Exam: 061683RR - Planning, Performance, Evaluation, and Control
1. There are various budgets within the master budget. One of these budgets is the production budget.
Which of the following best describes the production budget?
A. It details the required direct-labor hours.
B. It summarizes the costs of producing units for the budget period.
C. It's calculated based on the sales budget and the desired ending inventory.
D. It details the required raw materials purchases.
2. Coles Company, Inc. makes and sells a single product, Product R. Three yards of Material K are needed
to make one unit of Product R. Budgeted production of Product R for the next five months is as follows:
August 14,000 Units
September 14,500 units
October 15,500 units
November 12,600 units
December 11,900 units
The company wants to maintain monthly ending inventories of Material K equal to 20% of the following month's production needs. On July 31, this requirement wasn't met because only 2,500 yards of Material K were on hand. The cost of Material K is $0.85 per yard. The company wants to prepare a Direct Materials Purchase Budget for the rest of the year.
The total cost of Material K to be purchased in August is
A. $33,840.
B. $40,970.
C. $42,300.
D. $48,200.
Use the following information to answer this question.
Moorhouse Clinic uses client visits as its measure of activity. During December, the clinic budgeted for 3,700 client visits, but its actual level of activity was 3,690 client visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December:
Data used in budgeting:
Fixed element Variable element
per month per client-visit
Revenue ____-____ $25.10
Personnel expenses $27,100 $7.10
Medical supplies 1,500 4.50
Occupancy expenses 6,000 1.00
Administrative expenses 3,000 0.10
Total expenses $37,600 $12.70
Actual results
for December:
Revenue $96,299
Personnel expenses $51,009
Medical supplies $17,425
Occupancy expenses $9,240
Administrative expenses $3,239
3. The activity variance for personnel expenses in December would be closest to
A. $2,361 U.
B. $2,361 F.
C. $71 F.
D. $71 U.
4. Last year, the House of Orange had sales of $826,650, net operating income of $81,000, and operating assets of $84,000 at the beginning of the year and $90,000 at the end of the year. What was the company's turnover rounded to the nearest tenth?
A. 9.2
B. 9.8
C. 10.2
D. 9.5
Use the following information to answer this question.
Werber Clinic uses client visits as its measure of activity. During January, the clinic budgeted for 2,700 client visits, but its actual level of activity was 2,730 client visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January:
5. The activity variance for net operating income in January would be closest to
A. $2,019 U.
B. $489 F.
C. $489 U.
D. $2,019 F.
6. Vandall Corporation manufactures and sells a single product. The company uses units as the measure of
activity in its budgets and performance reports. During April, the company budgeted for 7,300 units, but its
The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for April would be closest to
A. $6,740 U.
B. $6,740 F.
C. $6,144 U.
D. $6,144 F.
Use the following information to answer this question.
Cole Laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard
costs for one bag of Fastgro as follows:
Standard Standard Cost
Quantity per bag
Direct material 20 pounds $8.00
Direct labor 0.1 hours $1.10
Variable overhead 0.1 hours $0.40
The company had no beginning inventories of any kind on January 1. Variable overhead is applied to
production on the basis of standard direct-labor hours. During January, the company recorded the following
activity:
• Production of Fastgro: 4,000 bags
• Direct materials purchased: 85,000 pounds at a cost of $32,300
• Direct-labor worked: 390 hours at a cost of $4,875
• Variable overhead incurred: $1,475
• Inventory of direct materials on January 31: 3,000 pounds
7. The labor rate variance for January is
A. $585 F.
B. $585 U.
C. $475 U.
D. $475 F.
Use the following information to answer this question.
Moorhouse Clinic uses client visits as its measure of activity. During December, the clinic budgeted for
3,700 client visits, but its actual level of activity was 3,690 client visits. The clinic has provided the
8. The medical supplies in the flexible budget for December would be closest to
A. $17,378.
B. $18,105.
C. $18,150.
D. $17,472.
Use the following information to answer this question.
Cole Laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard
9. The labor efficiency variance for January is
A. $475 F.
B. $350 U.
C. $110 F.
D. $130 U.
10. The Charade Company is preparing its Manufacturing Overhead budget for the fourth quarter of the
year. The budgeted variable factory overhead is $5.00 per direct-labor hour; the budgeted fixed factory
overhead is $75,000 per month, of which $15,000 is factory depreciation. If the budgeted direct-labor time
for December is 8,000 hours, then total budgeted factory overhead per direct-labor hour (rounded) is
A. $16.25.
B. $9.38.
C. $12.50.
D. $14.38.
Use the following information to answer this question.
Werber Clinic uses client visits as its measure of activity. During January, the clinic budgeted for 2,700
11. The activity variance for administrative expenses in January would be closest to
A. $12 F.
B. $8 U.
C. $12 U.
D. $8 F.
12. The budget or schedule that provides necessary input data for the direct-labor budget is the
A. raw materials purchases budget.
B. production budget.
C. schedule of cash collections.
D. cash budget.
Use the following information to answer this question.
Moorhouse Clinic uses client visits as its measure of activity. During December, the clinic budgeted for
3,700 client visits, but its actual level of activity was 3,690 client visits. The clinic has provided the
13. The personnel expenses in the planning budget for December would be closest to
A. $51,009.
B. $51,147.
C. $53,370.
D. $53,299.
14. The LFM Company makes and sells a single product, Product T. Each unit of Product T requires 1.3 hours of direct labor at a rate of $9.10 per direct-labor hour. LFM Company needs to prepare a direct-labor budget for the second quarter of next year. The budgeted direct-labor cost per unit of Product T would be
A. $7.00.
B. $11.83.
C. $9.10.
D. $10.40.
15. The company plans to sell 22,000 units of Product WZ in June. The finished-goods inventories on June 1 and June 30 are budgeted to be 100 and 400 units, respectively. The direct labor hours are 11,000 and the direct labor rate is $10.50. Budgeted direct-labor costs for June would be
A. $117,075.
B. $455,700.
C. $462,000.
D. $234,150.
Use the following information to answer this question.
Moorhouse Clinic uses client visits as its measure of activity. During December, the clinic budgeted for
16. The spending variance for medical supplies in December would be closest to
A. $725 U.
B. $725 F.
C. $680 F.
D. $680 U.
Use the following information to answer this question.
Cole Laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard
17. The materials price variance for January is
A. $1,300 U.
B. $1,700 F.
C. $1,640 U.
D. $1,640 F.
Use the following information to answer this question.
Werber Clinic uses client visits as its measure of activity. During January, the clinic budgeted for 2,700
client visits, but its actual level of activity was 2,730 client visits. The clinic has provided the following data
End of exam
concerning the formulas used in its budgeting and its actual results for January:
Data used in budgeting:
Fixed element Variable element
per month per client-visit
Revenue ___-___ $33.60
Personnel expenses $22,100 $8.70
Medical supplies 1,100 6.60
Occupancy expenses 5,600 1.60
Administrative expenses 3,700 0.40
Total expenses $32,500 $17.30
Actual results
for January:
Revenue $93,408
Personnel expenses $46,251
Medical supplies $19,348
Occupancy expenses $9,508
Administrative expenses $4,772
18. The activity variance for personnel expenses in January would be closest to
A. $261 U.
B. $661 F.
C. $661 U.
D. $261 F.
19. A company's average operating assets are $220,000, and its net operating income is $44,000. The company invested in a new project, increasing average assets to $250,000 and increasing its net operating income to $49,550. What is the project's residual income if the required rate of return is 20%?
A. $450
B. $600
C. ($600)
D. ($450)
20. Which of the following will not result in an increase in return on investment (ROI), assuming other factors remain the same?
A. An increase in operating assets
B. An increase in net operating income
C. An increase in sales
D. A reduction in expenses
1. There are various budgets within the master budget. One of these budgets is the production budget.
Which of the following best describes the production budget?
A. It details the required direct-labor hours.
B. It summarizes the costs of producing units for the budget period.
C. It's calculated based on the sales budget and the desired ending inventory.
D. It details the required raw materials purchases.
2. Coles Company, Inc. makes and sells a single product, Product R. Three yards of Material K are needed
to make one unit of Product R. Budgeted production of Product R for the next five months is as follows:
August 14,000 Units
September 14,500 units
October 15,500 units
November 12,600 units
December 11,900 units
The company wants to maintain monthly ending inventories of Material K equal to 20% of the following month's production needs. On July 31, this requirement wasn't met because only 2,500 yards of Material K were on hand. The cost of Material K is $0.85 per yard. The company wants to prepare a Direct Materials Purchase Budget for the rest of the year.
The total cost of Material K to be purchased in August is
A. $33,840.
B. $40,970.
C. $42,300.
D. $48,200.
Use the following information to answer this question.
Moorhouse Clinic uses client visits as its measure of activity. During December, the clinic budgeted for 3,700 client visits, but its actual level of activity was 3,690 client visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for December:
Data used in budgeting:
Fixed element Variable element
per month per client-visit
Revenue ____-____ $25.10
Personnel expenses $27,100 $7.10
Medical supplies 1,500 4.50
Occupancy expenses 6,000 1.00
Administrative expenses 3,000 0.10
Total expenses $37,600 $12.70
Actual results
for December:
Revenue $96,299
Personnel expenses $51,009
Medical supplies $17,425
Occupancy expenses $9,240
Administrative expenses $3,239
3. The activity variance for personnel expenses in December would be closest to
A. $2,361 U.
B. $2,361 F.
C. $71 F.
D. $71 U.
4. Last year, the House of Orange had sales of $826,650, net operating income of $81,000, and operating assets of $84,000 at the beginning of the year and $90,000 at the end of the year. What was the company's turnover rounded to the nearest tenth?
A. 9.2
B. 9.8
C. 10.2
D. 9.5
Use the following information to answer this question.
Werber Clinic uses client visits as its measure of activity. During January, the clinic budgeted for 2,700 client visits, but its actual level of activity was 2,730 client visits. The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for January:
5. The activity variance for net operating income in January would be closest to
A. $2,019 U.
B. $489 F.
C. $489 U.
D. $2,019 F.
6. Vandall Corporation manufactures and sells a single product. The company uses units as the measure of
activity in its budgets and performance reports. During April, the company budgeted for 7,300 units, but its
The overall revenue and spending variance (i.e., the variance for net operating income in the revenue and spending variance column on the flexible budget performance report) for April would be closest to
A. $6,740 U.
B. $6,740 F.
C. $6,144 U.
D. $6,144 F.
Use the following information to answer this question.
Cole Laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard
costs for one bag of Fastgro as follows:
Standard Standard Cost
Quantity per bag
Direct material 20 pounds $8.00
Direct labor 0.1 hours $1.10
Variable overhead 0.1 hours $0.40
The company had no beginning inventories of any kind on January 1. Variable overhead is applied to
production on the basis of standard direct-labor hours. During January, the company recorded the following
activity:
• Production of Fastgro: 4,000 bags
• Direct materials purchased: 85,000 pounds at a cost of $32,300
• Direct-labor worked: 390 hours at a cost of $4,875
• Variable overhead incurred: $1,475
• Inventory of direct materials on January 31: 3,000 pounds
7. The labor rate variance for January is
A. $585 F.
B. $585 U.
C. $475 U.
D. $475 F.
Use the following information to answer this question.
Moorhouse Clinic uses client visits as its measure of activity. During December, the clinic budgeted for
3,700 client visits, but its actual level of activity was 3,690 client visits. The clinic has provided the
8. The medical supplies in the flexible budget for December would be closest to
A. $17,378.
B. $18,105.
C. $18,150.
D. $17,472.
Use the following information to answer this question.
Cole Laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard
9. The labor efficiency variance for January is
A. $475 F.
B. $350 U.
C. $110 F.
D. $130 U.
10. The Charade Company is preparing its Manufacturing Overhead budget for the fourth quarter of the
year. The budgeted variable factory overhead is $5.00 per direct-labor hour; the budgeted fixed factory
overhead is $75,000 per month, of which $15,000 is factory depreciation. If the budgeted direct-labor time
for December is 8,000 hours, then total budgeted factory overhead per direct-labor hour (rounded) is
A. $16.25.
B. $9.38.
C. $12.50.
D. $14.38.
Use the following information to answer this question.
Werber Clinic uses client visits as its measure of activity. During January, the clinic budgeted for 2,700
11. The activity variance for administrative expenses in January would be closest to
A. $12 F.
B. $8 U.
C. $12 U.
D. $8 F.
12. The budget or schedule that provides necessary input data for the direct-labor budget is the
A. raw materials purchases budget.
B. production budget.
C. schedule of cash collections.
D. cash budget.
Use the following information to answer this question.
Moorhouse Clinic uses client visits as its measure of activity. During December, the clinic budgeted for
3,700 client visits, but its actual level of activity was 3,690 client visits. The clinic has provided the
13. The personnel expenses in the planning budget for December would be closest to
A. $51,009.
B. $51,147.
C. $53,370.
D. $53,299.
14. The LFM Company makes and sells a single product, Product T. Each unit of Product T requires 1.3 hours of direct labor at a rate of $9.10 per direct-labor hour. LFM Company needs to prepare a direct-labor budget for the second quarter of next year. The budgeted direct-labor cost per unit of Product T would be
A. $7.00.
B. $11.83.
C. $9.10.
D. $10.40.
15. The company plans to sell 22,000 units of Product WZ in June. The finished-goods inventories on June 1 and June 30 are budgeted to be 100 and 400 units, respectively. The direct labor hours are 11,000 and the direct labor rate is $10.50. Budgeted direct-labor costs for June would be
A. $117,075.
B. $455,700.
C. $462,000.
D. $234,150.
Use the following information to answer this question.
Moorhouse Clinic uses client visits as its measure of activity. During December, the clinic budgeted for
16. The spending variance for medical supplies in December would be closest to
A. $725 U.
B. $725 F.
C. $680 F.
D. $680 U.
Use the following information to answer this question.
Cole Laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard
17. The materials price variance for January is
A. $1,300 U.
B. $1,700 F.
C. $1,640 U.
D. $1,640 F.
Use the following information to answer this question.
Werber Clinic uses client visits as its measure of activity. During January, the clinic budgeted for 2,700
client visits, but its actual level of activity was 2,730 client visits. The clinic has provided the following data
End of exam
concerning the formulas used in its budgeting and its actual results for January:
Data used in budgeting:
Fixed element Variable element
per month per client-visit
Revenue ___-___ $33.60
Personnel expenses $22,100 $8.70
Medical supplies 1,100 6.60
Occupancy expenses 5,600 1.60
Administrative expenses 3,700 0.40
Total expenses $32,500 $17.30
Actual results
for January:
Revenue $93,408
Personnel expenses $46,251
Medical supplies $19,348
Occupancy expenses $9,508
Administrative expenses $4,772
18. The activity variance for personnel expenses in January would be closest to
A. $261 U.
B. $661 F.
C. $661 U.
D. $261 F.
19. A company's average operating assets are $220,000, and its net operating income is $44,000. The company invested in a new project, increasing average assets to $250,000 and increasing its net operating income to $49,550. What is the project's residual income if the required rate of return is 20%?
A. $450
B. $600
C. ($600)
D. ($450)
20. Which of the following will not result in an increase in return on investment (ROI), assuming other factors remain the same?
A. An increase in operating assets
B. An increase in net operating income
C. An increase in sales
D. A reduction in expenses
No comments:
Post a Comment