QUESTION 31

A loan in the amount of $4000 was taken out at the end of Q1 at 4%. If it is paid back the end of Q4 and there was no other financing during the year, what will the cash budget show for total borrowing and total interest?

Total borrowing of $4160 and total interest of $160

Total borrowing of $4000 and total interest of $160

Total borrowing of $4120 and total interest of $120

Total borrowing of $4000 and total interest of $120

Total borrowing of $3840 and total interest of $160

QUESTION 32

A carpet manufacturer's cost formula for supplies is $1000 per month plus $20 per installation assignment. For the upcoming quarter the company planned for an activity level of 600 installations but the actual number of installations was 594. The actual amount spent on supplies was $12,200. The supplies cost for the actual level of activity in May--the number in the column titled "Flexible Budget" -- would be:

$12,000

$12,200

$12,880

$13,000

none of the above

QUESTION 33

When the activity level is greater than budgeted, the flexible performance budget

will likely show Unfavorable Activity Variances

will have no changes in fixed expenses, within the relevant range.

will provide a better picture for better decisions than a budget without the "flexible column."

uses a cost formula to determine variable expenses within the budget. This formula is used regardless of the activity level.

all of the above

QUESTION 34

The QRS Company manufactures a product with standards for direct labor of:

4 DL Hours per unit $12/DL hour During the month 1000 units of output were manufactured using 4100 hours of direct labor at $12.20 per direct labor hour. The direct labor efficiency variace is:

$1200 U

$1200 F

$2020 U

$2020 F

none of the above

QUESTION 35

The TUV Company has the following standards for materials:

Price = $5/lb 100 lbs are required for production The actual results were: price of $4.80/lb. 150 lbs purchased and 107 lbs used in production.

What is the materials price variance?

$220 U

$30 F

$21.40 F

$1.40 U

none of the above.

QUESTION 36

When a Labor Rate Variance is favorable

the hours worked were less than the hours budgeted.

the hours worked were more than the hours budgeted.

the rate paid to production workers exceeded the budget.

the rate paid to production workers was less than what was budgeted.

none of the above.

QUESTION 37

In accounting when performing differential analysis, relevant costs

differ among alternatives.

synonymous with variable costs.

are "material" or significant.

are assessed with statistical control charts.

all of the above.

QUESTION 38

Management by Exception and Statistical Control Charts

are useful in differential analysis.

help determine which variances to investigate.

enhance cost volume profit analysis.

are the basis of flexible performance reports.

all of the above.

QUESTION 39

Sunk costs:

cannot be recouped.

are not relevant when performing differential analysis.

are opportunity costs.

a and b.

all of the above.

QUESTION 40

If an unfavorable variance is a magnitude that is 3 standard deviations away from the mean,

	it should most likely be investigated.
	it would be considered an extremely large variance.
	it may mean an error in the standards upon which the variance was calculated.
	all of the above.
	none of the above.