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11) Both the sales volume variance and the flexible budget variance help revenue center managers understand why they have exceeded or fallen short of budgeted revenue.

12) Milliken Inc. provides the following information:

Actual Sales

Static Budget

Flexible Budget

Sales Volume Variance

Sale Revenue

$556,500

$525,000

$450,000

?

Calculate the sales volume variance.

A) $31,500 F

B) $31,500 U

C) $75,000 U

D) $106,500 F

13) Johnson Construction Materials Company has a sales office which sells concrete culvert pipes to property developers. The sales office is a revenue center and must prepare a monthly performance report. It has provided the following information.

What is the flexible budget variance for the 40 inch pipe?

A) $1,850 U

B) $3,000 F

C) $10,000 U

D) $1,500 F

14) Johnson Construction Materials Company has a sales office which sells concrete culvert pipes to property developers. The sales office is a revenue center and must prepare a monthly performance report. It has provided the following information.

What is the sales volume variance for the 36 inch long pipe?

A) $1,850 U

B) $9,000 F

C) $10,000 U

D) $1,500 F

15) Johnson Construction Materials Company has a sales office which sells concrete culvert pipes to property developers. The sales office is a revenue center and must prepare a monthly performance report. Below is the partially completed performance report.

The company uses management by exception to address flexible budget variances. On which product type would the company focus first?

A) 40 inch

B) 36 inch long

C) 36 inch short

D) 32 inch

 

Actual Sales Revenue

Flexible Budget Variance

U/F

Flexible Budget

40 inch

$31,500

$1,500

F

$30,000

36 inch long

$40,150

$1,850

U

$42,000

36 inch short

$36,200

$3,200

F

$33,000

32 inch

$19,000

$1,000

U

$20,000

16) Huang Consumer Products has a small car division that operates as a profit center. Below is a partially completed performance report for the first quarter.

 

How much is the percentage variance for the flexible budget variance for sales revenue?

A) 1.7 % F

B) 1.7 % U

C) 3.4 % U

D) 3.4 % F

17) Huang Consumer Products has a small car division that operates as a profit center. Below is a partially completed performance report for the first quarter.

How much is the percentage variance for the flexible budget variance for traceable fixed expenses?

A) 0.8 % F

B) 0.8 % U

C) 0.3 % U

D) 0.3 % F

18) Which of the following statements is true of performance reporting?

A) Responsibility reports should focus on the person responsible for unfavorable variances, rather than information.

B) Managers should not be held accountable for uncontrollable variances.

C) Only unfavorable variances should be explained in the reports.

D) Every variance, regardless of magnitude, must be investigated by the managers.

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Accounting 1 Month Ago 4 Views
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