QUESTION 1 Which one of these statements is FALSE about variance analysis? O In variance analysis, the budgeted (expected) value established at the beginning of the budget period. variance analysis of monthly and quarterly budgets should lead to operational changes that will help the organization meet annu short-term performance lags behind expectations. Variance analysis helps managers identify the factors that cause actual profits to be different from those expected O The primary goal of variance analysis is to assign blame for unfavorable results QUESTION 2 Which of these duties might a financial manager in a healthcare organization be responsible for? O Prepare a year to date trial balance report for the annual tax filing O Complete a medical supply inventory and submit it to the purchasing department Submitting invoicing to an insurance company for payment O Conduct data analysis to report to the board of directors on new revenue sources

QUESTION 1 Which one of these statements is FALSE about variance analysis? O In variance analysis, the budgeted (expected) value established at the beginning of the budget period. variance analysis of monthly and quarterly budgets should lead to operational changes that will help the organization meet annu short-term performance lags behind expectations. Variance analysis helps managers identify the factors that cause actual profits to be different from those expected O The primary goal of variance analysis is to assign blame for unfavorable results QUESTION 2 Which of these duties might a financial manager in a healthcare organization be responsible for? O Prepare a year to date trial balance report for the annual tax filing O Complete a medical supply inventory and submit it to the purchasing department Submitting invoicing to an insurance company for payment O Conduct data analysis to report to the board of directors on new revenue sources

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 20Q: In comparing actual sales revenue to flexible budget sales revenue, would it be possible to have a...

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In comparing actual sales revenue to flexible budget sales revenue, would it be possible to have a favorable variance and still not have met revenue expectations?
Management Accounting Question (Qualitative Short Answer) a. Why is the sales forecast the starting point in budgeting? b. What is a perpetual budget? c. Which is a better basis for evaluating actual results: budgeted performance or past performance? Why? d. The materials price variance can be computed at what two different points in time? Which point is better and why? e. What effect, if any, would you expect purchasing poor-quality materials to have on direct labor variances? f. Distinguish between ideal and practical standards. g. Costs associated with the quality of conformance can be broken down into four broad groups. What are these four groups and how do they differ? h. What is likely the most effective way to reduce a company's total quality costs? i. What are the three main uses of quality cost reports?
Which statement is true? A. Gross profit (GP) variance analysis, is an essential part of financial statements analysis that is used to evaluate the performance of a firm's departments responsible for the firm's line activities (functions). B. Increases and decreases in sales and cost of sales have direct relationship with increases and decreases in GP. C. If there is a negative sales price variance and there is no cost variance, the gross profit variance will be equal to the sales price variance. D. A zero cost variance indicates that there is no difference between the standard cost prices and actual cost prices. E. none of the above
Which of the following statements is false? Standard costs (e.g., how much should be paid for each unit of input) are benchmarks for measuring performance. Managers should investigate only unfavorable variances. Variance analysis enhances responsibility accounting. A variance is the difference between the budgeted amount and actual amount.
When actual performance varies from the budgeted performance, managers will be morea. likely revise future budgets if the variances wereb. controllable rather than uncontrollable.c. uncontrollable rather than controllable.d. favorable rather than unfavorable.e. small.
Which of the following about gross profit variance analysis is most correct? a. Results of the gross variance analysis should be published at least annually to improve the company’s transparency. b. All of the choices are correct. c. Gross profit variance analysis is a management tool used to track gross profit and improve its performance and profitability in the future. d. A zero-gross profit variance absolutely indicates that the company is able to sell its products at the same price and at the same volume as budgeted or as previous year’s.
Which of the following is/are true statements: A) Revenue sources for non for profit organizations may consist of both fixed and variable elements. B) A performance report prepared for cost centers will not contain revenue or net operating income variances. C) A spending variance is the difference between the standard quantity allowed for actual input at a standard price and the actual quantity of input at the actual price. D) Performing a variance analysis on a periodic basis is an example of a proactive vs. reactive posture being taken by management in analyzing costs. All statements are true OB, C and D OA, B and C O A, B and D
Considering the variance analysis, which of the following statements is true? a. When there is favourable variance the actual profit is higher than the budgeted profit (lower costs than budgeted or higher income than budgeted.. b. When there is favourable variance the actual profit is lower than the budgeted profit (higher costs than budgeted or higher income than budgeted. c. None of the answers provided are true d. When there is adverse variance the actual profit is lower budgeted profit (lower costs than budgeted or lower income than budgeted. e. When there is adverse variance the actual profit is higher budgeted profit (higher costs than budgeted or lower income than budgeted.
The differences between actual and budgeted figures are known as type your answer... 2 Which of the following is true about unfavorable variances? Managers generally investigate only unfavorable variances as part of "management by exception." Unfavorable variances will always be negative numbers when subtracting actual figures minus budgeted figures. O Unfavorable variances should always be interpreted as “bad news" for the company. Unfavorable variances are variances that cause operating income to be lower than budgeted.
Considering the variance analysis, which of the following statements is true? O a. When there is adverse variance the actual profit is lower budgeted profit (lower costs than budgeted or lower income than budgeted. O b. When there is adverse variance the actual profit is higher budgeted profit (higher costs than budgeted or lower income than budgeted. O c. When there is favourable variance the actual profit is higher than the budgeted profit (lower costs than budgeted or higher income than budgeted.. O d. When there is favourable variance the actual profit is lower than the budgeted profit (higher costs than budgeted or higher income than budgeted. O e. None of the answers provided are true
Which of the following underlying assumptions form(s) the basis for grossprofit variance analysis? A. Sales and costs behave in a linear manner.B. Costs can be categorized as variable.C. All of the choices are assumptions that underlie gross profit variance analysis.D. In multiproduct organizations, the sales mix remains discretionary.
budget performance is abetter critical than past performance for judging managers" do you agree ?explain