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51) A budget based on several different levels of activity, often including both a best-case and
worst-case scenario, is called a:
A) Rolling budget.
B) Merchandise purchases budget.
C) Fixed budget.
D) Production budget.
E) Flexible budget.
52) Static budget is another name for:
A) Variable budget.
B) Master budget.
C) Flexible budget.
D) Standard budget.
E) Fixed budget.
53) Variable budget is another name for:
A) Manufacturing budget.
B) Flexible budget.
C) Rolling budget.
D) Fixed budget.
E) Cash budget.
54) Identify the situation below that will result in a favorable variance.
A) Actual costs are higher than budgeted costs.
B) Actual income is lower than expected income.
C) Actual revenue is higher than budgeted revenue.
D) Actual expenses are higher than budgeted expenses.
E) Actual revenue is lower than budgeted revenue.
55) A flexible budget performance report compares the differences between:
A) Budgeted performance over several periods.
B) Actual performance over several periods.
C) Actual performance and standard costs at the budgeted sales volume.
D) Actual performance and budgeted performance based on actual sales volume.
E) Actual performance and budgeted performance based on budgeted sales volume.
56) Sales variance analysis is used by managers for:
A) Budgeting purposes only.
B) Planning and control purposes.
C) Planning and budgeting purposes.
D) Planning purposes only.
E) Control purposes only.
57) An internal report that helps management analyze the difference between actual performance and
budgeted performance based on the actual sales volume (or other level of activity) is called a(n):
A) Static budget performance report.
B) Master budget performance report.
C) Flexible budget performance report.
D) Sales budget performance report.
E) Operating budget performance report.
58) A flexible budget may be prepared:
A) Only when the company encounters excessive costs.
B) At any time in the planning period.
C) During the operating period only.
D) Before the operating period only.
E) After the operating period only.
59) A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs,
$18,000; and fixed costs, $16,000. The sales expected if the company produces and sells 16,000
units is:
A) $24,000. B) $18,000. C) $48,000. D) $40,000. E) $64,000.
60) A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs,
$18,000; and fixed costs, $16,000. The variable costs expected if the company produces and sells
16,000 units is:
A) $64,000. B) $48,000. C) $40,000. D) $24,000. E) $18,000.
61) A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs,
$18,000; and fixed costs, $16,000. The contribution margin expected if the company produces and
sells 16,000 units is:
A) $18,000. B) $64,000. C) $48,000. D) $40,000. E) $24,000.
62) A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs,
$18,000; and fixed costs, $16,000. The fixed costs expected if the company produces and sells
16,000 units is:
A) $64,000. B) $16,000. C) $18,000. D) $24,000. E) $48,000.
63) A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs,
$18,000; and fixed costs, $16,000. The operating income expected if the company produces and
sells 16,000 units is:
A) $ 2,667. B) $18,667. C) $14,000. D) $24,000. E) $35,000.
64) A company's flexible budget for 12,000 units of production showed total contribution margin of
$24,000 and fixed costs, $16,000. The operating income expected if the company produces and
sells 15,000 units is:
A) $10,000. B) $18,667. C) $14,000. D) $34,000. E) $8,000.
65) A company's flexible budget for 12,000 units of production showed per unit contribution margin of
$3.00 and fixed costs, $20,000. The operating income expected if the company produces and sells
18,000 units is:
A) $10,000. B) $34,000. C) $18,667. D) $24,000. E) $16,000.
66) Based on predicted production of 12,000 units, a company anticipates $150,000 of fixed costs and
$123,000 of variable costs. The flexible budget amounts of fixed and variable costs for 10,000
units are:
A) $125,000 fixed and $123,000 variable.
B) $102,500 fixed and $150,000 variable.
C) $125,000 fixed and $102,500 variable.
D) $150,000 fixed and $123,000 variable.
E) $150,000 fixed and $102,500 variable.
67) Product A has a sales price of $10 per unit. Based on a 10,000-unit production level, the variable
costs are $6 per unit and the fixed costs are $3 per unit. Using a flexible budget for 12,500 units,
what is the budgeted operating income from Product A?
A) $35,000. B) $30,000. C) $25,000. D) $12,500. E) $20,000.
68) A company's flexible budget for 10,000 units of production reflects sales of $200,000; variable
costs of $40,000; and fixed costs of $75,000. Calculate the expected level of operating income if
the company produces and sells 13,000 units.
A) $133,000. B) $110,500. C) $50,500. D) $85,000. E) $100,000.
69) Based on a predicted level of production and sales of 12,000 units, a company anticipates reporting
operating income of $26,000 after deducting variable costs of $72,000 and fixed costs of $10,000.
Based on this information, the budgeted amounts of fixed and variable costs for 15,000 units would
be:
A) $12,500 of fixed costs and $90,000 of variable costs.
B) $10,000 of fixed costs and $72,000 of variable costs.
C) $10,000 of fixed costs and $81,000 of variable costs.
D) $10,000 of fixed costs and $90,000 of variable costs.
E) $12,500 of fixed costs and $72,000 of variable costs.
70) Based on a predicted level of production and sales of 22,000 units, a company anticipates total
variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based on this
information, the budgeted amount of sales for 20,000 units would be:
A) $181,500. B) $117,272. C) $165,000. D) $141,900. E) $150,000.
71) Based on a predicted level of production and sales of 22,000 units, a company anticipates total
variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based on this
information, the budgeted amount of variable costs for 20,000 units would be:
A) $99,000. B) $30,000. C) $90,000. D) $150,000. E) $66,000.
72) Based on a predicted level of production and sales of 22,000 units, a company anticipates total
variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based on this
information, the budgeted amount of contribution margin for 20,000 units would be:
A) $99,000. B) $60,000. C) $90,000. D) $66,000. E) $150,000.
73) Based on a predicted level of production and sales of 22,000 units, a company anticipates total
variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based on this
information, the budgeted amount of fixed costs for 20,000 units would be:
A) $90,000. B) $30,000. C) $99,000. D) $150,000. E) $66,000.
74) Based on a predicted level of production and sales of 22,000 units, a company anticipates total
variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based on this
information, the budgeted amount of operating income for 20,000 units would be:
A) $32,727. B) $30,000. C) $150,000. D) $69,000. E) $60,000.
