QUESTION 1

1. Which of the following will result in an unfavorable direct materials efficiency variance?

   The actual quantity of direct materials used per unit exceeds the standard quantity of direct materials allowed per unit.

   The actual cost per unit of direct materials exceeds the standard cost of direct materials.

   The actual quantity of direct materials used per unit is less than the standard quantity of direct materials allowed per unit.

   The actual cost per unit of direct materials is less than the standard cost per unit of direct materials.

   QUESTION 2

   An investment center manager is responsible for generating profits and managing invested capital.

   True

   False

   QUESTION 3

   Glen Inc has Actual Variable Costs of $80,000 and Flexible Budget Variable Costs of $90,000. What is the flexible budget variance and is it favorable or unfavorable?

   $170,000 Favorable

   $170,000 Unfavorable

   $10,000 Unfavorable

   $10,000 Favorable

   QUESTION 4

   Total fixed costs in a flexible budget remain constant, within the specified relevant range, when the sales volume changes.

   True

   False

   QUESTION 5

   When a manager intentionally understates expected revenues or overstates expected expenses in order to have a favorable performance evaluation this understatement and overstatement is known as

   revenue and expense management.

   benchmarking.

   sensitivity analysis.

   budgetary slack.

   QUESTION 6

   -Based on the following information for the Starfleet Division, what is Residual Income?

   Minimum Acceptable Operating Income				$50,000
   Operating Income				$90,000
   Net Sales Revenue				$1,000,000

   		$910,000
   		$40,000
   		$140,000
   		$910,000