cost exam 3

Standards are estimates based upon

Current conditions

Price/ Rate Variance

(Actual Price − Standard/Budgeted Price) × Actual Quantity

Quantity/ Efficiency Variance

(Actual Quantity − Standard/Budgeted Quantity) × Standard/Budgeted Price

Predetermined OH Rate

Estimated OH / Estimated Activity

Sales Activity Variance

(Actual units - budgeted units) × budgeted CM

sales price variance

(actual price - budgeted price) × actual units

who establishes organizational goals

top management

a master budget

indicates sales, production, and costs of the organization for the coming year

Which of the following is not a component of an overall organization plan for an organization?

Profit plans of competitors

in developing a master budget for a manufacturing company which budget should be done first

Sales budget

The forecasting method in which the individual forecasts of group members are submitted anonymously and evaluated by the group as a whole is called

Delphi Technique

The statistical method of forecasting that relies heavily on regression models is called

econometric models

which budget is not required in a service organization

Cost of Goods Sold

the number of units required for production is equal to

budgeted sales + units end inv - units beg inv

which step would not help employees accept a new and big change

implementing the change quickly

which of the following about variances is false

favorable variances are always good

the basic difference between a master and flexible budget it

master budget is based on one specific level of production and a flexible budget can be prepared for any production level within a relevant range

the slope of the flexible budget line is

variable cost per unit

the intercept of the flexible budget line is

fixed costs

in the general model, a price variance is calculated by

(AP × SQ) - (SP × AQ)