Multiple Choice

Chapter 8: Flexible budgets, standard costs and variance analysis Multiple-choice questions 39. The master budget is also called a: a. static budget b. flexible budget c. direct budget d. cost budget LO 1 0. Which of the following is the same amount in the master budget and the flexible budget? a. sales volume b. variable costs c. fixed costs d. direct costs LO 1 41. A level of operations within the relevant range. is a set of cost relationships that can be used to estimate costs for any a. static budget b. standard cost c. flexible budget d. master budget LO 1 42. A tool that managers use to estimate the effects of deviations from budget assumptions is known as: a. sensitivity analysis b. variance analysis c. standard costing d. benchmarking LO 1 43. Expected costs per unit of input are called a. Standard prices b. Standard revenues c. Standard quantitie.s d. Standard costs LO 2 44. Standard costing allows management to Plan operations Monitor Performance Control costs a. I andII only b. I and III only c. I and only d. I, II, and III LO 2 45. In a production setting, the standard cost of a unit of output is the sum of the standard costs a. Direct material, direct labour, and variable overhead b. Direct material, direct labour, and fixed overhead c. Direct material, direct labour, variable overhead, and fixed overhead d. Direct material, direct labour, and period costs LO 2 46. Standard costs are established under operating plan assumptions which include Volume of production activity Just in time inventory management Prices and quality of inputs a. I and II only b. I and III only c. II and III only d. I, I, and II LO 2 47. The standard cost of fixed overhead is calculated by: a. standard fixed overhead allocation rate multiplied by standard quantity of direct labour per u of output b. standard fixed overhead allocation rate multiplied by standard quantity of allocation base per unit of input c. standard fixed overhead allocation rate multiplied by standard quantity of allocation base per unit of output d. total fixed overhead multiplied by standard quantity of allocation base per unit of output LO 2 48. Ideal standards assume: a. perfect operating conditions b. normal operating conditions c. substandard operating conditions d, less than 100% efficiency LO 2 49. Standards which assume normal operating conditions are called: a ideal standards b. efficiency standards c. historical standards d. currently attainable standards LO 2