29.Without a well-conceived plan against which to compare actual performance:
A.It is difficult to determine how a company is doing.
B.It is difficult to determine what a company could do to improve.
C.A company will not be able to make a profit.
D. Both A and B.
E.A, B, and C.
30.The starting point for preparing a monthly budget is:
C.Projecting cash inflows.
D.Projecting cash outflows.
E.Projecting material needs.
31.The purpose of creating a flexible budget is to:
A.Determine how much of the difference between actual and budgeted profits was due strictly to the difference between budgeted and actual sales.
B.Determine how much of the difference between actual and budgeted profits was due strictly to the difference between budgeted and actual variable costs.
C.Determine how much of the difference between actual and budgeted profits was due strictly to the difference between budgeted and actual fixed costs.
D.Determine which department is responsible for the overall budget variance.
32.The controller for Navia, Inc. created a budget prior to the current period. At the end of the period, the controller compared the budget with the actual results. For what purpose is the controller using budgets?
33.Which of the following is not a component of the total profit variance?
A.Sales volume variance.
B.Flexible budget variance.
C.Sales price variance.
D.Market size and share variance.
E.All of the above are components of the total profit variance.
34.Which of the following statements is not true?
A.If actual sales are greater than budgeted sales, the result is a favorable variance.
B.If actual cost is greater than budgeted cost, the result is an unfavorable variance.
C.If budgeted sales are greater than actual sales, the result is an unfavorable variance.
D.If budgeted cost is greater than actual cost, the result is an unfavorable variance.
E.If actual cost is less than budgeted cost, the result is a favorable variance.
35.Given the following data, calculate total profit variance.
Master BudgetActual Results
Profit before taxes$35,000$45,000
36.The two major components of the total profit variance are:
A.Sales volume variance and flexible budget variance.
B.Price variance and quantity variance.
C.Sales volume variance and sales mix variance.
D.Flexible budget variance and quantity variance.
E.None of the above.
37.The formula for the sales volume variance is:
A.(Actual Sales Quantity – Budgeted Sales Quantity) x Actual Unit Contribution Margin
B.(Budgeted Sales Quantity – Actual Sales Quantity) x Total Profit Variance
C.Flexible Budget Profit – Master Budget Profit.
D.(Budgeted Sales Quantity – Actual Sales Quantity) ÷ Total Profit Variance
E.(Actual Sales Quantity – Budgeted Sales Quantity) ÷ Actual Unit Contribution Margin
38.If the labor efficiency variance is $1,000unfavorable, then:
A.Budgeted labor rate exceeded actual labor rate.
B.Actual labor rate exceeded budgeted labor rate.
C.Budgeted labor input exceeded actual labor input.
D.Actual labor input exceeded budgeted labor input.
E.None of the above.