Reference no: EM132516971

Question 1: Which of the following statements about flexible budgets is NOT true?

A. The flexible budget variance is the difference between the flexible budget amount and the actual amount.

B. Flexible budgets are mainly used for variance evaluation, while static budgets are more widely used for planning.

C. Managers use flexible budgets for planning revenues and expenses at difference sales volumes.

D. Sometimes its valuable for managers to see a graph of the flexible budget costs.

E. Companies can use flexible budgets at the end of the accounting period to evaluate financial performance.

Question 2: Which of the following is not a benefit of using standard costs?

A. Standard costs are valuable as benchmarks in control systems.

B. Standard costs allow managers to better negotiate input prices.

C. Quantity and price standards help to predict costs and evaluate variances.

D. Flexible budget values are based upon standard costs.

E. All of the above are true benefits of using standard costs.

Question 3: Brickell Corp. produces men's hair products. The company is reviewing the direct materials price and quantity variances for its pomade product for the last month. They find an error in their calculations because the quantity of raw materials they purchased was not completely used in their production process. What effect would an ending raw materials balance have on materials price or quantity variances?

A. Direct materials price variance would appear greater than it actually is.

B. Direct materials quantity variance would appear greater than it actually is.

C. Direct materials quantity variance would appear lower than it actually is.

D. Both materials variances will be incorrect, we cannot predict whether they will appear higher or lower than they actually are.

E. Direct materials price variance would appear lower than it actually is.