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Question 1
Free
Multiple Choice

A master budget is ________ .

Choose correct answer/s
A

a budget which starts from a zero base

B

based on the level of expected output at the start of the budget period

C

developed at the end of a period

D

a type of flexible budget once actual results are known

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Question 2
Free
Multiple Choice

Management by exception is a practice whereby managers focus more closely on ________ .

Choose correct answer/s
A

variances in the larger departments

B

areas not operating as anticipated and less closely on areas that are operating as anticipated

C

activity-based budgeting

D

unfavorable variances

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Question 3
Free
Multiple Choice

A variance is ________ .

Choose correct answer/s
A

the difference between actual fixed cost per unit and standard variable cost per unit

B

the standard units of inputs for one output

C

the difference between an actual result and a budgeted performance

D

the difference between actual variable cost per unit and standard fixed cost per unit

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Question 4
Free
Multiple Choice

An unfavorable variance indicates that ________ .

Choose correct answer/s
A

the actual costs are less than the budgeted costs

B

the actual revenues exceed the budgeted revenues

C

the actual units sold are less than the budgeted units

D

the budgeted contribution margin is more than the actual amount

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Question 5
Free
Multiple Choice

A favorable variance indicates that ________ .

Choose correct answer/s
A

budgeted costs are less than actual costs

B

actual revenues exceed budgeted revenues

C

actual operating income is less than the budgeted amount

D

budgeted contribution margin is more than the actual amount

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Question 6
Multiple Choice

Lincoln Corporation used the following data to evaluate their current operating system. The company sells items for $19 each and used a budgeted selling price of $19 per unit.
image
What is the static-budget variance of revenues?

Choose correct answer/s
A
$171,000 favorable
B
$171,000 unfavorable
C
$6,000 favorable
D
$9,000 unfavorable
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Question 7
Multiple Choice

Lincoln Corporation used the following data to evaluate their current operating system. The company sells items for $18 each and used a budgeted selling price of $18 per unit.
image
What is the static-budget variance of variable costs?

Choose correct answer/s
A
$6,000 favorable
B
$11,000 unfavorable
C
$14,000 favorable
D
$5,000 unfavorable
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Question 8
Multiple Choice

Lincoln Corporation used the following data to evaluate their current operating system. The company sells items for $18 each and used a budgeted selling price of $18 per unit.
image
What is the static-budget variance of operating income?

Choose correct answer/s
A
$164,000 favorable
B
$164,000 unfavorable
C
$181,000 favorable
D
$181,000 unfavorable
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Question 9
Multiple Choice

Schooner Corporation used the following data to evaluate its current operating system. The company sells items for $23 each and used a budgeted selling price of $23 per unit.
image
What is the static-budget variance of revenues?

Choose correct answer/s
A
$368,000 favorable
B
$368,000 unfavorable
C
$16,000 favorable
D
$16,000 unfavorable
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Question 10
Multiple Choice

Schooner Corporation used the following data to evaluate its current operating system. The company sells items for $25 each and used a budgeted selling price of $25 per unit.
image
What is the static-budget variance of variable costs?

Choose correct answer/s
A
$36,000 favorable
B
$36,000 unfavorable
C
$204,000 favorable
D
$204,000 unfavorable
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Question 11
Multiple Choice

Schooner Corporation used the following data to evaluate its current operating system. The company sells items for $24 each and used a budgeted selling price of $24 per unit.
image
What is the static-budget variance of operating income?

Choose correct answer/s
A
$8,000 favorable
B
$176,000 unfavorable
C
$32,000 favorable
D
$7,000 unfavorable
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Question 12
Multiple Choice

Daniels Corporation used the following data to evaluate their current operating system. The company sells items for $19 each and had used a budgeted selling price of $20 per unit.
image
What is the static-budget variance of revenues?

Choose correct answer/s
A
$299,000 favorable
B
$260,000 favorable
C
$260,000 unfavorable
D
$299,000 unfavorable
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Question 13
Multiple Choice

Daniels Corporation used the following data to evaluate their current operating system. The company sells items for $19 each and had used a budgeted selling price of $20 per unit.
image
What is the static-budget variance of variable costs?

Choose correct answer/s
A
$116,000 favorable
B
$116,000 unfavorable
C
$103,000 favorable
D
$103,000 unfavorable
To unlock the question
Question 14
Multiple Choice

Daniels Corporation used the following data to evaluate their current operating system. The company sells items for $18 each and had used a budgeted selling price of $19 per unit.
image
What is the static-budget variance of operating income?

Choose correct answer/s
A
$325,000 favorable
B
$325,000 unfavorable
C
$316,000 favorable
D
$316,000 unfavorable
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Question 15
Multiple Choice

Johnson Company had planned for operating income of $10 million in the master budget with a contribution margin of $3 million, but actually achieved operating income of only $7 million and a contribution margin of $2.5 million.

Choose correct answer/s
A
The static-budget variance for operating income is $3 million favorable.
B
The static-budget variance for operating income is $3 million unfavorable.
C
The flexible-budget variance for operating income is $3 million favorable.
D
The flexible-budget variance for operating income is $3 million unfavorable.
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Question 16
True/False

A master budget is called a static budget because it is developed around a single planned output level.

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True
False
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Question 17
True/False

For revenue items, a favorable variance means that actual revenues are less than expected.

Choose correct answer/s
True
False
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Question 18
True/False

A variance is the difference between the actual cost for the current and expected (or budgeted) performance.

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True
False
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Question 19
True/False

A favorable expense variance results when actual costs exceed budgeted costs.

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True
False
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Question 20
True/False

Management by exception is the practice of concentrating on areas not operating as anticipated (such as a cost overrun) and placing less attention on areas operating as anticipated.

Choose correct answer/s
True
False
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