Introduction to Management Accounting, 15e (Horngren)
Chapter 8 Flexible Budgets and Variance Analysis
8.1 Questions
1) A budget prepared for one expected level of activity is called a
________.
A) flexible budget
B) static budget
C) variable budget
D) rolling budget
Answer: B
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2) A budget prepared for different levels of activity is called a ________.
A) rolling budget
B) operating budget
C) flexible budget
D) static budget
Answer: C
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3) The static budget is based on the ________ level of output and the
flexible budget is based on the ________ level of output.
A) actual; expected
B) expected; actual
C) expected; planned
D) actual; projected
Answer: B
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4) Differences between actual results and the static budget at the original
planned level of output are ________ variances.
A) flexible budget
B) financial budget
C) operating budget
D) static budget
Answer: D
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5) An unfavorable static budget variance for operating income may be due to
________ or ________.
A) unfavorable revenue variance; unfavorable cost variance
B) unfavorable revenue variance; favorable cost variance
C) favorable revenue variance; unfavorable cost variance
D) all of the above
Answer: D
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AACSB: Analytic Skills
6) Yesterday Company has the following information:
Actual operating loss at 5,000 units $(11,000)
Budgeted operating income at 5,000 units $5,000
Budgeted operating income at 10,000 units $12,000
Planned level of operations 10,000 units
Actual level of operations 5,000 units
Assume units of output is the cost driver for product costs. What is the
static budget variance for operating income?
A) $11,000 Unfavorable
B) $12,000 Unfavorable
C) $23,000 Unfavorable
D) $23,000 Favorable
Answer: C
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7) Today Company has the following information:
Actual operating loss at 5,000 units $(11,000)
Budgeted operating income at 5,000 units $5,000
Budgeted operating income at 10,000 units $12,000
Planned level of operations 10,000 units
Actual level of operations 5,000 units
Assume the cost driver of product costs is units of production. What is
the flexible budget variance for operating income?
A) $5,000 Unfavorable
B) $11,000 Unfavorable
C) $16,000 Unfavorable
D) $16,000 Favorable
Answer: C
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8) An example of a favorable variance is ________.
A) actual revenues are less than expected revenues
B) actual expenses are less than expected expenses
C) actual material prices are greater than expected material prices
D) expected labor costs are less than actual labor costs
Answer: B
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9) A variance is the difference between ________.
A) a budgeted amount and a benchmark amount
B) the required number of inputs for the number of outputs
C) an actual amount and a budgeted amount
D) a budgeted amount and a standard amount
Answer: C
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10) The type of budget that serves as the original benchmark for evaluating
performance is called a ________ budget.
A) strategic
B) long-range
C) flexible
D) static
Answer: D
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11) Farmers Insurance Company had a static budgeted operating income of
$8.6 million. Actual operating income was $6.4 million. What is the
static-budget variance of operating income?
A) $2.2 million Favorable
B) $2.2 million Unfavorable
C) $6.4 million Favorable
D) $8.6 million Unfavorable
Answer: B
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12) For the current year, John Company's static budget sales were $225,000.
Actual sales for the current year were $220,000. Actual sales last year
were $219,000. Expected sales last year were $225,000. What is the static
budget variance for sales in the current year?
A) $5,000 Favorable
B) $5,000 Unfavorable
C) $6,000 Favorable
D) $6,000 Unfavorable
Answer: B
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13) A budget that can be changed to reflect different levels of activity is
called a ________ budget.
A) rolling
B) continuous
C) flexible
D) static
Answer: C
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14) Differences between the actual results and the flexible budget at the
actual level of output achieved are ________ variances.
A) static budget
B) activity budget
C) flexible budget
D) operating budget
Answer: C
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15) Flexible budget variances are more useful for evaluating ________ than
static budget variances.
A) fixed costs
B) variable costs
C) mixed costs
D) step costs
Answer: B
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16) Tomorrow Company has the following information available:
Budgeted cost of direct materials at 900,000 units $900,000
Budgeted cost of direct materials at 820,000 units $820,000
Actual cost of direct materials at 820,000 units $840,000
Actual level of output(units) 820,000
Planned level of output(units) 900,000
The cost driver of product costs is units of output. What is the static
budget variance for direct material costs?
A) $20,000 Unfavorable
B) $20,000 Favorable
C) $60,000 Favorable
D) $60,000 Unfavorable
Answer: C
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17) Jeff Olson Company has the following information available:
Budgeted cost of direct materials at 900,000 units $900,000
Budgeted cost of direct materials at 820,000 units $820,000
Actual cost of direct materials at 820,000 units $840,000
Actual level of output(units) 820,000
Planned level of output(units) 900,000
The cost driver of product costs is units of output. What is the flexible
budget variance for direct material costs?
A) $20,000 Unfavorable
B) $20,000 Favorable
C) $60,000 Favorable
D) $60,000 Unfavorable
Answer: A
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18) A static budget is prepared for one expected level of activity.
Answer: TRUE
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19) The static budget variance is the difference between actual results and
the static budget.
Answer: TRUE
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20) If actual expenses are less than expected expenses, the expense
variance will be unfavorable.
Answer: FALSE
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21) A static budget has multiple levels of activity.
Answer: FALSE
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22) A favorable expense variance is when budgeted expenses are less than
actual expenses.
Answer: FALSE
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23) A flexible budget is different from a variable budget.
Answer: FALSE
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24) A flexible budget adjusts for changes in sales volume and other cost-
driver activities.
Answer: TRUE
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25) Differentiate between a static budget variance and a flexible budget
variance.
Answer: A static budget variance is the difference between the originally
planned (static) amount and the actual amount. In the case of sales, the
static budget variance for sales is the difference between sales at the
planned level of operations and sales at the actual level of operations.
A flexible budget variance is the difference between the actual amount and
the amount that is expected for the actual level of output achieved. In
the case of sales, the flexible budget variance is the difference between
sales at the actual level of operations and expected sales at the actual
level of operations.
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8.2 Questions
1) To calculate the numbers in a flexible budget, managers use ________.
A) cost functions developed from regression analysis
B) flexible budget formulas
C) cost functions obtained from the high-low method
D) all of the above
Answer: D
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2) When preparing a flexible budget income statement, ________ costs are
constant at different levels of activity.
A) variable
B) step
C) contributed
D) fixed
Answer: D
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3) Which of the following statements is FALSE?
A) Flexible budgets are prepared for a range of activity.
B) Flexible budgets are matched to actual levels of activity.
C) Flexible budgets facilitate management by exception.
D) Flexible budgets are based on different assumptions about cost behavior
than those used for static budgets.
Answer: D
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4) Flat Company currently produces cardboard boxes in an automated process.
Expected production per month is 40,000 units. The required direct
materials cost $0.30 per unit. Manufacturing fixed overhead costs are
$24,000 per month. The cost driver for manufacturing fixed overhead costs
is units of production. In a static budget at 40,000 units, the total
fixed cost is ________ per month and the total variable cost is ________
per month.
A) $24,000; $6,000
B) $24,000; $12,000
C) $12,000; $6,000
D) $12,000; $12,000
Answer: B
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5) Round Company currently produces cardboard boxes in an automated
process. Expected production per month is 40,000 units. The required
direct materials cost $0.30 per unit. Manufacturing fixed overhead costs
are $24,000 per month. The cost driver for manufacturing fixed overhead
costs is units of production. In a flexible budget at 20,000 units, the
total fixed cost is ________ per month and the total variable cost is
________ per month.
A) $24,000; $6,000
B) $24,000; $12,000
C) $12,000; $6,000
D) $12,000; $12,000
Answer: A
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6) The Footy Company currently produces sandals in an automated process.
Expected production per month is 20,000 units. The required direct
materials cost is $1.50 per unit. Fixed overhead costs are $30,000 per
month. The cost driver is units of production. What is the expected
manufacturing cost of 15,000 units for one month?
A) $22,500
B) $45,000
C) $52,500
D) $88,000
Answer: C
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7) Orange Company had the following information available:
Expected Costs and Selling Price Based on 5,000 units:
Variable manufacturing costs per unit $32
Fixed manufacturing costs per unit $20
Selling price per unit $70
Expected production level 5,000 units
In the flexible budget at 10,000 units, what is the total manufacturing
cost?
A) $250,000
B) $420,000
C) $520,000
D) $700,000
Answer: B
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AACSB: Analytic Skills
8) Red Company had the following information available:
Expected Costs and Selling Price Based on 5,000 Units:
Variable manufacturing costs per unit $32
Fixed manufacturing costs per unit $20
Selling price per unit $70
Expected production level 5,000 units
In the flexible budget at 15,000 units, what is the total manufacturing
cost?
A) $480,000
B) $580,000
C) $680,000
D) $780,000
Answer: B
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AACSB: Analytic Skills
9) Hut Company's variable selling and administrative expenses are $48,000
at a production level of 6,000 units. If the production level is 8,000
units, what are the variable selling administrative expenses?
A) $48,000
B) $56,000
C) $64,000
D) $80,000
Answer: C
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10) Bond Company has depreciation expense of $63,000 at a production level
of 21,000 units. If the production level is 15,000 units, what is the
total depreciation expense?
A) $45,000
B) $60,000
C) $63,000
D) $65,000
Answer: C
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11) Fill in the blanks to complete the flexible budget for Meier Company.
______________________________________________________________________
Budget Various Levels of Output
Formula
Per Unit
Units 3,000 4,000 5,000
Sales $25 _____ _____ _____
Variable costs:
Manufacturing _____ _____ $32,000 _____
Administrative $2.625 _____ ____ _____
12) Use the following data to prepare a flexible budget for possible
production levels of 5,000, 5,500 and 6,000 units. Assume all levels of
production are in the same relevant range.
Sales price $12.00 per unit
Variable costs:
Manufacturing $6.00 per unit
Administrative $1.50 per unit
Selling $0.50 per unit
1) A company that has an activity-based costing system with multiple cost
drivers will prepare a(n) ________ budget.
A) financial planning
B) short-range planning
C) activity-based flexible
D) strategic
Answer: C
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2) When should a company use an activity-based flexible budget with
multiple cost drivers instead of a simple flexible budget with one cost
driver?
A) when a significant portion of costs vary with only one cost driver
B) when a significant portion of costs vary with the number of units of
output
C) when a significant portion of costs vary with the number of units of
sales
D) when a significant portion of costs vary with several different cost
drivers
Answer: D
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AACSB: Analytic Skills
3) Divine Intervention Company uses activity-based costing. The company is
trying to estimate the costs of the processing activity in the factory.
The company has developed the following flexible budget formula:
Y = $10.50X + $13,000
Where: Y = Total processing cost per quarter and X = Number of machine
hours
What are the expected total processing costs if 10,000 machine hours are
expected next quarter?
A) $13,000
B) $105,000
C) $113,000
D) $118,000
Answer: D
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AACSB: Analytic Skills
4) Priestly Company uses activity-based costing. The company is trying to
estimate the costs of the processing activity in the factory. The company
has developed the following flexible budget formula:
Y = $10.50X + $13,000
Where: Y = Total processing cost per quarter and X = Number of machine
hours
If 10,000 machine hours are used next quarter, total variable costs are
________ and total fixed costs are ________.
A) $105,000; $13,000
B) $105,000; $130,000,000
C) $113,000; $130,000,000
D) $10.50; $13,000
Answer: A
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5) Pizza Company planned to produce 12,000 units. This level of activity
required 40 setups at a cost of $18,000 plus $500 per setup. Actual
production was 10,000 units, requiring 15 setups. Actual setup cost was
$26,000. What is the static budget amount for total setup costs?
A) $21,000
B) $25,500
C) $26,000
D) $38,000
Answer: D
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AACSB: Analytic Skills
6) Puppy Company planned to produce 12,000 units. This level of activity
required 20 setups at a cost of $22,000 plus $500 per setup. Actual
production was 10,000 units, requiring 15 setups. Actual setup cost was
$26,000. At 10,000 units, what is the flexible budget amount for total
setup costs?
A) $7,500
B) $22,000
C) $26,000
D) $29,500
Answer: D
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AACSB: Analytic Skills
7) An activity-based flexible budget is based on budgeted costs for every
activity using the related cost driver.
Answer: TRUE
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LO: 8-3
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8.4 Questions
1) The difference between static budget amounts and flexible budget amounts
are ________. The difference between flexible budget amounts and actual
results are ________.
A) static variances; flexible budget variances
B) master variances; flexible budget variances
C) quantity variances; static budget variances
D) activity level variances; flexible budget variances
Answer: D
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2) Actual results may differ from the static budget numbers because
________.
A) actual output levels were not the same as in the static budget
B) actual variable costs were higher than expected variable costs
C) actual fixed costs were higher than expected fixed costs
D) all of the above
Answer: D
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AACSB: Analytic Skills
3) Which is NOT a reason for a static budget variance?
A) Actual sales volume was higher than projected sales volume.
B) Actual variable costs per unit were higher than expected variable costs
per unit.
C) Actual fixed costs per unit were higher than expected fixed costs per
unit.
D) Actual sales volume in current period was higher than projected sales
volume in last period.
Answer: D
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AACSB: Analytic Skills
4) The static budget variance equals the ________ variance plus the
________ variance.
A) flexible budget; activity-level
B) flexible budget; variable budget
C) variable budget; fixed budget
D) sales activity; strategic budget
Answer: A
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5) Unfavorable flexible budget variances result from ________.
A) actual costs exceeding planned costs
B) planned costs exceeding actual costs
C) actual output exceeding planned output
D) planned output exceeding actual output
Answer: A
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AACSB: Analytic Skills
6) Unfavorable activity level variances are due to ________.
A) planned costs exceeding actual costs
B) actual costs exceeding planned costs
C) planned output exceeding actual output
D) actual output exceeding planned output
Answer: C
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AACSB: Analytic Skills
7) ________ is the degree to which an organization minimizes the ________
used to achieve an objective.
A) Efficiency; costs
B) Efficiency; resources
C) Effectiveness; resources
D) Effectiveness; costs
Answer: B
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8) When a firm meets a sales goal, it is said to be ________. When a firm
incurs more direct material costs to manufacture products than expected,
the firm is said to be ________.
A) effective; ineffective
B) efficient; inefficient
C) effective; inefficient
D) efficient; ineffective
Answer: C
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AACSB: Analytic Skills
9) Ben Company planned to produce 12,000 units. This level of production
required 20 setups at a cost of $18,000 plus $500 per setup. Actual
production was 10,000 units, requiring 15 setups. Actual setup cost was
$26,000. What is the static budget variance for setup costs?
A) $2,000 Favorable
B) $2,000 Unfavorable
C) $2,500 Favorable
D) $2,500 Unfavorable
Answer: A
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AACSB: Analytic Skills
10) Stein Company planned to produce 12,000 units. This level of
production required 20 setups at a cost of $18,000 plus $500 per setup.
Actual production was 10,000 units, requiring 15 setups. Actual setup cost
was $26,000. What is the flexible budget variance for setup costs?
A) $500 Favorable
B) $500 Unfavorable
C) $2,000 Favorable
D) $2,000 Unfavorable
Answer: B
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AACSB: Analytic Skills
11) Efficiency is indicated by the ________ variances.
A) sales activity
B) static budget
C) flexible budget
D) strategic budget
Answer: C
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12) Effectiveness is indicated by the ________ variances.
A) sales activity
B) static budget
C) flexible budget
D) price
Answer: A
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13) Blue Company planned to sell 35,000 units. Actual sales were 30,000
units. Based on this information, Blue Company was ________.
A) efficient
B) inefficient
C) effective
D) ineffective
Answer: D
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14) Black Company planned to produce and sell 900 units at a total cost of
$180,000. Actual production and sales were 900 units at a cost of
$170,000. Black Company was ________.
A) efficient and ineffective
B) inefficient and ineffective
C) inefficient and effective
D) efficient and effective
Answer: D
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15) If the flexible budget variance was $6,000 Favorable and the sales
activity variance was $3,000 Favorable, then the static budget variance was
________.
A) $3,000 Favorable
B) $3,000 Unfavorable
C) $9,000 Favorable
D) $9,000 Unfavorable
Answer: C
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16) If the sales activity variance was $8,000 Favorable and the static
budget variance was $10,000 Favorable, then the flexible budget variance
was ________.
A) $2,000 Favorable
B) $2,000 Unfavorable
C) $18,000 Favorable
D) $18,000 Unfavorable
Answer: A
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AACSB: Analytic Skills
17) Which statement would NOT be a reason for a flexible budget variance?
A) Material prices were different than expected.
B) Labor prices were different than expected.
C) Actual volume of activity was different than expected.
D) Amount of labor used per unit of output was different than expected.
Answer: C
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18) Which of the following is NOT an example of efficient performance?
A) Direct labor hours used per unit were less than expected.
B) Direct material used per unit was less than expected.
C) More outputs were achieved with less inputs than predicted.
D) More outputs were produced than expected.
Answer: D
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AACSB: Analytic Skills
19) Total static budget variances are equal to the sum of activity-level
variances and flexible budget variances.
Answer: TRUE
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LO: 8-4
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20) By using a flexible budget, changes in activity level cannot cause any
variances between the flexible budget and actual results.
Answer: TRUE
Diff: 2 Page Ref: 309-310
LO: 8-4
AACSB: None
21) As the terms are used in the budgeting process, it is possible for a
company to be efficient at the same time it is ineffective.
Answer: TRUE
Diff: 2 Page Ref: 310
LO: 8-4
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22) Efficiency is the degree to which a goal or objective is met.
Answer: FALSE
Diff: 1 Page Ref: 310
LO: 8-4
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23) If the total sales-activity variance and the static-budget variance are
equal, there is no flexible budget variance.
Answer: TRUE
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LO: 8-4
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8.5 Questions
1) Favorable flexible budget variances for costs may indicate that costs
are well-managed. On the other hand, these same variances can indicate
________.
A) the company is spending too little for vital activities, such as
maintenance of machines.
B) the company is cutting costs to drive up profits in the short run.
C) the company is cutting back on benefits offered to customers and
employees.
D) all of the above
Answer: D
Diff: 2 Page Ref: 311
LO: 8-5
AACSB: Analytic Skills
2) Unfavorable flexible budget variances for costs do not necessarily mean
that costs are mismanaged if ________.
A) actual wage rate increases for labor union workers are not reflected in
standard wage rates
B) high quality materials were used to reduce waste
C) high quality materials were used to increase product quality
D) all of the above
Answer: D
Diff: 2 Page Ref: 311
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AACSB: Analytic Skills
3) Flexible budget variances are designed to measure the ________.
A) effectiveness of operations at an expected level of activity
B) effectiveness of operations at an actual level of activity
C) efficiency of operations at an expected level of activity
D) efficiency of operations at an actual level of activity
Answer: D
Diff: 2 Page Ref: 311
LO: 8-5
AACSB: None
4) The following data are for Point Corporation:
Flexible Budget for
Actual Static Budget Actual Sales Activity
Units 18,000 16,000 18,000
Sales $360,000 $320,000 $360,000
Variable costs 234,000 192,000 216,000
Contribution margin $126,000 $128,000 $144,000
Fixed costs 76,000 80,000 80,000
Operating income $50,000 $48,000 $64,000
The flexible budget variance for operating income is ________.
A) $2,000 Favorable
B) $2,000 Unfavorable
C) $14,000 Favorable
D) $14,000 Unfavorable
Answer: D
Diff: 2 Page Ref: 310, 311
LO: 8-5
AACSB: Analytic Skills
5) The following data are for Pepperdine Corporation:
Flexible Budget for
Actual Static Budget Actual Sales Activity
Units 18,000 16,000 18,000
Sales $360,000 $320,000 $360,000
Variable costs 234,000 192,000 216,000
Contribution margin $126,000 $128,000 $144,000
Fixed costs 76,000 80,000 80,000
Operating income $50,000 $48,000 $64,000
The sales activity variance for operating income is ________.
A) $14,000 Favorable
B) $14,000 Unfavorable
C) $16,000 Favorable
D) $16,000 Unfavorable
Answer: C
Diff: 2 Page Ref: 310, 311
LO: 8-5
AACSB: Analytic Skills
6) The following data are for Sacramento Corporation:
Flexible Budget for
Actual Static Budget Actual Sales Activity
Units 18,000 16,000 18,000
Sales $360,000 $320,000 $360,000
Variable costs 234,000 192,000 216,000
Contribution margin $126,000 $128,000 $144,000
Fixed costs 76,000 80,000 80,000
Operating income $50,000 $48,000 $64,000
The static budget variance for operating income is ________.
A) $2,000 Favorable
B) $2,000 Unfavorable
C) $16,000 Favorable
D) $16,000 Unfavorable
Answer: A
Diff: 2 Page Ref: 310, 311
LO: 8-5
AACSB: Analytic Skills
7) The sales activity variance for ________ will always be zero.
A) sales
B) contribution margin
C) variable costs
D) fixed costs
Answer: D
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AACSB: Analytic Skills
8) Which of the following statements about perfection standards is TRUE?
A) It is generally believed that they have a negative influence on employee
morale.
B) They are expressions of the most efficient performance possible.
C) They usually result in unfavorable variances.
D) All of the above
Answer: D
Diff: 2 Page Ref: 313
LO: 8-5
AACSB: None
9) Which statement about "currently attainable standards" is FALSE?
A) They allow for normal spoilage and nonproductive time.
B) They represent projections of what will probably be attained.
C) Employees usually view these standards as reasonable.
D) Because they allow for waste, they usually result in favorable
variances.
Answer: D
Diff: 2 Page Ref: 313
LO: 8-5
AACSB: None
10) Who is usually responsible for sales activity income variances?
A) operating managers in factory
B) marketing managers
C) research and development function
D) product design function
Answer: B
Diff: 2 Page Ref: 313
LO: 8-5
AACSB: None
11) Variances should be investigated if they ________.
A) are favorable
B) are unfavorable
C) are smaller than the prior period
D) exceed certain dollar or percentage deviations from the budget
Answer: D
Diff: 2 Page Ref: 314, 315
LO: 8-5
AACSB: None
12) Favorable variances do not require investigation.
Answer: FALSE
Diff: 2 Page Ref: 311
LO: 8-5
AACSB: None
13) Favorable flexible budget variances are always good news.
Answer: FALSE
Diff: 2 Page Ref: 311
LO: 8-5
AACSB: None
14) Sales-activity variances measure how efficient managers have been in
meeting the planned sales goal.
Answer: FALSE
Diff: 2 Page Ref: 312-313
LO: 8-5
AACSB: None
15) An expected cost is the cost that is least likely to be attained.
Answer: FALSE
Diff: 2 Page Ref: 313
LO: 8-5
AACSB: None
16) Using standard costs is popular with companies in the United States.
Answer: TRUE
Diff: 1 Page Ref: 313
LO: 8-5
AACSB: None
17) Perfection standards and ideal standards are different.
Answer: FALSE
Diff: 2 Page Ref: 313
LO: 8-5
AACSB: None
18) Ideal standards make no provision for waste, spoilage and machine
breakdowns.
Answer: TRUE
Diff: 2 Page Ref: 313
LO: 8-5
AACSB: None
19) Ideal standards have an adverse effect on employee motivation.
Answer: TRUE
Diff: 2 Page Ref: 313
LO: 8-5
AACSB: None
20) Currently attainable standards do not make allowances for spoilage and
waste.
Answer: FALSE
Diff: 2 Page Ref: 313
LO: 8-5
AACSB: None
21) Standard cost systems value products according to actual costs.
Answer: FALSE
Diff: 2 Page Ref: 313
LO: 8-5
AACSB: None
22) Currently attainable standards are levels of performance that can be
achieved by realistic levels of effort.
Answer: TRUE
Diff: 2 Page Ref: 313
LO: 8-5
AACSB: None
23) The unfavorable variances resulting from ideal standards are intended
to constantly remind personnel of the continuous need for improvement.
Answer: TRUE
Diff: 2 Page Ref: 313
LO: 8-5
AACSB: None
24) Variances are signals that actual operations are different from what
was expected.
Answer: TRUE
Diff: 2 Page Ref: 314
LO: 8-5
AACSB: None
25) One of the first questions a manager should consider when explaining a
large variance is whether expectations are valid.
Answer: TRUE
Diff: 2 Page Ref: 314
LO: 8-5
AACSB: None
26) In most companies, variances are investigated only if they exceed a
minimum dollar or percentage deviation from budgeted amounts.
Answer: TRUE
Diff: 2 Page Ref: 315
LO: 8-5
AACSB: None
27) The following data are for the month of January for the Sterling
Company:
Static budget data:
Sales of 9,000 pairs at $90 per pair
Variable costs of $69 per pair
Total fixed costs $108,000
Actual results:
Sales of 9,600 pairs at $87 per pair
Variable costs of $72 per pair
Total fixed costs $109,200
Required:
A) What is the static budget operating income?
B) What is the sales activity variance for operating income?
C) What is the flexible budget variance for operating income?
Answer: Actual Flexible Budg. Static Budg.
Sales $835,200 $864,000 $810,000
Variable costs 691,200 662,400 621,000
Fixed costs 109,200 108,000 108,000
Operating income $34,800 $93,600 $81,000
A) $81,000
B) $12,600 Favorable
C) $58,800 Unfavorable
Diff: 2 Page Ref: 310-312
LO: 8-5
AACSB: Analytic Skills
28) What are two possible interpretations of "currently attainable
standards"?
Answer: The first approach sets standards so that employees regard their
attainment as highly probable if normal effort and diligence are exercised.
Hence, the standards are predictions of what will likely occur,
anticipating some normal level of inefficiencies. Under normal conditions,
this approach yields variances that are random and negligible.
The second approach falls somewhere between perfection standards and the
first approach above. This approach sets standards so that employees
regard them as "stretch goals," where meeting the standard is difficult but
possible. Managers can achieve such standards only by very efficient
operations. Variances tend to be unfavorable.
Diff: 2 Page Ref: 313
LO: 8-5
AACSB: None
8.6 Questions
1) The quantity variance for direct materials can be computed by
multiplying the standard price by the difference between the ________.
A) standard inputs allowed and expected inputs allowed at actual output
B) quantity of inputs actually used and the quantity of inputs that should
have been used for the expected output
C) standard inputs allowed and expected inputs allowed for expected output
D) quantity of inputs actually used and the quantity of inputs that should
have been used for actual output
Answer: D
Diff: 2 Page Ref: 317
LO: 8-6
AACSB: None
2) Rate variances are the same as ________ variances. Efficiency variances
are the same as ________ variances.
A) spending; effective
B) activity; static
C) usage; quantity
D) price; quantity
Answer: D
Diff: 1 Page Ref: 319
LO: 8-6
AACSB: None
3) A ________ is most likely to be held accountable for price variances for
direct materials.
A) machine operator
B) production supervisor
C) purchasing manager
D) marketing director
Answer: C
Diff: 1 Page Ref: 319
LO: 8-6
AACSB: None
4) Eagle Company had a favorable flexible budget direct material variance.
In this case, it would NOT be possible for the direct material price
variance to be ________ and the direct material quantity variance to be
________.
A) favorable; unfavorable
B) unfavorable; favorable
C) unfavorable; unfavorable
D) favorable; favorable
Answer: C
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
5) If the direct labor price variance is $800 Favorable and the direct
labor usage variance is $700 Unfavorable, then ________.
A) the direct labor flexible budget variance is $100 Favorable
B) actual total wages paid were $800 more than expected
C) actual labor hours were less than expected
D) actual material prices were less than expected
Answer: A
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
6) The following information is for Brooklyn Corporation:
Direct Materials(measured in pounds)
Standard price per unit of input $29
Actual price per unit of input $27
Standard inputs per unit of output 3 pounds
Actual units of input 9,000 pounds
Actual units of output 3,000 units
What is the direct material price variance?
A) $6,000 Favorable
B) $6,000 Unfavorable
C) $18,000 Favorable
D) $18,000 Unfavorable
Answer: C
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
7) The following information is for Euclid Corporation:
Direct Materials(measured in pounds)
Standard price per unit of input $25
Actual price per unit of input $24
Standard inputs per unit of output 3 pounds
Actual units of input 8,300 pounds
Actual units of output 2,770 units
What is the direct material usage variance?
A) $250 Favorable
B) $250 Unfavorable
C) $8,300 Favorable
D) $8,300 Unfavorable
Answer: A
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
8) The following information is for Kickapoo Corporation:
Direct Materials(measured in pounds)
Standard price per unit of input $20
Actual price per unit of input $18
Standard inputs per unit of output 3 pounds
Actual units of input 8,300 pounds
Actual units of output 2,770 units
What is the direct material flexible budget variance?
A) $16,400 Favorable
B) $16,400 Unfavorable
C) $16,800 Favorable
D) $16,800 Unfavorable
Answer: C
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
9) Strongsville Company produces 2,500 units. Each unit was expected to
require 2 labor hours at a cost of $10 per hour. Total labor cost was
$52,250 for 4,750 hours worked. Direct labor is measured in labor hours.
What is the direct labor price variance?
A) $2,500 Favorable
B) $2,500 Unfavorable
C) $4,750 Favorable
D) $4,750 Unfavorable
Answer: D
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
10) Borabora Company produces 2,500 units. Each unit was expected to
require 2 labor hours at a cost of $10 per hour. Total labor cost was
$52,250 for 4,750 hours worked. Direct labor is measured in labor hours.
What is the direct labor quantity variance?
A) $2,500 Favorable
B) $2,500 Unfavorable
C) $2,750 Favorable
D) $2,750 Unfavorable
Answer: A
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
11) Yugo Company produces 2,500 units. Each unit was expected to require 2
labor hours at a cost of $10 per hour. Total labor cost was $52,250 for
4,750 hours worked. Direct labor is measured in labor hours. What is the
flexible budget variance for direct labor?
A) $2,250 Favorable
B) $2,250 Unfavorable
C) $7,500 Favorable
D) $7,500 Unfavorable
Answer: B
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
12) The Patriot Company makes chairs for which the following standards have
been developed:
Standard Inputs Expected Standard Price Expected
For Each Unit of Output Per Unit of Input
Direct Materials 13 pounds $3 per pound
Direct Labor 2 hours $23 per hour
Production of 250 chairs was expected in March, but 300 chairs were
actually completed. Direct materials purchased and used were 2,700 pounds
at an actual price of $4.40 per pound. Direct labor cost for the month was
$10,620, and the actual pay per hour was $19.00. What is the standard
direct material cost for each chair produced?
A) $19.00
B) $39.00
C) $44.00
D) $46.00
Answer: B
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
13) The Charger Company makes tables and the following standards have been
developed:
Standard Inputs Expected Standard Price Expected
For Each Unit of Output Per Unit of Input
Direct Materials 10 pounds $4 per pound
Direct Labor 3 hours $16 per hour
Production of 230 tables was expected in July, but 250 tables were actually
completed. Direct materials purchased and used were 2,200 pounds at an
actual price of $4.50 per pound. Direct labor cost for the month was
$10,620, and the actual pay per hour was $18.00. What is the direct
material price variance for July?
A) $800 Favorable
B) $800 Unfavorable
C) $1,100 Favorable
D) $1,100 Unfavorable
Answer: D
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
14) The Vito Company makes tables for which the following standards have
been developed:
Standard Inputs Expected Standard Price Expected
For Each Unit of Output Per Unit of Input
Direct Materials 10 pounds $4 per pound
Direct Labor 3 hours $16 per hour
Production of 200 tables was expected in July, but 220 tables were actually
completed. Direct materials purchased and used were 2,000 pounds at an
actual price of $4.40 per pound. Direct labor cost for the month was
$10,620, and the actual pay per hour was $18.00. What is the direct
material quantity variance for July?
A) $800 Favorable
B) $800 Unfavorable
C) $880 Favorable
D) $880 Unfavorable
Answer: A
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
15) The Long Company makes tables for which the following standards have
been developed:
Standard Inputs Expected Standard Price Expected
For Each Unit of Output Per Unit of Input
Direct Materials 12 pounds $4 per pound
Direct Labor 4 hours $30 per hour
Production of 200 tables was expected in August, but 220 tables were
actually completed. Direct materials purchased and used were 2,100 pounds
at an actual price of $4.40 per pound. Direct labor cost for the month was
$10,620, and the actual pay per hour was $18.00. What is the standard
direct labor cost for each table produced?
A) $4.00
B) $20.00
C) $48.00
D) $120.00
Answer: D
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
16) The Luke Company makes tables for which the following standards have
been developed:
Standard Inputs Expected Standard Price Expected
For Each Unit of Output Per Unit of Input
Direct Materials 17 pounds $5.20 per pound
Direct Labor 3 hours $16 per hour
Production of 200 tables was expected in May, but 220 tables were actually
completed. Direct materials purchased and used were 2,100 pounds at an
actual price of $4.40 per pound. Direct labor cost for the month was
$10,620, and the actual pay per hour was $18.00. What is the direct labor
price variance for the month of May?
A) $1,180 Favorable
B) $1,180 Unfavorable
C) $1,200 Favorable
D) $1,200 Unfavorable
Answer: B
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
17) The Paul Company makes tables for which the following standards have
been developed:
Standard Inputs Expected Standard Price Expected
For Each Unit of Output Per Unit of Input
Direct Materials 10 pounds $4 per pound
Direct Labor 3 hours $16 per hour
Production of 200 tables was expected in June, but 220 tables were actually
completed. Direct materials purchased and used were 2,100 pounds at an
actual price of $4.40 per pound. Direct labor cost for the month was
$10,620, and the actual pay per hour was $18.00. What is the direct labor
quantity variance for the month of June?
A) $1,120 Favorable
B) $1,120 Unfavorable
C) $1,260 Favorable
D) $1,260 Unfavorable
Answer: A
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
18) The Snowman Company makes mugs for which the following standards have
been developed:
Standard Inputs Expected Standard Price Expected
For Each Unit of Output Per Unit of Input
Direct Materials 5 ounces $2 per ounce
Direct Labor 3.2 hours $9 per hour
Production of 400 mugs was expected in July, but 440 mugs were actually
completed. Direct materials purchased and used were 2,100 ounces at an
actual price of $2.20 per ounce. Direct labor cost for the month was
$5,310, and the actual pay per hour was $10.00. What is the standard
direct material cost for each mug produced?
A) $9.00
B) $10.00
C) $13.20
D) $32.00
Answer: B
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
19) The Reindeer Company makes mugs for which the following standards have
been developed:
Standard Inputs Expected Standard Price Expected
For Each Unit of Output Per Unit of Input
Direct Materials 5 ounces $2 per ounce
Direct Labor 1.5 hours $8 per hour
Production of 400 mugs was expected in July, but 440 mugs were actually
completed. Direct materials purchased and used were 2,100 ounces at an
actual price of $2.30 per ounce. Direct labor cost for the month was
$5,310, and the actual pay per hour was $9.00. What is the direct material
price variance for July?
A) $400 Favorable
B) $400 Unfavorable
C) $630 Favorable
D) $630 Unfavorable
Answer: D
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
20) The Cheers Company makes mugs for which the following standards have
been developed:
Standard Inputs Expected Standard Price Expected
For Each Unit of Output Per Unit of Input
Direct Materials 5 ounces $2 per ounce
Direct Labor 1.5 hours $8 per hour
Production of 400 mugs was expected in July, but 440 mugs were actually
completed. Direct materials purchased and used were 2,100 ounces at an
actual price of $2.20 per ounce. Direct labor cost for the month was
$5,310, and the actual pay per hour was $9.00. What is the direct material
quantity variance for July?
A) $200 Favorable
B) $200 Unfavorable
C) $220 Favorable
D) $220 Unfavorable
Answer: A
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
21) The Petunia Company makes mugs for which the following standards have
been developed:
Standard Inputs Expected Standard Price Expected
For Each Unit of Output Per Unit of Input
Direct Materials 5 ounces $2 per ounce
Direct Labor 2.5 hours $8 per hour
Production of 400 mugs was expected in August, but 440 mugs were actually
completed. Direct materials purchased and used were 2,100 ounces at an
actual price of $2.20 per ounce. Direct labor cost for the month was
$5,310, and the actual pay per hour was $9.00. What is the direct labor
price variance for August?
A) $420 Favorable
B) $420 Unfavorable
C) $590 Favorable
D) $590 Unfavorable
Answer: D
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
22) The Violet Company makes mugs for which the following standards have
been developed:
Standard Inputs Expected Standard Price Expected
For Each Unit of Output Per Unit of Input
Direct Materials 5 ounces $2 per ounce
Direct Labor 1.5 hours $8 per hour
Production of 400 mugs was expected in July, but 440 mugs were actually
completed. Direct materials purchased and used were 2,100 ounces at an
actual price of $2.30 per ounce. Direct labor cost for the month was
$5,310, and the actual pay per hour was $9.00. What is the direct labor
quantity variance for July?
A) $560 Favorable
B) $560 Unfavorable
C) $630 Favorable
D) $630 Unfavorable
Answer: A
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
23) In a manufacturing area of a firm, poor product design and problems
with the quality of materials will, more than likely, result in a(n)
________ variance or ________ variance.
A) unfavorable material efficiency; unfavorable labor usage
B) favorable material efficiency; unfavorable labor price
C) unfavorable material price; unfavorable labor rate
D) unfavorable material price; unfavorable labor usage
Answer: A
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
24) One cause of a flexible budget variance for direct labor may be a
difference between expected and actual hourly wage rates for factory
workers.
Answer: TRUE
Diff: 2 Page Ref: 317
LO: 8-6
AACSB: Analytic Skills
25) A quantity variance for direct materials measures the deviation between
the quantity of inputs that should have been used to achieve the actual
output and the actual quantity of inputs used to achieve the actual output.
Answer: TRUE
Diff: 2 Page Ref: 317
LO: 8-6
AACSB: None
26) The direct materials price variance is based on the standard quantity
of inputs allowed for the actual output.
Answer: FALSE
Diff: 2 Page Ref: 317
LO: 8-6
AACSB: None
27) The flexible budget variance for direct labor can be broken down into a
price variance and an effectiveness variance.
Answer: FALSE
Diff: 2 Page Ref: 319
LO: 8-6
AACSB: None
28) The quantity variance and efficiency variance for direct labor are
different types of variances.
Answer: FALSE
Diff: 1 Page Ref: 319
LO: 8-6
AACSB: None
29) The flexible budget variance for direct labor equals the labor price
variance plus the labor quantity variance.
Answer: TRUE
Diff: 2 Page Ref: 319
LO: 8-6
AACSB: None
30) A favorable materials price variance may lead to an unfavorable
materials usage variance.
Answer: TRUE
Diff: 2 Page Ref: 321
LO: 8-6
AACSB: Analytic Skills
31) Direct Material Direct Labor
Std. price per unit of input $12 per foot $14 per hour
Actual price per unit of input $14 per foot $13 per hour
Std. inputs allowed per unit of output 5 feet 3 hours
Actual units of input 2,500 feet 1,550 hours
Actual units of output 600 units
Required:
Compute the price and quantity variances for direct materials and direct
labor.
Answer:
Direct material:
Price variance: ($14 - $12) x 2,500 = $5,000 Unfavorable
Quantity variance: [2,500 — (600 x 5)] x $12 = $6,000 Favorable
Direct labor:
Price variance: ($13 - $14) x 1,550 = $1,550 Favorable
Quantity variance: [1,550 — (600 x 3)] x $14 = $3,500 Favorable
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
32) The following data was obtained for a company that makes statutes:
Standard Inputs Expected Standard Price
For Each Unit of Output Per Unit of Input
Direct material 5 pounds $12 per pound
Direct labor 1.5 hours $12 per hour
During the month of July, the company actually produced 1,000 statutes,
which is 100 units less than expected. Direct material purchased and used
amounted to 5,500 pounds at a cost of $12.50 per pound. Actual direct
labor was 1,450 hours at an actual cost of $13.00 per hour.
Required:
A) Compute the price and quantity variances for direct materials.
B) Compute the price and quantity variances for direct labor.
Answer:
A) Price variance = ($12.50 - $12.00) x 5,500 = $2,750 Unfavorable
Quantity variance = (5,500 — 5,000) x $12 = $6,000 Unfavorable
B) Price variance = ($13.00 - $12.00) x 1,450 = $1,450 Unfavorable
Quantity variance = (1,450 — 1,500) x $12.00 = $600 Favorable
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
33) The following information is available:
Actual Inputs for Actual Price
Each Unit of Output Per Unit of Input
Direct materials 11 yards $12 per yard
Direct labor 4.2 hours $8 per hour
Actual output was 1,000 units. The company's per unit standards call for
15 yards of direct material at $10.00 per yard and 4 hours of direct labor
at $9.50 per hour. The company purchased and used 11,000 yards of
material.
Required:
A) Compute the price and quantity variances for direct material.
B) Compute the price and quantity variances for direct labor.
Answer:
A) Price Variance = 11,000 x ($12 - $10) = $22,000 Unfavorable
Quantity Variance = 1,000 x (11 — 15) x $10 = $40,000 Favorable
B) Price Variance = ($8.00 -$9.50) x (1,000 x 4.2) = $6,300 Favorable
Quantity Variance = [1,000 x (4.2 -4)] x $9.50 = $1,900 Unfavorable
Diff: 2 Page Ref: 320
LO: 8-6
AACSB: Analytic Skills
34) What are some common causes of unfavorable quantity variances for
direct labor?
Answer: Some common causes are poor quality of material, untrained
workers, poor workmanship, changes in production method, new workers,
machine breakdowns, faulty product designs, and inefficient machines.
Diff: 2 Page Ref: 319-321
LO: 8-6
AACSB: None
8.7 Questions
1) The flexible budget variance for variable overhead costs is composed of
a(n) ________ variance and a(n) ________ variance.
A) efficiency; effective
B) spending; rate
C) quantity; efficiency
D) spending; efficiency
Answer: D
Diff: 2 Page Ref: 322
LO: 8-7
AACSB: None
2) The variable overhead efficiency variance depends on whether the
quantity of the cost driver used is more or less than ________.
A) the standard amount of output for the expected amount of output
B) the quantity allowed for the expected amount of output
C) the quantity allowed for the static budget amount of output
D) the quantity allowed for the actual output
Answer: D
Diff: 2 Page Ref: 322
LO: 8-7
AACSB: Analytic Skills
3) The variable overhead spending variance combines ________ and ________
effects.
A) price; quantity
B) price; efficiency
C) efficiency; sales activity
D) rate; sales activity
Answer: A
Diff: 2 Page Ref: 322
LO: 8-7
AACSB: None
4) Variable overhead efficiency variances are unfavorable when actual cost
driver activity exceeds the ________.
A) activity allowed for the actual output
B) activity allowed for the expected output
C) activity allowed for the planned output
D) activity allowed for last period's output
Answer: A
Diff: 2 Page Ref: 323
LO: 8-7
AACSB: Analytic Skills
5) The following data for the Safety Company pertain to the production of
3,000 clay bottles during July:
Standard variable overhead cost $5.00 per pound of clay
Variable overhead efficiency variance $340 Unfavorable
Total actual variable overhead cost $11,340
Standard variable overhead cost allowed for units produced $12,000
What is the variable overhead spending variance?
A) $560 Unfavorable
B) $800 Favorable
C) $800 Unfavorable
D) $1,000 Favorable
Answer: D
Diff: 2 Page Ref: 323
LO: 8-7
AACSB: Analytic Skills
6) The following data for the Hermit Company pertain to the production of
2,000 clay bottles during July:
Standard variable overhead cost $6.00 per pound of clay
Variable overhead efficiency variance $240 Unfavorable
Total actual variable overhead cost $11,000
Standard variable overhead cost allowed for units produced $12,000
What is the variable overhead flexible budget variance?
A) $240 Unfavorable
B) $1,000 Favorable
C) $1,000 Unfavorable
D) $1,280 Favorable
Answer: B
Diff: 2 Page Ref: 323
LO: 8-7
AACSB: Analytic Skills
7) The following data for the SeeMe Company pertain to the production of
1,000 clay bottles during July:
Standard variable overhead cost $26.00 per pound of clay
Variable overhead efficiency variance $740 Unfavorable
Total actual variable overhead cost $24,800
Standard variable overhead cost allowed for units produced $26,000
What is the variable overhead spending variance?
A) $1,200 Unfavorable
B) $1,200 Favorable
C) $1,260 Unfavorable
D) $1,940 Favorable
Answer: D
Diff: 2 Page Ref: 323
LO: 8-7
AACSB: Analytic Skills
8) The following data for the Fragile Company pertain to the production of
1,000 clay bottles during July:
Standard variable overhead cost $26.00 per pound of clay
Variable overhead efficiency variance $540 Unfavorable
Total actual variable overhead cost $25,000
Standard variable overhead cost allowed for units produced $26,000
What is the variable overhead flexible budget variance?
A) $540 Unfavorable
B) $1,000 Favorable
C) $1,000 Unfavorable
D) $2,280 Favorable
Answer: B
Diff: 2 Page Ref: 323
LO: 8-7
AACSB: Analytic Skills
9) The variable overhead spending variance is the difference between the
actual variable overhead cost and the amount of variable overhead cost
budgeted for the actual level of cost driver activity.
Answer: TRUE
Diff: 2 Page Ref: 322
LO: 8-7
AACSB: None
10) The variable overhead efficiency variance indicates to management how
much variable overhead cost it may waste by not controlling the use of cost-
driver activity.
Answer: TRUE
Diff: 2 Page Ref: 322
LO: 8-7
AACSB: None
11) Given the following information:
Variable overhead costs incurred $20,570
Material purchased and used 2,900 pounds
Direct labor costs incurred $24,500
Direct labor hours incurred 2,450 hours
Finished units produced 500 units
Actual material cost $37 per pound
Standard direct labor cost $9 per hour
Standard material cost $40 per pound
Standard variable overhead $8 per hour
Standard pounds of material in a finished unit 6 pounds
Standard direct labor hours per finished unit 5 hours
Required:
A) Compute the price and quantity variances for direct materials.
B) Compute the price and quantity variances for direct labor.
C) Compute the spending and efficiency variances for variable overhead.
Answer:
A) Price variance = ($37 - $40) x 2,900 = $8,700 Favorable
Quantity variance = [2,900 — (500 x 6)] x $40 = $4,000 Favorable
B) Price variance = $24,500 — ($9 x 2,450) = $2,450 Unfavorable
Quantity variance = [2,450 — (500 x 5)] x $9.00 = $450 Favorable
C) Spending variance = $20,570 — (2,450 x $8) = $970 Unfavorable
Efficiency variance = [2,450 — (500 x 5)] x $8 = $400 Favorable
Diff: 2 Page Ref: 322
LO: 8-6
AACSB: Analytic Skills
8.8 Questions
1) The fixed overhead spending variance equals the difference between
________.
A) actual fixed overhead costs and budgeted fixed overhead costs at the
actual level of operations
B) actual fixed overhead costs and budgeted variable overhead costs at the
actual level of operations
C) actual fixed overhead costs and predicted variable overhead costs based
on actual driver used
D) actual fixed overhead costs and predicted variable overhead costs based
on standard costs
Answer: A
Diff: 2 Page Ref: 322
LO: 8-8
AACSB: Analytic Skills
2) The flexible budget variance for fixed overhead costs equals the
________ variance.
A) efficiency
B) spending
C) static budget
D) operating budget
Answer: B
Diff: 2 Page Ref: 323
LO: 8-8
AACSB: None
3) ZZ Company reports the following information for the last year of
operations:
Actual fixed overhead costs(7,000 units) $77,000
Budgeted fixed overhead costs(10,000 units) 80,000
Planned level of operations(in units) 10,000
Actual level of operations(in units) 7,000
What is the fixed overhead spending variance?
A) $3,000 Favorable
B) $21,000 Unfavorable
C) $24,000 Unfavorable
D) $30,000 Favorable
Answer: A
Diff: 2 Page Ref: 323
LO: 8-8
AACSB: Analytic Skills
4) Fixed overhead costs do not vary with cost driver activity.
Answer: TRUE
Diff: 2 Page Ref: 323
LO: 8-8
AACSB: None
Report "Introduction to Management Accounting, 15e (Horngren) Chapter 8 Flexible Budgets and Variance Analysis"