poorer quality raw materials than originally planned.
5. Indicate which of the following statements about flexible budgeting is true? (Points : 5)
When using a flexible budget, as production increases within the relevant range, fixed costs per unit will increase.
A company that compares actual results to a static budget will have fewer budget variances than if it compares actual results to a flexible budget.
When a flexible budget is used for manufacturing costs, an increase in the production level within the relevant range will not change variable costs per unit.
The main difference between a flexible budget and a static budget is that a flexible budget does not contain fixed costs.
The Koski Company has established standards as follows:
Direct material: 3 lbs. @ $4/lb. = $12 per unit
Direct labor: 2 hrs. @ $8/hr. = $16 per unit
Actual production figures for the past year were as follows:
Units produced: 500
Direct material used: 1,600 lbs.
Direct material purchased (3,000 lbs.): $12,300
Direct labor cost (950 hrs.): $7,790
The materials quantity variance is: (Points : 5)
The materials price variance is:
(Points : 5)
$ 150 unfavorable
$ 160 unfavorable
$ 300 unfavorable
8. Based on a flexible budget for 5,000 machine hours of activity a company budgeted $25,000 for variable manufacturing overhead and $10,000 for fixed manufacturing overhead. If the company prepared a budget for 10,000 machine hours, how much total overhead would be budgeted? (Points : 5)