10-A 12 month budget that rolls forward one month as the current month is comple
ID: 2581926 • Letter: 1
Question
10-A 12 month budget that rolls forward one month as the current month is completed is a continuous budget. 11-The difference between the actual variable overhead cost incurred during a period and the standard cost that should have been incurred based on the actual activity of the period is a variable overhead efficiency variance rate standard by the actual output. units 13-Equivalent production expresses all activity of the period in terms of partially completed 14-A production budget is most important for retail stores. 15-Sales budgets are prepared before production budgets 16-A favorable labor efficiency variance could result from using higher quality materials that result in fewer inspections. 17-A favorable labor rate variance could result from lower wage workers quitting 18-If variable manufacturing overhead is applied based on direct labor hours and there is an unfavorable direct labor efficiency variance the variable manufacturing overhead efficiency variance will be unfavorable. 19-The budget that describes how many units must be produced in order to meet sales needs and ending inventory objective is the production budget. 20-The production budget is converted into dollars. 21-The materials usage variance uses the standard rate of materials usedExplanation / Answer
Answer 10-A True
Explanation :- A continuous budget is a 12 month budget that rolls forward one month as the current month is completed. This is advantageous in the sense that there is someone to continuously monitor the budget model.
11. True:-
Variable overhead efficiency variance measures the difference between the actual level of activity and the standard activity allowed for the actual output multiplied by variable part of predetermined overhead rate.
12. False:-
Standard quantity of materials allowed is calculated by multiplying Unit Standard quantity of direct material with the actual output.
14. False
A production budget is most important for manufacturing firms and not the retail stores.
15. True
Sales budget is prepared before a production budget since the production budget needs the expected sales units figures which is provided by sales budget.
16. True
A favorable labor efficiency variance can arise owing to several reasons such as better supervision, good quality materials etc, hence given statement is true.
17. False
Lower wage worker quitting would not result in favorable labor rate variance, rather it would cause an adverse labor rate variance.
18.True
The given statement is true
19. True
A production budget finds out the number of units of products that need to be manufactured in order to meet the sales budget and to have desired number of units of inventory on hand.
20. False
The production budgets calculates the number of units. It does not translate its production requirements into dollars.
21. True
Material usage variance is calculated by multiplying standard price with the difference of actual quantity and standard quantity
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