23. Budgets can be used to plan in advance and also as a yardstick or benchmark against which to compare actual performance.

True False

24. The following item is part of a multipart cash receipts budget problem that uses the same data Clump Corporation projects sales for each quarter of the upcoming year as $10,000 for first quarter, $30,000 for second quarter, $25,000 for third quarter, and $40,000 for fourth quarter. Seventy percent of sales are credit sales and will be collected entirely in the quarter following the quarter in which the sales are made. If the actual accounts receivable balance at the beginning of the upcoming year is $8,000, the total expected cash receipts for the first quarter should be

Group of answer choices

$3,000

$7,000

$10,000

$8,000

$11,000

25. The following item is part of a multipart cash receipts budget problem that uses the same data Clump Corporation projects sales for each quarter of the upcoming year as $10,000 for first quarter, $30,000 for second quarter, $25,000 for third quarter, and $40,000 for fourth quarter. Seventy percent of sales are credit sales and will be collected entirely in the quarter following the quarter in which the sales are made. If the actual accounts receivable balance at the beginning of the upcoming year is $8,000, the total expected cash receipts for the third quarter should be

Group of answer choices

$12,000

$28,500

$29,500

$17,500

$25,000

26. The following item is part of a multipart cash receipts budget problem that uses the same data Clump Corporation projects sales for each quarter of the upcoming year as $10,000 for first quarter, $30,000 for second quarter, $25,000 for third quarter, and $40,000 for fourth quarter. Seventy percent of sales are credit sales and will be collected entirely in the quarter following the quarter in which the sales are made. If the actual accounts receivable balance at the beginning of the upcoming year is $8,000, the total expected cash receipts for the fourth quarter should be

Group of answer choices

none of the above

$28,500

$17,500

$12,000

$29,500

32. The following is one of several variable cost variance items on the exam that use the same data. Deflecta Corporation uses a standard cost system. The standard cost for direct materials is $7 per pound and 2 pounds per finished unit. The standard cost for direct labor is $16 per hour and 1.5 direct labor hours per finished unit. The standard cost for variable overhead is $8 per direct labor hour and 1.5 direct labor hours (DLH) per finished unit. Last month, the firm produced 2000 good units using 3900 pounds of materials purchased and used at a price of $7.10 per pound. In the same time period, the firm used 3100 direct labor hours at $15 per hour. The firm also experienced actual variable factory overhead during that period of $25,000. The materials price variance for the firm during that period was:

Group of answer choices

$210.00 favorable

$700.00 favorable

$310.00 favorable

$210.00 unfavorable

$390.00 unfavorable

33. The following is one of several variable cost variance items on the exam that use the same data. Deflecta Corporation uses a standard cost system. The standard cost for direct materials is $7 per pound and 2 pounds per finished unit. The standard cost for direct labor is $16 per hour and 1.5 direct labor hours per finished unit. The standard cost for variable overhead is $8 per direct labor hour and 1.5 direct labor hours (DLH) per finished unit. Last month, the firm produced 2000 good units using 3900 pounds of materials purchased and used at a price of $7.10 per pound. In the same time period, the firm used 3100 direct labor hours at $15 per hour. The firm also experienced actual variable factory overhead during that period of $25,000. The materials quantity (usage) variance for the firm during that period was:

Group of answer choices

$390.00 unfavorable

$1090.00 favorable

$700.00 favorable

$210.00 unfavorable

$310.00 favorable

34. Only top management at the Vice Presidential level and above should be involved in the budgeting decisions as they are the only people who have the authority to make those decisions.

True False

35. The following is one of several variable cost variance items on the exam that use the same data. Deflecta Corporation uses a standard cost system. The standard cost for direct materials is $7 per pound and 2 pounds per finished unit. The standard cost for direct labor is $16 per hour and 1.5 direct labor hours per finished unit. The standard cost for variable overhead is $8 per direct labor hour and 1.5 direct labor hours (DLH) per finished unit. Last month, the firm produced 2000 good units using 3900 pounds of materials purchased and used at a price of $7.10 per pound. In the same time period, the firm used 3100 direct labor hours at $15 per hour. The firm also experienced actual variable factory overhead during that period of $25,000. The direct labor rate variance for the firm during that period was:

Group of answer choices

$1600.00 unfavorable

$1600.00 favorable

$1500.00 favorable

$0.00 neutral

$3100.00 favorable

36. The following is one of several variable cost variance items on the exam that use the same data. Deflecta Corporation uses a standard cost system. The standard cost for direct materials is $7 per pound and 2 pounds per finished unit. The standard cost for direct labor is $16 per hour and 1.5 direct labor hours per finished unit. The standard cost for variable overhead is $8 per direct labor hour and 1.5 direct labor hours (DLH) per finished unit. Last month, the firm produced 2000 good units using 3900 pounds of materials purchased and used at a price of $7.10 per pound. In the same time period, the firm used 3100 direct labor hours at $15 per hour. The firm also experienced actual variable factory overhead during that period of $25,000. The direct labor efficiency variance for the firm during that period was:

Group of answer choices

$3100.00 unfavorable

$1500.00 favorable

$3100.00 favorable

$1600.00 unfavorable

$1600.00 favorable

37. The following is one of several variable cost variance items on the exam that use the same data. Deflecta Corporation uses a standard cost system. The standard cost for direct materials is $7 per pound and 2 pounds per finished unit. The standard cost for direct labor is $16 per hour and 1.5 direct labor hours per finished unit. The standard cost for variable overhead is $8 per direct labor hour and 1.5 direct labor hours (DLH) per finished unit. Last month, the firm produced 2000 good units using 3900 pounds of materials purchased and used at a price of $7.10 per pound. In the same time period, the firm used 3100 direct labor hours at $15 per hour. The firm also experienced actual variable factory overhead during that period of $25,000. The variable overhead spending variance for the firm during that period was:

Group of answer choices

$1000.00 favorable

$800.00 favorable

$800.00 unfavorable

none of the above

$1000.00 unfavorable

38. The following is one of several variable cost variance items on the exam that use the same data. Deflecta Corporation uses a standard cost system. The standard cost for direct materials is $7 per pound and 2 pounds per finished unit. The standard cost for direct labor is $16 per hour and 1.5 direct labor hours per finished unit. The standard cost for variable overhead is $8 per direct labor hour and 1.5 direct labor hours (DLH) per finished unit. Last month, the firm produced 2000 good units using 3900 pounds of materials purchased and used at a price of $7.10 per pound. In the same time period, the firm used 3100 direct labor hours at $15 per hour. The firm also experienced actual variable factory overhead during that period of $25,000. The variable overhead efficiency variance for the firm during that period was:

Group of answer choices

$200.00 unfavorable

none of the above

$800.00 favorable

$1000.00 favorable

$800.00 unfavorable

39. Budgeting is only found in for-profit enterprises.

True False

40. Depreciation expense is usually added to other expenses to arrive at total operating expenses, but it is deducted from that total in the process of arriving at total cash operating expenses.

True False

41. All current period budgets must be based on the budgets of prior periods.

True False

42. The deviation of actual performance, in the sense of the amount of a budget line item's actual expenditure, from its corresponding budget amount is called a deviance.

True False

43. The Selling Price Variance is favorable when the actual average sales price is less than the budgeted sales price.

True False