3. Olivier Framing's cost formula for its supplies cost is $2,870 per month plus $16 per frame. For the month of January, the company planned for activity of 533 frames, but the actual level of activity was 534 frames. The actual supplies cost for the month was $11,080. The spending variance for supplies cost in January would be closest to:

Select one:

a. $334 U

b. $334 F

c. $318 U

d. $318 F

4. The materials price variance should be computed:

Select one:

a. based upon the difference between the actual quantity of inputs and the standard quantity allowed for output times the standard price.

b. based upon the amount of materials used in production when only a portion of materials purchased is actually used.

c. when materials are purchased.

d. when materials are used in production.

5. A favorable materials price variance coupled with an unfavorable material usage variance would most likely result from:

Select one:

a. the purchase and use of lower than standard quality material.

b. machine efficiency problems.

c. labor efficiency problems.

d. the purchase and use of higher than standard quality material.

7. Brummitt Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.05 direct labor-hours. The direct labor rate is $7.50 per direct labor-hour. The production budget calls for producing 9,100 units in May and 8,800 units in June. If the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months?

Select one:

a. $3,300.00

b. $6,712.50

c. $3,412.50

d. $3,356.25

8. Which of the following comparisons best isolates the impact that changes in prices of inputs and outputs have on performance?

Select one:

a. static planning budget and flexible budget

b. static planning budget and actual results

c. flexible budget and actual results

d. master budget and static planning budget

10. Ofarrell Snow Removal's cost formula for its vehicle operating cost is $1,840 per month plus $377 per snow-day. For the month of November, the company planned for activity of 14 snow-days, but the actual level of activity was 19 snow-days. The actual vehicle operating cost for the month was $9,280. The vehicle operating cost in the flexible budget for November would be closest to:

Select one:

a. $9,280

b. $9,003

c. $7,118

d. $9,660

11. Harville Midwifery's cost formula for its wages and salaries is $1,610 per month plus $199 per birth. For the month of March, the company planned for activity of 118 births, but the actual level of activity was 122 births. The actual wages and salaries for the month was $25,430. The spending variance for wages and salaries in March would be closest to:

Select one:

a. $338 F

b. $458 F

c. $458 U

d. $338 U

13. Guilbault Midwifery's cost formula for its wages and salaries is $2,340 per month plus $154 per birth. For the month of June, the company planned for activity of 115 births, but the actual level of activity was 112 births. The actual wages and salaries for the month was $19,530. The wages and salaries in the planning budget for June would be closest to:

Select one:

a. $19,588

b. $20,050

c. $19,530

d. $20,053

15. Reuer Midwifery's cost formula for its wages and salaries is $2,900 per month plus $475 per birth. For the month of March, the company planned for activity of 116 births, but the actual level of activity was 117 births. The actual wages and salaries for the month was $56,270. The activity variance for wages and salaries in March would be closest to:

Select one:

a. $475 U

b. $1,730 F

c. $1,730 U

d. $475 F

18. ABC Company has a cash balance of $9,000 on April 1. The company must maintain a minimum cash balance of $6,000. During April expected cash receipts are $45,000. Expected cash disbursements during the month total $52,000. During April the company will need to borrow:

Select one:

a. $2,000

b. $8,000

c. $4,000

d. $6,000

21. The concept of responsibility accounting means that:

Select one:

a. An employee's performance should be evaluated only by his or her immediate supervisor.

b. Budgetary data should be reviewed and approved by the budget committee.

c. An employee's performance should be evaluated only on those items under his or her control.

d. Budgetary data should be reviewed and approved by all levels of management.

22. Posson Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $210 per month plus $96 per job plus $20 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in March to be 20 jobs and 162 meals, but the actual activity was 17 jobs and 164 meals. The actual cost for catering supplies in March was $4,990. The spending variance for catering supplies in March would be closest to:

Select one:

a. $132 U

b. $380 U

c. $380 F

d. $132 F

23. Kissack Corporation produces large commercial doors for warehouses and other facilities. In the most recent month, the company budgeted production of 4,000 doors. Actual production was 4,300 doors. According to standards, each door requires 9.3 machine-hours. The actual machine-hours for the month were 40,430 machine-hours. The budgeted supplies cost is $6.20 per machine-hour. The actual supplies cost for the month was $234,614. The variable overhead efficiency variance for supplies cost is:

Select one:

a. $13,324 U

b. $13,324 F

c. $2,728 F

d. $2,728 U

26. Cahalane Natural Dying Corporation measures its activity in terms of skeins of yarn dyed. Last month, the budgeted level of activity was 11,600 skeins and the actual level of activity was 12,000 skeins. The company's owner budgets for dye costs, a variable cost, at $0.31 per skein. The actual dye cost last month was $3,540. In the company's flexible budget performance report for last month, what would have been the spending variance for dye costs?

Select one:

a. $180 F

b. $118 U

c. $56 F

d. $124 U

27. Johannsen Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $310 per month plus $103 per job plus $23 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in February to be 28 jobs and 187 meals, but the actual activity was 26 jobs and 192 meals. The actual cost for catering supplies in February was $7,620. The catering supplies in the flexible budget for February would be closest to:

Select one:

a. $7,620

b. $7,404

c. $6,960

d. $7,495

28. The manufacturing overhead budget at Ferrucci Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 1,600 direct labor-hours will be required in December. The variable overhead rate is $4.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $25,120 per month, which includes depreciation of $5,440. All other fixed manufacturing overhead costs represent current cash flows. The December cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

Select one:

a. $19,680

b. $7,040

c. $26,720

d. $32,160

30. There are various budgets within the master budget. One of these budgets is the production budget. Which of the following BEST describes the production budget?

Select one:

a. It details the required raw materials purchases.

b. It summarizes the costs of producing units for the budget period.

c. It is calculated based on the sales budget and the desired ending inventory.

d. It details the required direct labor hours.

31. A favorable materials price variance coupled with an unfavorable material usage variance would MOST likely result from:

Select one:

a. changes in the product mix.

b. the purchase of low quality materials.

c. problems with processing machines.

d. problems with labor efficiency.

38. Brattain Tile Installation Corporation measures its activity in terms of square feet of tile installed. Last month, the budgeted level of activity was 1,230 square feet and the actual level of activity was 1,140 square feet. The company's owner budgets for supply costs, a variable cost, at $2.10 per square foot. The actual supply cost last month was $3,260. In the company's flexible budget performance report for last month, what would have been the spending variance for supply costs?

Select one:

a. $257 F

b. $677 U

c. $866 U

d. $189 F

39. Keppler Corporation applies manufacturing overhead to products on the basis of standard machine-hours. The company's cost formula for variable overhead cost is $4.90 per machine-hour. The actual variable overhead cost for the month was $25,160. The original budget for the month was based on 5,000 machine-hours. The company actually worked 5,320 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 5,220 machine-hours. What was the variable overhead efficiency variance for the month?

Select one:

a. $418 favorable

b. $908 favorable

c. $490 unfavorable

d. $1,078 unfavorable

40. Golebiewski Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 4,900 direct labor-hours will be required in November. The variable overhead rate is $8.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $78,400 per month, which includes depreciation of $10,290. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for November should be:

Select one:

a. $24.40

b. $16.00

c. $8.40

d. $22.30