The spending variance:

Select one:

a. holds the overhead rate constant and measures the change in costs caused by changes in activity.

b. finds the difference between actual price and standard quantity

c. holds actual activity constant to find the variance caused by the difference in overhead rates

d. holds standard activity constant to find the variance caused by the difference in variable costs

In a manufacturing company, which of the following variances will not be included in the "Total Flexible Budget Variance"?

Select one:

a. Direct labor: flexible budget variance

b. Sales-volume variance

c. Direct materials: flexible budget variance

d. Variable overhead: flexible budget variance

Management should take responsibility for all unfavourable variances.

Select one:

True

False

Why do companies set price and quantity standards?

Select one:

a. It helps companies prepare budgets and investigate variances.

b. GAAP requires all companies to set standards for their operations.

c. By setting standards, companies can determine their sales targets.

d. Customers often use these standards to compare with other companies.

The revenue portion of the flexible budget variance is known as the:

Select one:

a. standard price variance

b. selling-price variance

c. sales-volume variance

d. flexible revenue variance

If the direct labor price variance is $100 F and the direct labor efficiency variance is $200 U, what is the direct labor flexible budget variance?

Select one:

a. $300 U

b. $100 U

c. $100 F

d. $300 F

A flexible budget is prepared using:

Select one:

a. actual selling prices, actual costs and actual sales volume

b. budgeted selling prices, budgeted costs, and budgeted sales volume

c. actual selling prices, budgeted costs, and actual sales volume

d. budgeted selling prices, budgeted costs, and actual sales volume

You are given the following Static budget and Actual results for ABC Inc's most recent fiscal year:

Static Budget (Based on 10,000 units)		Actual Results (Based on 12,000 units sold)
Sales	$ 100,000		Sales	$ 114,000
Less Variable Costs	-$ 60,000		Less Variable Costs	-$ 81,600
Contribution Margin	$ 40,000		Contribution Margin	$ 32,400
Less Fixed Costs	-$ 20,000		Less Fixed Costs	-$ 20,000
Operating Income	$ 20,000		Operating Income	$ 12,400

Based on the above which of the following statements is correct:

Select one:

a. The static budget variance is $7,600 favourable, the Sales volume variance is $8,000 unfavourable and the flexible budget variance is $15,600 favourable.

b. The static budget variance is $7,600 favourable, the sales volume variance is $8,000 unfavourable and the flexible budget variance is $15,600 favourable.

c. The static budget variance is $7,600 unfavourable, the sales volume variance is $8,000 favourable and the flexible budget variance is $15,600 unfavourable.

d. The static budget variance is $7,600 unfavourable, the sales volume variance is $8,000 unfavourable and the flexible budget variance is $15,600 favourable.

A static budget is prepared using:

Select one:

a. budgeted selling prices, actual costs and actual sales volume

b. actual selling prices, actual costs and actual sales volume

c. budgeted selling prices, budgeted costs and actual sales volume

d. budgeted selling prices, budgeted costs and budgeted sales volume

A company decides to change materials suppliers as it is looking to reduce the cost of its production inputs to cut costs and make the company's offerings more competitive. In doing so, it has lowered its production costs, but product quality and selling price have also decreased proportionately. The decision to change suppliers in this case was unethical.

Select one:

True

False