6 a favorable variance occurs on a performance report when a the actual cost is grea 4308738

6) A favorable variance occurs on a performance report when ________.

A) the actual cost is greater than the budgeted cost

B) the actual revenue is less than the budgeted revenue

C) the actual profit is less than the budgeted profit

D) the actual profit is greater than the budgeted profit

7) Who is the primary user of performance reports used to plan and control operations?

A) management accountants

B) CPAs

C) operating managers

D) chartered accountants

8) When designing an accounting information system for management, which governmental regulations are NOT important?

A) Sarbanes-Oxley Act

B) Foreign Corrupt Practices Act

C) Tax rules promulgated by Internal Revenue Service

D) Six Sigma Act

9) What types of variances should be investigated when looking at performance reports?

A) all variances

B) only favorable and unfavorable variances that are large in size

C) only unfavorable variances that are large in size

D) only favorable variances that are large in size

10) A budget ________.

A) is a quantitative expression of a plan of action

B) provides feedback by comparing actual results with planned results

C) includes deviations from planned results

D) ignores areas that are presumed to be running smoothly

11) Management-by-exception means that managers should ________.

A) concentrate on areas that deviate from the plan

B) in the absence of other evidence, presume that areas that conform with plans are running smoothly

C) A and B

D) none of the above

12) The Helium Company held a Christmas party. The company expected attendance of 100 people and prepared the following budget:

Hotel room rental$500

Food500

Entertainment800

Decorations300

Total Costs$2,100

Hotel room rental$575

Food640

Entertainment750

Decorations350

Total Costs$2,315

What is the variance for total costs?

A) $215 Unfavorable

B) $215 Favorable

C) $25 Favorable

D) $140 Unfavorable

13) The Hermanski Company held a Christmas party. The company expected attendance of 100 people and prepared the following budget:

Hotel room rental$600

Food500

Entertainment800

Decorations300

Total Costs$2,200

One hundred people attended the party. The costs incurred were:

Hotel room rental$575

Food640

Entertainment750

Decorations350

Total Costs$2,315

What is the primary reason for the variance in total costs?

A) Hotel room rent cost more than expected.

B) Food cost more than expected.

C) Entertainment cost more than expected.

D) Decorations cost less than expected.

14) USA Bank held a party. USA Bank expected attendance of 100 people and prepared the following budget:

Hotel room rental$600

Food500

Entertainment800

Decorations300

Total Costs$2,200

One hundred people attended the party. The following costs were incurred:

Hotel room rental$575

Food640

Entertainment750

Decorations350

Total Costs$2,315

What is the variance for the cost of food?

A) $115 Unfavorable

B) $140 Favorable

C) $115 Favorable

D) $140 Unfavorable

15) A fraternity held a party. The fraternity prepared the following budget for 25 expected attendees:

Room rental$150

Food250

Entertainment150

Decorations75

Total Costs$625

Twenty-five people attended the party. The following costs were incurred:

Room rental$240

Food320

Entertainment125

Decorations75

Total Costs$760

What is the variance for total costs?

A) $90 Unfavorable

B) $135 Unfavorable

C) $135 Favorable

D) $70 Unfavorable

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