A306 EXAM 3 UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
Question:
1. Which variances require the Master (Planning) Budget to calculate?
A)Total Profit Variance and Sales Volume Variance
B) Total Profit Variance and All Variable Cost variances
C) Sale Volume Variance and Sales Price Variance
D) Sales Price Variance and Fixed Cost Spending Variance
E) All Variable Cost Variances and Fixed Cost Variances
Answer:
A)Total Profit Variance and Sales Volume Variance
Question:
2. Which statement is true regarding budgets and budget variances?
A) If sales volume exceeds expectations, actual profit will always be higher than budgeted profit
B) For most organizations, a budget is the benchmark for evaluating actual performance
C) A variance is the difference between a budgeted amount and a forecasted amount
D) Any profit difference between the master and flexible budgets is due solely to the difference between
budgeted and actual sales price
E) A budget reconciliation is a report that uses variances to reconcile the difference between master budget
profit and the flexible budget profit
Answer:
B) For most organizations, a budget is the benchmark for evaluating actual performance
Question:
3. Master Budget Formula
Answer:
Budgeted Quantity * Budgeted Price (BQ*BP)
Question:
4. Flexible Budget Formula
Answer:
Actual Quantity x Budgeted Price (AQxBP)
Question:
5. Actual Budget Formula
Answer:
Actual Quantity * Actual Price (AQ * AP)
, Question:
6. Budgeted selling price per unit : $10 Actual Selling price/unit : $12 Flexible Budget Sales: $24,000
What is sales price variance?
A) 4800 F
B) 4800 U
C) 4000 U
D) 4000 F
E) None of the above
Answer:
A) 4800 F
Question:
7. Towne Snow cost formula for vehicle operating cost is $1470/month (BP) plus $399/snow day.
November, planned activity was 13 snow days (BQ), but actual activity was 9 snow days (AQ). Actual
vehicle operating cost/month was $5230 (AP). Vehicle operating cost in fleixble budget in Nov would be:
A)6657
B)5230
C)4609
D)5061
E) None
Answer:
D) 5061
Question:
8. Tavaras has lost their budget info. They found a report with varaiances and other info. Paper shows
Tavatas had actual NOI of 4673. Activity Variance NOI $332 F and the price variance for NOI was $78 U.
Determine flexible NOI, Budgeted NOI and Profit Variance for this scenario
Answer:
Flexible NOI — 4673 + 78 = 4751
Budgeted NOI — 4751-332= 4419
Prof Variance — 4419 - 4673= 254 F
Question:
9. David estmiates he pays 70% of his accounts payable in the month of purchase, 20% in the month
following the purchase and 10% in the month thereafter. Below is the info about expected purchases for
the next 6 months
Jan - 80000 Feb - 95000 Mar - 90000 Apr - 110000 May - 115000 Jun - 90000
What is Budgeted CF for June?
A) 90000
B) 63000
C) 97000
D) 86000
E) None
Answer:
C) 97,000
Question:
10. Budgets use a set of assumptions, specify goals and how to achieve them for a _____ time period
CORRECT ANSWERS
Question:
1. Which variances require the Master (Planning) Budget to calculate?
A)Total Profit Variance and Sales Volume Variance
B) Total Profit Variance and All Variable Cost variances
C) Sale Volume Variance and Sales Price Variance
D) Sales Price Variance and Fixed Cost Spending Variance
E) All Variable Cost Variances and Fixed Cost Variances
Answer:
A)Total Profit Variance and Sales Volume Variance
Question:
2. Which statement is true regarding budgets and budget variances?
A) If sales volume exceeds expectations, actual profit will always be higher than budgeted profit
B) For most organizations, a budget is the benchmark for evaluating actual performance
C) A variance is the difference between a budgeted amount and a forecasted amount
D) Any profit difference between the master and flexible budgets is due solely to the difference between
budgeted and actual sales price
E) A budget reconciliation is a report that uses variances to reconcile the difference between master budget
profit and the flexible budget profit
Answer:
B) For most organizations, a budget is the benchmark for evaluating actual performance
Question:
3. Master Budget Formula
Answer:
Budgeted Quantity * Budgeted Price (BQ*BP)
Question:
4. Flexible Budget Formula
Answer:
Actual Quantity x Budgeted Price (AQxBP)
Question:
5. Actual Budget Formula
Answer:
Actual Quantity * Actual Price (AQ * AP)
, Question:
6. Budgeted selling price per unit : $10 Actual Selling price/unit : $12 Flexible Budget Sales: $24,000
What is sales price variance?
A) 4800 F
B) 4800 U
C) 4000 U
D) 4000 F
E) None of the above
Answer:
A) 4800 F
Question:
7. Towne Snow cost formula for vehicle operating cost is $1470/month (BP) plus $399/snow day.
November, planned activity was 13 snow days (BQ), but actual activity was 9 snow days (AQ). Actual
vehicle operating cost/month was $5230 (AP). Vehicle operating cost in fleixble budget in Nov would be:
A)6657
B)5230
C)4609
D)5061
E) None
Answer:
D) 5061
Question:
8. Tavaras has lost their budget info. They found a report with varaiances and other info. Paper shows
Tavatas had actual NOI of 4673. Activity Variance NOI $332 F and the price variance for NOI was $78 U.
Determine flexible NOI, Budgeted NOI and Profit Variance for this scenario
Answer:
Flexible NOI — 4673 + 78 = 4751
Budgeted NOI — 4751-332= 4419
Prof Variance — 4419 - 4673= 254 F
Question:
9. David estmiates he pays 70% of his accounts payable in the month of purchase, 20% in the month
following the purchase and 10% in the month thereafter. Below is the info about expected purchases for
the next 6 months
Jan - 80000 Feb - 95000 Mar - 90000 Apr - 110000 May - 115000 Jun - 90000
What is Budgeted CF for June?
A) 90000
B) 63000
C) 97000
D) 86000
E) None
Answer:
C) 97,000
Question:
10. Budgets use a set of assumptions, specify goals and how to achieve them for a _____ time period
