1) A exible budget is a budget that is developed using budgeted revenue or cost amounts and is not adjusted at the end of the budgeted period. A) True B) False 2) A variance is the difference between the actual cost for the current and previous year. A) True B) False Use the information below to answer the following question(s). Bates 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. __ _Budg_eted . 95,000 units 500,000 unit $1,250,000 $1,500,00l $925,000 $900,00l 3) What is the static-budget variance of revenues? A) $50,000 favourable B) $50,000 unfavourable C) $5,000 favourable D) $5,000 unfavourable E) $25,000 unfavourable 4) When machine-hours are used as a cost allocation base, the item MOST likely to contribute to an unfavourable productionvolume variance is A) a new competitor gaining market share. B) a new manufacturing machine costing considerably more than expected. C) an increase in the cost of energy. D) strengthened demand for the product. E) an increase in the number of direct-labour hours. 5) Randy's Production Company uses a single cost pool for xed manufacturing overhead. The amount for May 2018 was budgeted at $250,000; however, the actual amount was $3 50,000. Actual production for May was 12,500 units, and actual machine hours were 10,000. Budgeted production included 17,750 units and 12,375 machine hours. What is the budgeted xed overhead rate per input unit? A) $25.00 per unit B) $35.00 per unit C) $20.00 per unit D) $14.09 per unit E) $14.08 per unit 6) From the perspective of long-run product costing it is best to use A) master-budget capacity utilization to highlight unused capacity. B) normal capacity utilization for benchmarking purposes. C) practical capacity for pricing decisions. D) theoretical capacity for performance evaluation. E) supply capacity to satisfy customer demand. C) practical capacity for pricing decisions. D) theoretical capacity for performance evaluation. E) supply capacity to satisfy customer demand 7) External reporting requires the use of capacity in the denominator, taking into account off-limits idle capacity. A) theoretical B) practical C) budget D) normal E) practical or normal 8) In designing strategy, a company must match the opportunities and threats in the marketplace with A) those of the CFO (Chief Financial Officer). B) its resources and capabilities. C) branding opportunities. D) capabilities of current suppliers. E) its competitors. 9) A mixed cost is A) a fixed cost. B) a cost with fixed and variable elements. C) a variable cost. D) always an indirect cost. E) a cost with direct and indirect elements. 10) Which of the following formulae is correct when using the contribution margin method to determine the break- even point? A) Revenues less operating income equal variable costs plus fixed costs. B) Unit contribution margin times unit variable cost equals the break-even number of units. C) Unit contribution margin times the break-even number of units equals total variable costs. D) Selling price less unit contribution margin equals unit fixed cost for all values below or at the break-even number of units. E) Unit contribution margin times the break-even number of units equals fixed costs. 1 1) The main advantage of using budgeted cost rates rather than actual cost rates is A) budgeted costs allow managers to have cost information on a timely basis. B) budgeted costs may be subject to short-run fluctuations. C) budgeted indirect-cost rates are known prior to the inception of a new job. D) actual indirect-cost rates are affected by work done on other jobs. E) budgeted rates are just as accurate and require less effort. 12) A machine shop has direct materials cost of $1,800,000 direct labour of $4,200,000 (direct labour rate is $50 per hour) and budgeted indirect manufacturing costs of $850,000. Management believes that indirect manufacturing costs increase with direct labour hours. What is the budgeted indirect manufacturing cost rate? A) $2.12 B) $2.33 C) $4.94 D) $10.12 E) $17.00 13) Which13) Which of the following statements is TRUE regarding activity-based costing systems? A) ABC systems accumulate overhead costs by departments. B) ABC costing systems are less complex and, therefore, less costly than traditional systems. C) ABC costing systems can be used in manufacturing firms only. D) ABC costing systems have multiple indirect cost allocation rates for each activity. E) ABC systems provide a greater level of detail to understand how an organization uses its common inputs differently for distinct products. 14) The financial budget is that part of the master budget that comprises A) the capital budget and the cash budget. B) the capital budget and the budgeted balance sheet. C) the cash budget, operating budget and budgeted balance sheet. D) the cash budget, the budgeted statement of cash flows, and the retained earnings budget. E) the capital budget, the cash budget, budgeted balance sheet, and the budgeted statement of cash flows. 15) Cost pools are often organized in conjunction with A) direct labour pools. B) the general ledger control accounts. C) variable and fixed costs. D) direct cost tracing techniques. E) cost-allocation bases