Question 1
A budget should/can do all of the following except:
Become the performance standard against which firms can compare the actual results
Correct!
Be prepared by managers from different functional areas working independently of each other
Help management allocate limited resources
Be adjusted if new opportunities become available during the year.
Question 2
Which of the following statements is not true?
Budgeting is prepared in advance of the budget period.
Budgeting sets targets for future performance.
Correct!
Budgeting is done before strategy is set.
Budgeting helps to coordinate organization activities.
Question 3
In which order are the following developed?
A = Production plan B = Materials purchasing plan
C = Demand forecast D = Sales plan
First to last: D, C, B, A
Correct!
First to last: C, D, A, B
First to last: A, B, C, D
First to last: C, A, D, B
Question 4
The strategy most likely to reduce the break-even point would be to:
Increase both the capacity-related (fixed) costs and the contribution margin per unit
Decrease both the capacity-related (fixed) costs and the contribution margin per unit
Increase the capacity-related (fixed) costs and decrease the contribution margin per unit
Correct Answer
Decrease the capacity-related (fixed) costs and increase the contribution margin per unit
Question 5
P&Q Manufacturing produces a single product that sells for $16. Variable (flexible) costs per unit equal
$11.20. The company expects the total fixed (capacity-related) costs to be $7,200 for the next month at
the projected sales level of 20,000 units.
What is the current break-even point in terms of number of units for the next month?
1,500 units
2,250 units
None of the above
3,333 units
This study source was downloaded by 100000899606070 from CourseHero.com on 06-14-2025 14:40:47 GMT -05:00
https://www.coursehero.com/file/110628480/ACCT-540-QUIZ-7docx/
, Question 6
A favorable efficiency variance for direct labor indicates that:
A lower wage rate than expected was paid for direct labor
More direct labor hours were used during production than expected for actual output
A higher wage rate than expected was paid for direct labor
Correct!
Less direct labor hours were used during production than expected for actual output
Question 7
An organization planned to use $44 of material per unit of activity but it actually used $42 of material
per unit of activity, and it planned to make 1,200 units but it actually made 1,000 units.
What is the flexible budget amount for materials?
$48,000
$42,000
$44,000
$49,400
Question 8
Kenosha Industries, Inc., (KII) developed the following standard costs for direct material and direct labor
for one of their major products, the 10-gallon plastic container.
Standard Quantity Standard Price
Direct materials 0.10 pounds $30 per pound
Direct labor 0.05 hours $15 per hour
During August, KII produced and sold 10,000 containers using 980 pounds of direct materials at an
average cost per pound of $32 and 500 direct labor hours at an average wage of $15.25 per hour.
What is August's direct material price variance?
$1,360 unfavorable
None of the above
$600 favorable
$1,960 unfavorable
Question 9
Kenosha Industries, Inc., (KII) developed the following standard costs for direct material and direct labor
for one of their major products, the 10-gallon plastic container.
Standard Quantity Standard Price
This study source was downloaded by 100000899606070 from CourseHero.com on 06-14-2025 14:40:47 GMT -05:00
https://www.coursehero.com/file/110628480/ACCT-540-QUIZ-7docx/
A budget should/can do all of the following except:
Become the performance standard against which firms can compare the actual results
Correct!
Be prepared by managers from different functional areas working independently of each other
Help management allocate limited resources
Be adjusted if new opportunities become available during the year.
Question 2
Which of the following statements is not true?
Budgeting is prepared in advance of the budget period.
Budgeting sets targets for future performance.
Correct!
Budgeting is done before strategy is set.
Budgeting helps to coordinate organization activities.
Question 3
In which order are the following developed?
A = Production plan B = Materials purchasing plan
C = Demand forecast D = Sales plan
First to last: D, C, B, A
Correct!
First to last: C, D, A, B
First to last: A, B, C, D
First to last: C, A, D, B
Question 4
The strategy most likely to reduce the break-even point would be to:
Increase both the capacity-related (fixed) costs and the contribution margin per unit
Decrease both the capacity-related (fixed) costs and the contribution margin per unit
Increase the capacity-related (fixed) costs and decrease the contribution margin per unit
Correct Answer
Decrease the capacity-related (fixed) costs and increase the contribution margin per unit
Question 5
P&Q Manufacturing produces a single product that sells for $16. Variable (flexible) costs per unit equal
$11.20. The company expects the total fixed (capacity-related) costs to be $7,200 for the next month at
the projected sales level of 20,000 units.
What is the current break-even point in terms of number of units for the next month?
1,500 units
2,250 units
None of the above
3,333 units
This study source was downloaded by 100000899606070 from CourseHero.com on 06-14-2025 14:40:47 GMT -05:00
https://www.coursehero.com/file/110628480/ACCT-540-QUIZ-7docx/
, Question 6
A favorable efficiency variance for direct labor indicates that:
A lower wage rate than expected was paid for direct labor
More direct labor hours were used during production than expected for actual output
A higher wage rate than expected was paid for direct labor
Correct!
Less direct labor hours were used during production than expected for actual output
Question 7
An organization planned to use $44 of material per unit of activity but it actually used $42 of material
per unit of activity, and it planned to make 1,200 units but it actually made 1,000 units.
What is the flexible budget amount for materials?
$48,000
$42,000
$44,000
$49,400
Question 8
Kenosha Industries, Inc., (KII) developed the following standard costs for direct material and direct labor
for one of their major products, the 10-gallon plastic container.
Standard Quantity Standard Price
Direct materials 0.10 pounds $30 per pound
Direct labor 0.05 hours $15 per hour
During August, KII produced and sold 10,000 containers using 980 pounds of direct materials at an
average cost per pound of $32 and 500 direct labor hours at an average wage of $15.25 per hour.
What is August's direct material price variance?
$1,360 unfavorable
None of the above
$600 favorable
$1,960 unfavorable
Question 9
Kenosha Industries, Inc., (KII) developed the following standard costs for direct material and direct labor
for one of their major products, the 10-gallon plastic container.
Standard Quantity Standard Price
This study source was downloaded by 100000899606070 from CourseHero.com on 06-14-2025 14:40:47 GMT -05:00
https://www.coursehero.com/file/110628480/ACCT-540-QUIZ-7docx/
