Fundamentals Of Cost Accounting (6th Edition)
6th Edition
ISBN: 9781259969478
Author: WILLIAM LANEN, Shannon Anderson, Michael Maher
Publisher: McGraw Hill Education
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Chapter 16, Problem 17CADQ
To determine
Identify whether the given statement is true or false.
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Identify the cause of an unfavorable variance in profit.
a.Actual labor cost is lower than budget
b.Actual sales volume is higher than budget
c.Actual material cost is higher than budget
d. Actual sales price is higher than budget
Explain
This variance is the difference involving spending less or using less than the budgeted amount.
An adverse cost variance occurs when actual cost is:a) more than budgeted cost at actual volumesb) less than budgeted cost at actual volumesc) the same as than budgeted cost at estimated volumesd) more than budgeted cost at estimated volumes
Chapter 16 Solutions
Fundamentals Of Cost Accounting (6th Edition)
Ch. 16 - What are the advantages of the contribution margin...Ch. 16 - How can a budget be used for performance...Ch. 16 - The flexible budget for coats it computed by...Ch. 16 - A flexible budget is: a. Appropriate for control...Ch. 16 - What is the standard cost sheet?Ch. 16 - What is the basic difference between a mailer...Ch. 16 - Standards and budgets are the same thing. True or...Ch. 16 - Actual direct materials costs differ from the...Ch. 16 - Fixed cost variances are computed differently from...Ch. 16 - What is the advantage of preparing the flexible...
Ch. 16 - What is the link between flexible budgeting and...Ch. 16 - Actual revenues are greater than budgeted for...Ch. 16 - Pick an organization you know, such as a school,...Ch. 16 - Give two reasons why dividing production cost...Ch. 16 - Prob. 15CADQCh. 16 - My firm has a wage contract with the union....Ch. 16 - Prob. 17CADQCh. 16 - The production volume variance should be charged...Ch. 16 - Prob. 19CADQCh. 16 - Prob. 20CADQCh. 16 - Flexible Budgeting The master budget at Western...Ch. 16 - Sales Activity Variance Refer to the data in...Ch. 16 - Profit Variance Analysis Refer to the data in...Ch. 16 - Flexible Budget Given the data shown in the...Ch. 16 - Fill in Amounts on Flexible Budget Graph Fill in...Ch. 16 - Flexible Budget Label (a) and (b) in the graph and...Ch. 16 - Prepare Flexible Budget Osage, Inc., manufactures...Ch. 16 - Sales Activity Variance Refer to the data in...Ch. 16 - Profit Variance Analysis Use the information from...Ch. 16 - Sales Activity Variance The following data are...Ch. 16 - Sales Activity Variance Selected data for October...Ch. 16 - Prob. 32ECh. 16 - Prob. 33ECh. 16 - Prob. 34ECh. 16 - Prob. 35ECh. 16 - Prob. 36ECh. 16 - Prob. 37ECh. 16 - Variable Cost Variances The following data reflect...Ch. 16 - Variable Cost Variances The records of Norton,...Ch. 16 - (Appendix used in requirement [b]) Variable Cost...Ch. 16 - (Appendix used in requirement [b]) Variable Cost...Ch. 16 - Fixed Cost Variances Information on Carney...Ch. 16 - Prob. 43ECh. 16 - Prob. 44ECh. 16 - Fixed Cost Variances Mint Company applies fixed...Ch. 16 - Prob. 46ECh. 16 - Prob. 47ECh. 16 - (Appendix used in requirement [c]) Comprehensive...Ch. 16 - Comprehensive Cost Variance Analysis NSF Lube is a...Ch. 16 - Overhead Variances Brice Corporation shows the...Ch. 16 - Solve for Master Budget Given Actual Results A new...Ch. 16 - Find Missing Data for Profit Variance Analysis...Ch. 16 - Find Data for Profit Variance Analysis Required...Ch. 16 - Prob. 54PCh. 16 - Prepare Flexible Budget Odessa, Inc., reports the...Ch. 16 - Prob. 56PCh. 16 - Prob. 57PCh. 16 - Prob. 58PCh. 16 - Prob. 59PCh. 16 - Prob. 60PCh. 16 - Direct Materials Information about direct...Ch. 16 - Prob. 62PCh. 16 - Prob. 63PCh. 16 - Prob. 64PCh. 16 - Overhead Cost and Variance Relationships...Ch. 16 - Prob. 66PCh. 16 - Prob. 67PCh. 16 - Ethics and Standard Costs Farmer Franks produces...Ch. 16 - Comprehensive Variance Problem The standard cost...Ch. 16 - Prob. 70PCh. 16 - Find Actual and Budget Amounts from Variances JW...Ch. 16 - Variance Computations with Missing Data The...Ch. 16 - Comprehensive Variance Problem Sweetwater Company...Ch. 16 - Prob. 74PCh. 16 - Prob. 75PCh. 16 - Keewee Company manufactures a single product for...
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- What are some possible reasons for a material price variance? A. substandard material B. labor rate increases C. labor rate decreases D. labor efficiencyarrow_forwardThe budget variance for variable production costs is broken down into quantity and price variances. Explain why the quantity variance is more useful for control purposes than the price variance.arrow_forwardWhat is the cause of an unfavorable volume variance? Does the volume variance convey any meaningful information to managers?arrow_forward
- When is the labor rate variance unfavorable? A. when the actual quantity used is greater than the standard quantity B. when the actual quantity used is less than the standard quantity C. when the actual price paid is greater than the standard price D. when the actual price is less than the standard pricearrow_forwardThe revenue and spending variances are the differences between the flexible budget and the actual results for the period. True Falsearrow_forwardWhich of the following is true? Multiple Choice If a company has an unfavorable spending variance, it must have an unfavorable price variance. If a company has a favorable spending variance, it may have a favorable or unfavorable rate variance. If a company has a favorable quantity variance, it will have a favorable price variance. If a company has an unfavorable efficiency variance, it spent more per labor hour than budgeted.arrow_forward
- TRUE OR FALSE When actual production volume is less than expected volume, the production volume variance is unfavorablearrow_forwardThe Production Budget depends upon information provided by the Revenues Budget. TRUE FALSEarrow_forwardWhich of the following statements is false? Standard costs (e.g., how much should be paid for each unit of input) are benchmarks for measuring performance. Managers should investigate only unfavorable variances. Variance analysis enhances responsibility accounting. A variance is the difference between the budgeted amount and actual amount.arrow_forward
- Management Accounting Question (Qualitative Short Answer) a. Why is the sales forecast the starting point in budgeting? b. What is a perpetual budget? c. Which is a better basis for evaluating actual results: budgeted performance or past performance? Why? d. The materials price variance can be computed at what two different points in time? Which point is better and why? e. What effect, if any, would you expect purchasing poor-quality materials to have on direct labor variances? f. Distinguish between ideal and practical standards. g. Costs associated with the quality of conformance can be broken down into four broad groups. What are these four groups and how do they differ? h. What is likely the most effective way to reduce a company's total quality costs? i. What are the three main uses of quality cost reports?arrow_forwardSales volume variances are attributable to differences between planned and actual activity volumes, as well as differences in selling price. True or Falsearrow_forwardWhich of the following statements is incorrect? a. Sales volume variance is the amount by which sales would have varied from the base sales if only the sales volume had changed. b. Sales price variance measures the impact on the firm’s gross profit of changes in the unit selling price. c. Cost volume variance is the amount by which cost of sales would have varied from the base cost of sales if only the units produced had changed. d. Cost price variance measures the impact on the firm’s gross profit of changes in the unit cost price or cost of sales.arrow_forward
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What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY