Question

1.Which of the following remains the same when comparing a flexible budget to a master budget?

Total sales.

Net income.

Total variable costs.

Total fixed costs.

None of the answer choices is correct.

2.When ideal standards are used, which of the following is most likely true?

The standards are not likely to be achieved.

The standards allow for occasional downtime for equipment.

The standards reflect what really happens in the factory.

The standards motivate employees to achieve perfection.

None of the answer choices is correct.

3.Which one of the following is most likely to be the responsibility of the purchasing manager?

The materials quantity variance.

The materials price variance.

The overhead volume variance.

The labor efficiency variance.

None of the answer choices is correct.

4.Baxter Company incurred labor costs of $10,800 in June (payable in July) for work requiring 1,100 standard hours at a standard rate of $10 per hour; 1,200 actual direct labor hours were worked. Based on this information, what was the labor efficiency variance?

$200 favorable.

$1,200 favorable.

$1,000 favorable.

$1,000 unfavorable.

None of the answer choices is correct.

5.Which of the following is a possible cause for an unfavorable labor rate variance?

An unexpected increase in hiring new unskilled personnel.

Producing fewer units than expected.

An unexpected increase in demand caused the direct labor workforce to work overtime.

Using attainable standards rather than ideal standards.

None of the answer choices is correct.

Answer 1

The answer is Total fixed costs.

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The answer is The standards motivate employees to achieve perfection.

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The answer is The materials price variance.

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Labor efficiency variance = (Standard hours - Actual hours) * Standard rate

= (1,100 - 1,200) * $10

= $1,000 Unfavorable

The answer is $1,000 Unfavorable

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The answer is An unexpected increase in demand caused the direct labor workforce to work overtime.