Question

Question 15) Mountain Sports Equipment Company projected sales of 82,000 units at a unit sales price of $12 for the year Actual sales for the year were 76,000 units at $14.00 per unit. Variable costs were budgeted at $3 per unit, and the actual amount wag $6 per unit. Budgeted fixed costs totaled $376,000, while actual fixed costs amounted to $410,000. What is the sales volume variance for total revenue?

A) 80,000 favorable

B) $80,000 unfavorable

c)$72,000 unfavorable

d)$72,000 favorable

Question 17 )The sales volume variance is the differernc between the ?

A) Actual results and the expected results in the flexible budget for the actual units sold

B)Expected results in the flexible budget for the actual units sold and the static budget

c)Static budget and actual amounts due to differences in sales price

d)flexible budget and static budget due to differences in fixed costs

Question 18 )Generals Co.can further process Product B to Product product A. product B currently selling for $12 per Generals Co can further process Product B to p pound and costs $9 per pound to produce. Product A would sell for $20 per pound and would require an additional cost of $5 per pound to produce.

What is the differential cost of producing Product A?

A) $9 per pound

B) $14 per pound

c)$5 per pound

d)$3 per pound

Question 23) Grand Canyon Food Products is famous for its frosted fruit cake. The main ingredient of the cake is dried fruit which Grand Canyon purchases by the pound. In addition, the production requires a certain amount of direct labor. Grand Canyon uses a standard cost system, and at the end of the first quarter, there was an unfavorable direct materials efficiency variance. Which of the following is a logical explanation for that variance?

A) The production manager negotiated a lower wage package for production staff, bringing direct labor costs down

B)The factory lost two experienced workers at the beginning of the quarter, and their replacements wasted a large amount of dried fruits during their training period

C) The purchasing amount set by ager was able to secure a volume discount on dried frust, purchasing the fruit for less than the amount set by standard

d)The production staff changed the work flow process so that production required fewer direct labor hours

Question 25 )A company's production department was experiencing a high defect rate on the assembly line, which was slowing down production and causing wastage of valuable direct materials. The production manager decided to recruit some highly skilled production workers from another company to bring down the defect rate but was worried that the higher wages of these workers might negatively affect operating income. This would produce a(n)

A) Unfavorable direct materials cost variance

B)Unfavorable direct labor cost variance

c)Unfavorable direct labor efficiency variance

D)Unfavorable direct materials efficiency variance

Question 29 )What does a favorable direct materials cost variance indicate?

A)The actual quantity of direct materials used was less than the standard quantity

B)The actual cost of deect materials purchased was Iess than the standard cost of drect materials purchased

c)The actual cost of drect materials purchased was eater than the standard cost of drect materials purchased

d)The actual quantity of drect materials used was eater than the standard quantity

Question 35) Cavalaris Products uses a standard cost system. Overhead costs are allocated based on direct labor hours. In the first quarter, Cavalaris had an unfavorable cost variance for variable overhead costs. Which of the following scenarios is a reasonable explanation for this variance?

A) The actual mumber of direct labor hours was lower than the buderted hours

B)The actual variable overhead costs were higher than the budgrted costs

C)The actual variable overhead costs were lower than the budgntnd costs

D)The actual number of darect labor bours was bigber than the bodgeted hours

Question 39) Guru Co. produces two products. Both products pass through a firing process that is operating at full capacity and is a production bottleneck. Product A requires 2 hours of processing and has a contribution margin per unit of $60. Product B requires 1 hour of processing and has a contribution margin of $40. Which of the following provides the most accurate assessment of the situation assuming unlimited demand for each product?

A)Production of Product B rather than Product A will generate the maximum profitability for Guru

B)Production of Product A rather than Product B will generate the maximum profitability for Guru

c)Raising the selling price of Product B by $20 will cause management to be indifferent between producing Product A or Product B

D)Raising the selling price of Product A by $10 will cause management to be indifferent betuween producing Product A or Product B

Question 40 )Which of the following statements would be a correct analysis of the flexible budget yariance for variable costs?

A)Decrease in sales price per unit

B)Increase in variable cost per unit

c)Increase in sales volume

D)Increase in sales price per unit

Answer 1

The sales volume variance is the difference between the actual and expected number of units sold, multiplied by the budgeted price per unit. The formula is: (Actual units sold - Budgeted units sold) x Budgeted price per unit. = Sales volume variance.

Thus, sales volume variance is (76,000 units – 82,000 units) x $12 = $72,000 unfavorable.

As the actual units sold were less than budgeted the variance is unfavorable. Thus, option c is correct.