Chapter 8

Question 1

A report that summarizes the actual results, budgeted amounts, and the differences

Answer 1

Budget performance report

Question 2

Difference between actual and budget

Answer 2

variance

Question 3

The difference between actual results and the expected results in the flexible budget for the actual units sold

Answer 3

Flexible budget variance = actual results - flexible budget

Question 4

The difference between the expected results in the flexible budget for the actual units sold and the static budget

Answer 4

Sales volume variance = flexible budget - static budget

Question 5

A price, cost, or quantity that is expected under normal conditions.

Answer 5

standard

Question 6

An accounting system that uses standards for product costs, direct materials, direct labor, and MO

Answer 6

Standard Cost system

Question 7

Five benefits of standard cost system that help manangers

Answer 7

1. Prepare master budget
2. set target levels of performance for flexible budgets
3. Identify performance standards
4. set prices
5. decrease accounting cost

Question 8

Measures how well the business keeps unit costs of material and labor inputs within standards

Answer 8

cost variance
= (actual cost * actual quantity) - (standard cost * actual quantity)
= (actual cost - standard cost) * actual quantity

Question 9

Measures how well the business uses its materials or human resources

Answer 9

Efficiency variance
=(actual quantity - standard quantity allowed) * standard cost

Question 10

The difference between the amount actually paid for direct materials and what should have been paid

Answer 10

direct materials cost variance = actual (cost - standard cost) * actual quantity

Question 11

The difference between the actual direct labor cost and the standard direct labor cost

Answer 11

direct labor cost variance

Question 12

The difference between actual labor hours and the labor hours that should have been used

Answer 12

Direct labor efficiency variance = actual labor hours - standard labor hours

Question 13

measures the difference between the direct materials actually used and the direct materials that should have been used

Answer 13

Direct materials efficiency variance = (actual quantity - standard quantity) * standard cost

Question 14

The difference between the actual variable overhead and the standard variable overhead for the actual allocation base incurred

Answer 14

Variable Overhead Cost Variance = (AC-SC)*AQ

Question 15

The difference between the actual allocations base and the amount of the allocation base that should have been used

Answer 15

Variable overhead efficiency variance = (AQ-SQA)*SC

Question 16

Determines the cost associated with the difference between actual fixed overhead and budgeted fixed overhead

Answer 16

Fixed overhead cost variance = (Actual fixed overhead - budgeted fixed overhead)

Question 17

Determines the cost associated with the difference between budgeted fixed overhead and the amount of fixed overhead allocated to actual output.

Answer 17

fixed overhead volume variance = budgeted fixed overhead - allocated fixed overhead