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Cost Accounting 101 Practice Test: Flexible Budgets, Direct-Cost Variances, and Management Control
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Management control is the process of ensuring that resources are used efficiently and effectively to achieve an organization's goals. It involves overseeing operations and comparing output to projected output.  Here's some information about flexible budgets and direct-cost variances: Flexible budgets: A flexible budget is a financial plan that adjusts to changes in revenue, expenses, or production levels. It's also known as a variance budget.  To create a flexible budget, you can: Identify fixed costs Identify variable costs Gather actual numbers Create a flexible budget Direct-cost... Show more
Cost Accounting 101 Practice Test: Flexible Budgets, Direct-Cost Variances, and Management Control
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25 Questions

1. If a sales-volume variance was caused by poor-quality products, then the ________ would be in the best position to explain the variance.
2. Variances often affect each other.
3. The goal of variance analysis is for managers to understand why variances arise, to learn, and to improve future performance.
4. Unfavorable direct material price variances are:
5. One advantage of using standard times to develop a budget is they are simple to compile, are based solely on the past actual history, and do NOT require expected future changes to be taken into account.
6. Nonfinancial performance measures:
7. Typically, managers have the LEAST control over:
8. The best label for the formula (AP - BP) AQ is the:
9. Managers generally have more control over price variances than efficiency variances.
10. A standard is attainable through efficient operations but allows for normal disruptions such as machine breakdowns and defective production.
11. The flexible-budget variance may be the result of inaccurate forecasting of units sold.
12. The static-budget variance can be subdivided into the flexible-budget variance and the sales-volume variance.
13. From the perspective of control, the direct materials price variance should be isolated at the time of purchase.
14. The relative amount of inputs used to achieve a given output level is known as
15. What are the actual variable costs (C)?
16. Variance analysis should be used:
17. The term budget indicates:
18. Although computed separately, price variances and efficiency variances should NOT be analyzed separately from each other.
19. Variances should be investigated:
20. A flexible budget is calculated at the end of the budget period.
21. If budgets contain slack, cost variances will tend to be favorable.
22. The direct manufacturing labor price variance is likely to be unfavorable if lower-skilled workers are put on a job.
23. A single variance:
24. The master budget is:
25. The variance that is best for measuring operating performance is the:

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