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Multiple choice

1.The comparison of actual outcomes with desired outcomes is an example of a(n):
Answer

A) planning activity.

B) control activity.

C) operating activity.

D) static activity.

2.Which type of activity includes ensuring that the objectives and goals developed by the organization are being attained?
Answer

A)Planning

B)Operating

C)Control

D)Bookkeeping

3.For a manufacturing company, which of the following budgets does not have to be prepared before a budgeted income statement is prepared?

A) Budgeted cost of goods manufactured

B) Budgeted cost of goods sold

C)Budgeted balance sheet

D)Sales budget

4. MAX Inc.
In early 2009, MAX Inc. had budgeted for the production and sales of 6,000 units at a sales price of $20 per unit. The following information is available regarding the standard cost for each unit:

Direct materials: 2 pounds at $3.00 per lb
Direct labor: 30 minutes of assembly at $.25 per minute

Actual results for 2009 were determined to be as follows:

Number of units produced
and sold: 6,800 units
Sales revenue: $149,600 ($22 per unit)
Direct materials cost: $ 43,384 (14,960 lbs purchased and used at $2.90 per lb)
Direct labor cost: $ 59,024 (210,800 minutes at $.28 per minute)

Refer to the JAX Inc. information above. What was JAX Inc.'s direct materials price variance for 2009?
Answer

A) $1,496 F

B) $1,496 U

C) $1,360 F

D)$1,360 U

5. Which of the following statements regarding the standard cost for direct materials is true?
Answer

A) It would be used on a static budget but not a flexible budget.

B) It would consist of two components รข?" a standard quantity and a standard price.

C) It must be determined after materials are purchased for the year.

D) It can not be determined if a company uses a just-in-time inventory system.

6. When managers use the process called "management by exception":
Answer

A)they take action when there is a significant variance between planned and actual results.

B)They take action when there is a variance of any size or amount between planned and actual results.

C) they are allowed to use standard costs rather than actual costs on financial statements issued to decision makers.

D) they are not required to compute the standard cost of making a product.

7 MAX Inc.
In early 2009, MAX Inc. had budgeted for the production and sales of 6,000 units at a sales price of $20 per unit. The following information is available regarding the standard cost for each unit:

Direct materials: 2 pounds at $3.00 per lb
Direct labor: 30 minutes of assembly at $.25 per minute

Actual results for 2009 were determined to be as follows:

Number of units produced
and sold: 6,800 units
Sales revenue: $149,600 ($22 per unit)
Direct materials cost: $ 43,384 (14,960 lbs purchased and used at $2.90 per lb)
Direct labor cost: $ 59,024 (210,800 minutes at $.28 per minute)

Refer to the JAX Inc. information above. What was JAX Inc.'s direct labor efficiency variance for 2009?
Answer

A) $1,700 F

B) $1,700 U

C) $6,120 F

D) $6,120 U

Solution Summary

The solution explains some multiple choice questions relating to budgeting and variance calculations

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