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Exam 13: Budgeting and Standard Cost Systems

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Question 51

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McCabe Manufacturing Co.'s static budget at 8,000 units of production includes $40,000 for direct labor and $4,000 for electric power.Total fixed costs are $23,000.At 9,000 units of production,a flexible budget would show:

A) variable costs of $49,500 and $25,875 of fixed costs.
B) variable costs of $44,000 and $23,000 of fixed costs.
C) variable costs of $49,500 and $23,000 of fixed costs.
D) variable costs of $44,000 and $25,875 of fixed costs.

E) A) and B)
F) None of the above

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Question 52

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

A) direct materials purchases budget.
B) production budget.
C) sales budget.
D) capital expenditures budget.

E) All of the above
F) A) and C)

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Question 53

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Prepare a monthly flexible selling expense budget for Podism Company for sales volumes of $270,000,$350,000,and $480,000,based on the following data:

The standard fixed factory overhead rate is based on 100% capacity of 50,000 direct labor hours.The standard costs and the actual costs for factory overhead for the production of 8,000 units during the current month were as follows:

Production estimates for August are as follows:

Ideal standards are developed under conditions that assume no idle time,no machine breakdowns,and no materials spoilage.

Refer to the information provided for Executive Inc.What is the direct labor rate variance?

The first budget customarily prepared as part of an entity's master budget is the:

Refer to the information provided for MetalHead Inc.What is the direct materials price variance?

The process of developing budget estimates by requiring all levels of management to estimate sales,production,and other operating data as though operations were being initiated for the first time is referred to as:

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12,the direct materials quantity variance was $2,200 favorable.

If the actual quantity of direct materials used in producing a commodity differs from the standard quantity,the variance is termed:

Refer to the information provided for Efficient Corporation.The direct materials cost variance is:

Standard and actual costs for direct labor for the manufacture of 1,500 units of product were as follows:

Which of the following formula is used to calculate direct labor rate variance?

For February,sales revenue is $300,000; sales commissions are 5% of sales; the sales manager's salary is $40,000; advertising expenses are $13,000; shipping expenses total 1% of sales; and miscellaneous selling expenses are $1,100 plus 1/2 of 1% of sales.Total selling expenses for the month of February are:

Employees view budgeting more positively when goals are established for them by senior management.

If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12,the direct materials price variance was $1,000 favorable.

The cash budget presents the expected inflow and outflow of cash for a specified period of time.

A favorable cost variance occurs when actual cost is less than budgeted cost at actual volumes.