23. Which of the following variances will always be favorable when actual sales exceeds budgeted sales? A. Fixed cost. B. Variable cost. C. Operating profit. D. Sales activity. 24. The purpose of the flexible budget is to: A. Allow management some latitude in meeting goals. B. Reduce the total time in preparing the annual budget. C. Eliminate cyclical fluctuations in production reports by ignoring variable costs. D. Compare actual and budgeted results at virtually and any level of production 25. It is possible to have a favorable direct material price variance and an unfavorable direct material efficiency variance. A. True. B. False. 26. Which of the following is the most probable reason a company would experience an unfavorable labor rate variance and a favorable labor efficiency variance? A. Defective materials caused more labor to be used in order to produce a standard unit. B. The mix of workers assigned to the particular job was heavily weighted towards the use of new relatively low paid unskilled workers. C. The mix of workers assigned to the particular job was heavily weighted towards the use of higher paid experienced workers. D. None of the above. 27. In general, the direct labor efficiency variance is the responsibility of the: A. Company president. B. Production manager. C. Industrial engineering. D. Purchasing agent. 28. The production volume variance is the difference between fixed costs on the flexible budget and the fixed costs on the master budget. A. True. B. False. 29. A standard cost system may be used in A. Job-order costing but not process costing. B. Process costing but not job-order costing. C. Either job-order costing or process costing. D. Neither process costing nor job-order costing 30. At the end of the reporting period, all of the production variances are usually closed to cost of goods sold. A. True. B. False