Q. A company budgeted $200,000 for production costs but incurred $220,000. What is the variance?
-
A.
$20,000 Favorable
-
B.
$20,000 Unfavorable
-
C.
$200,000 Favorable
-
D.
$200,000 Unfavorable
Solution
Variance = Actual Costs - Budgeted Costs = $220,000 - $200,000 = $20,000 Unfavorable.
Correct Answer:
B
— $20,000 Unfavorable
Learn More →
Q. If a company has a budgeted cost of $100,000 and an actual cost of $90,000, what is the cost variance?
-
A.
$10,000 Favorable
-
B.
$10,000 Unfavorable
-
C.
$90,000 Favorable
-
D.
$90,000 Unfavorable
Solution
Cost Variance = Actual Cost - Budgeted Cost = $90,000 - $100,000 = $10,000 Favorable.
Correct Answer:
A
— $10,000 Favorable
Learn More →
Q. If a company has a contribution margin of $30 per unit and fixed costs of $150,000, how many units must it sell to break even?
-
A.
5,000 units
-
B.
10,000 units
-
C.
15,000 units
-
D.
20,000 units
Solution
Break-even point (units) = Fixed Costs / Contribution Margin = $150,000 / $30 = 5,000 units.
Correct Answer:
B
— 10,000 units
Learn More →
Q. If a company has a flexible budget for 10,000 units at $5 per unit, what is the total budgeted revenue?
-
A.
$50,000
-
B.
$100,000
-
C.
$25,000
-
D.
$75,000
Solution
Total budgeted revenue = 10,000 units * $5/unit = $50,000.
Correct Answer:
A
— $50,000
Learn More →
Q. If the budgeted cost for direct materials is $50,000 and the actual cost is $55,000, what is the direct materials price variance?
-
A.
$5,000 Favorable
-
B.
$5,000 Unfavorable
-
C.
$10,000 Favorable
-
D.
$10,000 Unfavorable
Solution
Direct materials price variance = Actual Cost - Budgeted Cost = $55,000 - $50,000 = $5,000 Unfavorable.
Correct Answer:
B
— $5,000 Unfavorable
Learn More →
Q. In a variance analysis, what is the formula for calculating the sales volume variance?
-
A.
(Actual Sales - Budgeted Sales) * Budgeted Price
-
B.
(Budgeted Sales - Actual Sales) * Actual Price
-
C.
(Actual Sales - Budgeted Sales) * Actual Price
-
D.
(Budgeted Sales - Actual Sales) * Budgeted Price
Solution
Sales volume variance = (Actual Sales - Budgeted Sales) * Budgeted Price.
Correct Answer:
A
— (Actual Sales - Budgeted Sales) * Budgeted Price
Learn More →
Q. In variance analysis, what does a negative variance indicate?
-
A.
Better performance than expected
-
B.
Worse performance than expected
-
C.
No variance
-
D.
Increased sales
Solution
A negative variance indicates worse performance than expected, meaning actual results fell short of budgeted expectations.
Correct Answer:
B
— Worse performance than expected
Learn More →
Q. What is the formula for calculating the variance in a flexible budget?
-
A.
Actual Costs - Flexible Budget Costs
-
B.
Flexible Budget Costs - Actual Costs
-
C.
Budgeted Costs - Actual Costs
-
D.
Actual Revenue - Budgeted Revenue
Solution
Variance in a flexible budget is calculated as Actual Costs - Flexible Budget Costs.
Correct Answer:
A
— Actual Costs - Flexible Budget Costs
Learn More →
Q. What is the main focus of marginal costing?
-
A.
Total costs
-
B.
Variable costs
-
C.
Fixed costs
-
D.
Sunk costs
Solution
Marginal costing focuses on variable costs, which are costs that change with the level of production.
Correct Answer:
B
— Variable costs
Learn More →
Q. What is the primary difference between fixed and variable budgets?
-
A.
Fixed budgets change with activity levels, variable budgets do not
-
B.
Variable budgets change with activity levels, fixed budgets do not
-
C.
Both budgets are the same
-
D.
Fixed budgets are more accurate than variable budgets
Solution
Variable budgets change with activity levels, while fixed budgets remain constant regardless of activity levels.
Correct Answer:
B
— Variable budgets change with activity levels, fixed budgets do not
Learn More →
Q. Which of the following is NOT a benefit of budgeting?
-
A.
Improved financial control
-
B.
Enhanced communication
-
C.
Increased employee morale
-
D.
Guaranteed profit
Solution
Budgeting does not guarantee profit; it helps in planning and controlling costs but does not ensure financial success.
Correct Answer:
D
— Guaranteed profit
Learn More →
Showing 1 to 11 of 11 (1 Pages)
