The variance that is best for measuring operating performance is the:

A) static-budget variance
B) flexible-budget variance
C) sales-volume variance
D) selling-price variance

An unfavorable variance:
A) may suggest investigation is needed
B) is conclusive evidence of poor performance
C) demands that standards be recomputed
D) indicates continuous improvement is needed

The variance that LEAST affects cost control is the:

A) flexible-budget variance
B) direct-material-price variance
C) sales-volume variance
D) direct manufacturing labor efficiency variance

A flexible-budget variance is $600 favorable for unit-related costs. This indicates that
costs were:
A) $600 more than the master budget
B) $600 less than for the planned level of activity
C) $600 more than standard for the achieved level of activity
D) $600 less than standard for the achieved level of activity

JJ Abrams planned to use $164 of material per unit but actually used $160 of material per
unit, and
planned to make 1,200 units but actually made 1,000 units.
The flexible-budget amount is:
A) $160,000
B) $164,000
C) $192,000
D) $196,800

Bebee Corporation currently produces cardboard boxes in an automated process.

Expected
production per month is 40,000 units, direct-material costs are $0.60 per unit, and
manufacturing
overhead costs are $18,000 per month. Manufacturing overhead is all fixed costs. What is
the flexible
budget for 20,000 and 40,000 units, respectively?
A) $21,000; $33,000
B) $21,000; $42,000
C) $30,000; $42,000
D) None of these answers are correct.

Melville Incorporated planned to use $37.50 of material per unit but actually used $36.75
of material per
unit, and planned to make 1,800 units but actually made 1,600 units.
The flexible-budget amount is:
A) $60,000
B) $67,500
C) $59,200
D) $1,200
Answer: A