Question 10 (2.5 marks):

The direct material price variance is: (a) $1,460 Favourable.

(b) $4,500 Favourable.

(c) $4,672 Favourable.

(d) None of the above.

Answer: _____________________________________________________________

Question 11 (2.5 marks):

The direct material usage variance is: (a) $2,336 Adverse.

(b) $2,044 Adverse.

(c) $1,376 Adverse.

(d) None of the above.

Answer: _____________________________________________________________

Question 12 (2.5 marks):

The direct labour wage rate variance is: (a) $3,000 Adverse.

(b) $2,628 Adverse.

(c) $584 Adverse.

(d) None of the above.

Answer: _____________________________________________________________

Question 13 (2.5 marks):

The direct labour efficiency variance is: (a) $11,160 Favourable.

(b) $9,052 Favourable.

(c) $8,760 Favourable.

(d) $11,532 Favourable.

Answer: _____________________________________________________________

Question 14 (2.5 marks):

The variable overhead expenditure variance is: (a) $2,920 Favourable.

(b) $13,140 Favourable.

(c) $15,000 Favourable.

(d) None of the above.

Answer: _____________________________________________________________

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Question 15 (2.5 marks):

The variable overhead efficiency variance is: (a) $5,580 Favourable.

(b) $4,380 Favourable.

(c) $3,720 Favourable.

(d) $2,920 Favourable.

Answer: _____________________________________________________________

Question 16 (2.5 marks):

The actual direct labour hours used of 13,140 hours include 500 hours of idle time due to equipment breakdowns and poor scheduling. The adjusted labour efficiency variance (after adjustments for idle time) is:

(a) $14,160 Favourable.

(b) $12,152 Favourable.

(c) $11,760 Favourable.

(d) $5,760 Favourable.

Answer: _____________________________________________________________

Questions 17 and 18 should be answered using the data given below:

The budgeted sales for a company are 2,500 units at $26 per unit. The standard cost per unit is $16. Actual sales are 3,000 units at $24 per unit. And the actual cost per unit is $18.

Question 17 (2.5 marks):

The sales margin price variance is: (a) $12,000 Favourable.

(b) $12,000 Adverse.

(c) $6,000 Favoruable.

(d) $6,000 Adverse.

Answer: _____________________________________________________________

Question 18 (2.5 marks):

The sales margin volume variance is: (a) $5,000 Favourable.

(b) $5,000 Adverse.

(c) $3,000 Favourable.

(d) $3,000 Adverse.

Answer: _____________________________________________________________

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Question 19 (2.5 marks):

One of the following statements is not true about traditional / incremental budgeting:

(a) Traditional / incremental budgeting takes the current budget as the base for

preparation of the next-period budget,

(b) Traditional / incremental budgeting adjusts the current budget for volume changes

and inflation in preparing the next-period budget.

(c) Traditional / incremental budgeting is more time consuming than Zero-Based

Budgeting (ZBB).

(d) Traditional / incremental budgeting carries forward past wastes and inefficiencies.

Answer: _____________________________________________________________

Question 20 (2.5 marks):

One of the following statements is not true about Zero-Based Budgeting (ZBB):

(a) In ZBB, past activities are re-evaluated as if they are new.

(b) ZBB is repetitive.

(c) In ZBB, managers consider alternative ways of providing the specified activity more

cost effectively.

(d) In ZBB, budgeted activities are ranked based solely on the criteria of their respective

costs.

Answer: _________________________________________