Question 7

Beta Company collects 80% of a month's sales in the month of sale and 20% of sales in the following month. What are the cash collections for October?

August sales: $850

September sales: $900

October sales: $1,000

A.$860

B. $980

C. $920

D. $890

Question 8

Which of the following statements is false?

A. Standard costs (e.g., how much should be paid for each unit of input) are benchmarks for measuring performance.

B. Managers should investigate only unfavorable variances.

C. A variance is the difference between the budgeted amount and actual amount.

D. Variance analysis enhances responsibility accounting.

Question 9

Which of the following statements is not correct?

A. The production budget is not based on the revenue budget.

B. The revenue budget is the starting point in preparing the master budget.

C. The cash budget is used to determine whether the firm will have enough cash on hand.

D. The revenue budget is constructed by multiplying the expected sales in units by the sales price.

Question 10

A labor rate variance is due solely to the difference

A. Between budgeted labor price and actual labor price

B. Between budgeted direct labor hours and actual direct labor hours

C. Between budgeted materials price and actual materials price

D. Between budgeted sales volume and actual sales volume