Question

13. The fixed manufacturing overhead variance caused by actual activity being different from the estimated activity used in calculating the predetermined overhead application rate is called the A. Spending variance. B. Budget variance C. Efficiency variance D. Volume variance. 14. How is performance evaluated for a cost center? A. Actual costs incurred compared to budgeted costs. B. Actual segment margin compared to budgeted segment margin C Comparison of actual and budgeted return on investment (ROU) based on segment margin and assets controlled by the segment D. None of these 15. A favorable materials quantity variance would occur if A. More material is purchased than is used. B. Actual pounds of materials used were less than the standard pounds allowed. C Actual labor hours used was greater than the standard labor hours allowed D. Actual pounds of materials used was greater than the standard pounds allowed 16. April Corporation developed the following per-unit standards for its product 2 pounds of direct material at $3.75 per pound. Last month, 2,000 pounds of direct materials were purchased for $7.600. The direct materials price variance for last month was. A $3,800 favorable. B $200 favorable. C. $100 unfavorable D. $200 unfavorable 17) An individual interested in making a judgment about ofitability of a company should A Review the trend of working capital for several years B. Calculate the company's ROI for the most recent year C Review the trend of the company's ROI for several years D. Compare the company's ROI for the most recent year with the industry average Rol for the most recent year. 18) Which of the following is not a category of financial statement ratios A Financial leverage B. Liquidity C. Profitability D. Prospectus 19) Increasing information systems capabilities would be a critical success factor found in which perspective of the balanced Scorecard? A. Internal business B. Customer Financial D. Learning and growth

Answer 1

13. The fixed manufacturing overhead variance caused by actual activity being different from the estimated activity used in calculating the predetermined overhead application rate is called the;

Answer D .Volume Variance

Explanation

Predetermined overhead application rate is calculated on the basis of estimated activity used such as direct labor hours or machine hours. When the actual activity is different from estimated activity level then fixed manufacturing overhead variance is calculated.

14 How is performance evaluated for a cost center?

Answer A ) Actual Cost incurred compared to Budgeted Costs

Explanation

Performance of a cost center is evaluated by comparing the actual cost incurred with the budgeted cost and if the actual cost incurred is less than budgeted then the performance is good otherwise not.

15 A favorable material quantity variance would occur if

Answer B) Actual pounds of materials used were less than the standard pounds allowed

Explanation

If the actual material used were less than the standard pounds of material allowed then it results in favorable quantity variance.

16 Material Price Variance = A Q* (A P – SP)

                                                 = 2000 * ($3.80 - $3.75)

                                                 = $100 (UF)

17 An individual interested in making a judgment about the profitability of a company should

Answer C) Review the trend of the company’s ROI for several years.

18 Which of the following is not a category of financial statements ratios?

Answer D) Prospectus

Prospectus is not a part of financial statement ratios. It is issued when the company issues the shares.

19 Increasing information systems capabilities would be a critical success factor found in which perspective of the balanced scorecard?

Answer A) Internal Business