ABC manufacturing firm prepares analysis for variable overhead variances. A $8,500 unfavorable flexible-budget variance indicates that ________.

Select one:

a. the flexible-budget amount exceeded standard variable manufacturing overhead by $8,500

b. the flexible-budget amount exceeded actual variable manufacturing overhead by $8,500

c. the actual variable manufacturing overhead exceeded the flexible-budget amount by $8,500

d. the standard variable manufacturing overhead exceeded the flexible-budget amount by $8,500

In cost volume profit analysis, which of the followings is true if total fixed costs decrease while the sales price per unit and variable cost per unit remain unchanged?

Select one:

a. The contribution margin increases.

b. The contribution margin decreases.

c. The breakeven point decreases.

d. The breakeven point increases.

When preparing flexible budget, in which of the following scenarios can ABC Corporation NOT have favorable flexible budget variance for direct materials?

When direct material price variance is ________, and when direct material quantity variance is ________,

Select one:

a. favorable; unfavorable

b. favorable; favorable

c. unfavorable; unfavorable

d. unfavorable; favorable

In cost volume profit analysis, an increase in contribution margin (CM) per unit can be made by a(n) ________ in sales price per unit and a(n) ________ in variable costs per unit.

Select one:

a. decrease, decrease

b. decrease, increase

c. increase, increase

d. increase, decrease

HELEEN Manufacturing Company prepares master budget. The Company had a static budgeted operating income of $9.6 million. Actual operating income was $6.4 million. The flexible budget operating income at the actual level of output is $7,000,000. What is the static-budget variance of operating income?

Select one:

a. $1.6 million Unfavorable

b. $3.2 million Unfavorable

c. $3.2 million Favorable

d. $1.6 million Favorable

Indicate which of the followings about budgets and budgeting is FALSE?

Select one:

a. Managers do not use budgets for performance evaluation.

b. Budgeting is the process of formulating an organization's plans.

c. Budgets help coordinate financial and operational activities.

d. The vast majority of managers use budgeting as an effective cost management tool.

In budgeting, which of the following is NOT a reason for budgetary slack?

Select one:

a. to provide protection against cost increases or revenue shortfalls due to unforeseen events

b. to facilitate attainment of performance goals

c. to buffer managers from budget cuts imposed by top management

d. to impose a formal structure for planning purposes

HALA Manufacturing Company prepares master budget for the next year. The static budget variance is equal to the sum of ________ and ________.

Select one:

a. direct materials price variance; sales volume variance

b. fixed budget variance; variable overhead variance

c. flexible budget variance; sales volume variance

d. flexible budget variance; direct labor variance