Quattro began operations in April of this year.

It makes all sales on account, subject to the following

collection pattern: 30% are collected in the month of sale; 60% are collected in the first month after sale;
and 10% are collected in the second month after sale. If sales for April, May, and June were $60,000,
$80,000, and $70,000, respectively, what were the firm's budgeted collections for April?

d. $18,000.

Variances are computed by taking the difference between the product cost and standard cost.

False

If the head of a hotel's food and beverage operation is held accountable for revenues and costs, the
food and beverage operation would be considered a(n):

b. profit center.

Normal defect rates in an assembly process would be considered if a company desires to establish a
series of practical manufacturing standards.

True

Denver Enterprises recently used 14,000 labor hours to produce 7,500 completed units. According to
manufacturing specifications, each unit is anticipated to take two hours to complete. The company's
actual payroll cost amounted to $158,200. If the standard labor cost per hour is $11, Denver's labor
efficiency variance is:

b. $11,000Favorable

Note: LABOR EFFICIENCY VARIANCE = Direct Labor Hours-Actual Labor Hoursx

Hourly Rate

Favorable = Standard is less than actual

A revenue center manager

b. may be involved with the sale of new marketing programs to clients.

Gingham's expected cash balance at the end of January is:

a. $94,160

Brooke-lyn makes all purchases on account, subject to the following payment pattern:

Paid in the month of purchase: 30%

Paid in the first month following purchase: 65%

Paid in the second month following purchase: 5%

If purchases for April, May, and June were $200,000, $160,000, and $250,000, respectively, what was
the firm's budgeted payables balance on June 30?

b. $183,000
A company's plan for the acquisition of long-lived assets, such as buildings and equipment, is commonly
called a:

b. a capital budget.

Taylor Enterprises purchased 56,000 pounds (cost = $420,000) of direct material to be used in the
manufacture of the company's sole product. According the production specifications, each completed
unit requires five pounds of direct material at a standard cost of $7.80 per pound. Direct materials
consumed by the end of the period totaled 53,500 pounds in the manufacture of 10,900 finished units.
An examination of Taylor's payroll records revealed that the company worked 22,000 labor hours (cost =
$319,000) during the period, and specifications called for each completed unit requiring two hours of
labor at a standard cost of $14.80 per hour. Assume that the company computes variances at the
earliest point in time. Taylor's direct-material price variance was:

d. $16,800Favorable

Performance reports help managers use management by exception and effectively control operations.

True

Gingham's budgeted cash receipts in February are:

a. $114,000

Gingham's expected cash balance at the end of February is:

a. $113,300

In addition, Northcutt produces 5,000 units a month of its standard product. It takes two direct labor
hours to produce each standard unit and 2.25 direct labor hours to produce each deluxe unit.
Northwest's cost per labor hour is $15. Direct labor cost for the quarter would be budgeted at:

c. $553,950.

A standard cost:

a. is a budget for the production of one unit of a product or service.

A company's plan for the issuance of stock or incurrence of debt is commonly called a:

a. a financial budget.

The following selected data pertain to Phineus Corporation

July's cash disbursements are expected to be:

b. $674,000.

Flexible budgets reflect a company's anticipated costs based on variations in activity levels.
True

Verna's makes all sales on account, subject to the following collection pattern: 20% are collected in the
month of sale; 70% are collected in the first month after sale; and 10% are collected in the second
month after sale. If sales for October, November, and December were $70,000, $60,000, and $50,000,
respectively, what was the budgeted receivables balance on December 31?

d. $46,000.

The typical balanced scorecard is best described as containing both financial and nonfinancial
performance measures.

True

Efficient or inefficient use of a specific component of variable overhead (e.g., electricity) will cause the
variable-overhead efficiency variance?

True

The comprehensive set of budgets that serves as a company's overall financial plan is commonly known
as:

a. a master budget.

A flexible budget for 15,000 hours revealed variable manufacturing overhead of $90,000 and fixed
manufacturing overhead of $120,000. The budget for 25,000 hours would reveal total overhead costs of
$210,000.

False

Higgins Corporation is in the process of overhauling the performance evaluation system for its Los
Angeles manufacturing division, which produces and sells parts that are popular in the aerospace
industry. Which of the following is least likely to be chosen to evaluate the overall operations of the Los
Angeles division?

d. Cost center.

If purchases for January, February, and March were $200,000, $180,000, and $230,000, respectively,
what were the firm's budgeted payments in March?

a. $197,000

Variances are computed by taking the difference between which of the following?

b. Actual cost and standard cost.

Newbill Enterprises recently used 24,000 labor hours to produce 8,600 completed units. According to
manufacturing specifications, each unit is anticipated to take 2.75 hours to complete. The company's
actual payroll cost amounted to $456,000. If the standard labor cost per hour is $19.20, Newhart's labor
rate variance is:

c. $4,800Favorable
The Telemarketing Department of a residential remodeling company would most likely be evaluated as
a:

b. revenue center.

Referring to the preceding problem, Taylor's direct-material quantity variance was:

d. $7,800Favorable

A company's sales forecast would likely not consider general economic and industry trends.

False