Direct Cost Variances and Management Control

1.Within the hierarchy of costing and budgeting, which of the following represents a product sustaining cost?

Cost associated with the product's initial launchExpenses related to marketing specific production batchesCosts incurred for promoting the product overallExpenses involved in designing the product

2.Given that the actual cost of a material is $700 while the planned cost was $900, what type of variance is observed?

3.Given that the actual outcome is $65,000 and the static budget variance amounts to $35,000, what is the value of the static budget?

4.What term is used to describe the anticipated performance of a company?

5.Given that the actual labor cost is $1200 while the planned labor cost is $1000, what is the nature of the labor price variance?

6.In management control, what serves as the benchmark for evaluating actual performance?

targeted performanceproduct performancelogistics performanceanticipated performance

7.Given that the actual cost incurred is $265,000 and the flexible budget cost is $156,000, what is the flexible budget variance?

$409,000$109,000$209,000$309,000

8.What is another term for an unfavorable variance in a static budget?

9.Given a budgeted input cost of $80 and a price variance of $40, what is the actual input price?

10.Given a static budget variance of $46,000 and a static budget value of $15,000, what is the actual amount recorded?

11.What is the term used for the price variance related to direct manufacturing labor?

12.Given an actual operating income of $250,000 and a static budget amount of $150,000, what is the static budget variance?

13.Given an actual outcome of $50,000 and a static budget variance of $25,000, what is the value of the static budget?

$75,000$25,000$35,000$45,000

14.What is the term for the difference between the actual budget figures and those in the static budget?

15.To determine ___________, the efficiency variance is deducted from the actual quantity of input used.

the actual number of units producedthe planned number of units producedthe forecasted units soldthe planned input quantity

16.To determine the flexible budget cost, which value is deducted from the actual cost?

flexible budget costflexible investment expensestatic budget expensefixed variable expense

17.What term describes the amount of input utilized to produce a specific quantity of output?

efficiencyeffectivenessgrowth assessmentperformance appraisal

18.What term describes the intersection where management planning and control activities converge?

19.What do you get when you subtract the static budget figure from the actual outcome?

static budget revenuestatic budget differencestatic budget variancecombined budget variance

20.Given a budgeted input price of $70, an actual input quantity of 250 units, and a permitted budgeted input quantity of 90 units, what is the efficiency variance?

$23,800$11,200$12,200$13,200