QUESTION 11

An unfavorable materials variance is caused by

• . . Paying employees a higher wage than the standard

• . . Paying employees a lower wage than the standard

• . . Purchasing material at a cost that is lower than the standard

• . . . Cannot determine based on the information given

5 points

QUESTION 12

At Flint Company, the unit sales price is $84; the unit variable cost is $62 and fixed costs total $202,400. What is the break-even in units?

• . . 8,400

• . . 9,000

• . . 9,200

• . . 9,400

5 points

QUESTION 13

When making a decision to accept additional production work a manager needs to look closely at which of the following:

• . . The additional revenue should be at least 25% above the current revenue without the additional production work

• . . The incremental or differential costs of the additional work should not exceed incremental or differential revenue

• . . The additional production should exceed the current capacity by no more than 15%

• . . The combined incremental or differential costs of production should exceed the incremental or differential revenue of the total production run by 15%

• 5 points

QUESTION 14

A current ratio of 4.5 would indicate to management

• . . . They need to invest their excess cash

• . . The company is not able to pay off its current debt

• . . Sales are too high

• . . The company is paying more for material than their competitors

QUESTION 15

If a manager sets the budget expectations way too high, the likely result will be

• . . The manager will receive a higher bonus at year end

• . . There will be excess assembly time required resulting in a lower material variance

• . . The employees will give up since the budget is unobtainable

• . . Employees will receive a bonus and therefore the labor variance will be lowered