1. The activity-level variance for fixed costs equals zero when ________. A) the actual level of output equals the static budget level of output B) the actual level of output is greater than the static budget level of output C) the actual level of output is less than the static budget level of output D) all of the above 2. The static budget variance is equal to the sum of ________ and ________. A) direct materials variance; direct labor variance B) fixed overhead variance; variable overhead variance C) flexible budget variance; activity-level variance D) direct materials price variance; direct materials quantity variance 3. One variance often influences another variance. If the direct materials price variance is favorable, then it is possible that this variance will cause ________. A) the direct materials quantity variance to be unfavorable B) the direct labor price variance to be unfavorable C) the direct labor price variance to be favorable D) the direct materials quantity variance to be favorable 4. Which of the following is NOT an example of efficient performance? A) Direct labor hours used per unit were less than expected. B) Direct material used per unit was less than expected. C) More outputs were achieved with less inputs than predicted. D) More outputs were produced than expected. 5) Yellow Cake Company planned to produce and sell 900 units at a total cost of $180,000. Actual production and sales were 900 units at a cost of $170,000. The company was ________. A) efficient and ineffective B) inefficient and ineffective C) inefficient and effective D) efficient and effective 6) ________ is the degree to which an organization minimizes the ________ used to achieve an objective. A) Efficiency; costs B) Efficiency; resources C) Effectiveness; resources D) Effectiveness; costs 7) Variable overhead efficiency variances are unfavorable when ________. A) the actual cost-driver activity exceeds the standard activity allowed for the actual output B) the actual cost-driver activity is less than the standard activity allowed for the actual output C) the actual cost-driver activity exceeds the standard activity allowed for the static budget output D) the actual cost-driver activity is less than the standard activity allowed for the static budget output 8. Variable overhead efficiency variances are unfavorable when actual cost driver activity exceeds the ________. A) standard cost-driver activity allowed for the actual output B) activity allowed for the expected output C) activity allowed for the planned output D) activity allowed for last period's output

9) The variable overhead spending variance is the difference between the actual variable overhead cost and the amount of variable overhead cost budgeted for the actual level of cost driver activity. A) TRUE B) FALSE 10) For fixed overhead costs, the spending variance is ________ equal to the flexible-budget variance. A) always B) sometimes C) never D) indeterminate 11) The flexible budget variance for fixed overhead costs equals the ________ variance. A) efficiency B) spending C) static budget D) operating budget