39) What is the cost function?

A) Costs = $ 75,000 + $0.098(Lines)

B) Costs = $ 75,000 + $0.068(Lines)

C) Costs = $245,000 + $0.068(Lines)

D) Cannot be determined

40) What would be the total flexible budget if the number of lines increased to 2,600,000?

A) $176,800

B) $245,000

C) $251,800

D) Cannot be determined

41) Identify which of the statements below is NOT a reason why actual results would differ from those projected in the master budget.

A) Current period projected sales volume differed from the prior period projection.

B) Actual sales volume differed from projected sales volume.

C) Variable costs per unit differed from expected amounts.

D) Actual fixed costs were different than expected.

42) Which statement would NOT be a possible reason for a variance between a flexible budget and actual results?

A) Material prices were different than expected.

B) Labour prices were different than expected.

C) The actual volume of activity was different than expected.

D) The amount of labour used per unit of output was different than expected.

43) If the total sales activity variance was $15,000 favourable, and the total master-budget variance was $17,500 favourable, then the total flexible-budget variance must have been

A) $32,500 favourable.

B) $ 2,500 favourable.

C) $ 2,500 unfavourable.

D) undeterminable.

44) Which of the following is NOT an example of “efficient” performance?

A) More goods were produced and sold than anticipated.

B) Direct labour hours per unit were less than expected.

C) Direct material used per unit was less than expected.

D) More outputs were achieved with less inputs than predicted.

45) With regard to flexible-budget variances, Caulkins Corporation showed a $2,000 unfavourable variable cost variance and a $450 favourable fixed cost variance. The variance for operating income was

A) $1,550 unfavourable.

B) $2,450 favourable.

C) $2,450 unfavourable.

D) undeterminable.

46) Flexible-budget variances are designed to measure

A) effectiveness of operations at projected level of activity.

B) effectiveness of operations at actual level of activity.

C) efficiency of operations at projected level of activity.

D) efficiency of operations at actual level of activity.

47) Flexible budgets help to measure

A) differences between projected and actual activity levels.

B) the efficiency of operations at the actual activity level.

C) the amount by which standard and expected prices differ.

D) the reasons why projected activity levels were not attained.

48) Who is best able to explain the reasons for flexible-budget variances?

A) The company president

B) A salesperson

C) A manufacturing department foreperson


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