11. Some financial variances show increases in operating income relative to a budgeted or allocated amount, and others show decreases in operating income. Respectively, these variances are
A. budgeted, standard.
B. favourable, unfavourable.
C. standard, budgeted.
D. unfavourable, favourable.
E. fixed, variable.
12. Management by exception is the practice of concentrating on
A. the master budget variances.
B. on areas where performance fails to meet expectations.
C. favourable variances.
D. unfavourable variances.
E. exceptional results.
13. General Insurance Company had a static budgeted operating income of $4.6 million; however, actual income was $3.0 million. What is the static budget variance of operating income?
A. $1,000,000 favourable
B. $1,000,000 unfavourable
C. $1,600,000 favourable
D. $3,000,000 favourable
E. $1,600,000 unfavourable
Use the information below to answer the following question(s..
Ames Golf Company used the following data to evaluate their current operating system. The company sells 1 pack of golf balls for $10 per pack. The $10 selling price is also the budgeted selling price.
|
Budgeted |
Actual |
|
|
Units Sold |
1,000,000 |
990,000 |
|
Variable Costs |
$3,000,000 |
$2,500,000 |
|
Fixed Costs |
$1,800,000 |
$1,850,000 |
14. What is the actual operating income for Ames Golf Company using the actual results?
A. <$3,360,000>
B. $4,750,000
C. $5,200,000
D. $5,550,000
E. $5,970,000
15. What is the budgeted operating income for Ames Golf Company?
A. $7,000,000
B. $5,970,000
C. $5,550,000
D. $5,200,000
E. $4,750,000
16. What is the total static budget variance for Ames Golf Company?
A. $650,000 favourable
B. $450,000 unfavourable
C. $400,000 favourable
D. $390,000 unfavourable
E. $350,000 favourable
17. A company uses a static budget approach and the previous management accountant calculated the following information: Fixed costs variance $10,000 U; revenues variance $400,000 F; contribution margin variance $60,000 F. What is the total static-budget variance?
A. $50,000 F
B. $50,000 U
C. $230,000 F
D. $230,000 U
E. $390,000 F
Answer the following question(s. using the information below.
Abernathy Corporation used the following data to evaluate their current operating system. The company sells items for $10 each and used a budgeted selling price of $10 per unit.
|
Actual |
Budgeted |
|
|
Units sold |
92,000 units |
90,000 units |
|
Variable costs |
$450,800 |
$432,000 |
|
Fixed costs |
$95,000 |
$100,000 |
18. What is the static-budget variance of revenues?
A. $20,000 favourable
B. $20,000 unfavourable
C. $2,000 favourable
D. $2,000 unfavourable
E. $25,000 unfavourable
19. What is the static-budget variance of variable costs?
A. $1,200 favourable
B. $18,800 favourable
C. $20,000 favourable
D. $1,200 unfavourable
E. $18,800 unfavourable
20. What is the static-budget variance of operating income?
A. $3,800 favourable
B. $1,200 unfavourable
C. $6,200 favourable
D. $6,200 unfavourable
E. $1,200 favourable
