Accounting Chapter 16 A flexible budget adjusts the static budget to reflect 

subject Type Homework Help
subject Pages 14
subject Words 2737
subject Authors Michael Maher, Shannon Anderson, William Lanen

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Chapter 16 Fundamentals of Variance Analysis Answer Key
True / False Questions
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Multiple Choice Questions
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Which of the following statements regarding variances is(are) false?
(A) In general and holding all other things constant, an unfavorable variance decreases
operating profits.
(B) A favorable variance is not always good, and an unfavorable variance is not always
bad.
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When a manager is concerned with monitoring total cost, total revenue, and net profit
conditioned upon the level of productivity, an accountant should normally recommend:
(CPA adapted)
Flexible Budgeting
Standard Costing
A.
Yes
Yes
B.
Yes
No
C.
No
Yes
D.
No
No
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33.
Based on past experience, Moss Company has developed the following budget formula for
estimating its shipping expenses. The company's shipments average 12 lbs. per shipment:
Shipping costs = $16,000 + ($0.50 × lbs. shipped).
The planned activity and actual activity regarding orders and shipments for the current
month are given in the following schedule:
Plan
Actual
Sales orders
800
780
Shipments
800
820
Units shipped
8,000
9,000
Sales
$120,000
$144,000
Total pounds shipped
9,600
12,300
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