1. If a business had sales of $4,000,000 and a margin of safety of 20%, the break-even point was: a). $5,000,000 b). $3,200,000 c). $12,000,000 d). $1,000,000 2. Consider the following budget information: materials to be used totals $64,750; direct labor totals $198,400; factory overhead totals $394,800; work in process inventory January 1, 2012, was expected to be $189,100; and work in progress inventory on December 31, 2012, is expected to be $197,600. What is the budgeted cost of goods manufactured? a). $649,450 b). $657,950 c). $197,600 d). $1,044,650 3. The budget that needs to be completeed first when preparing the master budget is the: a). Production Budget b). Sales Budget c). Cash Budget d). Capital Expenditures Budget 4. Incurring actual indirect factory wages in excess of budgeted amounts for actual production results in a: a). quantity variance b). controllable variance c). volume variance d). rate variance 5. Standard costs are divided into which of the following components? a). Variance Standard and Quantity Standard b). Materials Standard and Labor Standard c). Quality Standard and Quantity Standard d). PPrice Standard and Quantity Standard The controllable variance measures: a). operating results at less than normal capacity b). the effeciency of using variable overhead resources c). operating results at more than normal capacity d). control over fixed overhead costs 6. The use of standards for nonmanufacturing expenses is: a). not as common as it is for manufacturing costs b). as common as it is for manufacturing costs c). not useful d). impossible 7. A company must choose either a standard system or nonfinancial performance measures to evaluate the performance of a company. a). True or b). False 8. A favorable cost variance occurs when actual cost is less than budgeted cost at actual volumes. T or F 9. Because accounts have financial expertise, they are the only ones that are able to set standard costs for the production area. T or F 10. Cost systems using detailed estimates of each element of manufacturing cost entering into the finished product are called standard cost systems. T or F