ACC 241 Exam #3 Test Questions And
All Correct Answers.
Which of the following alternatives reflects the proper order of preparing components of the
master budget?
1. Production budget
2. Sales budget
3. Direct materials budget - Answer a. 2, 3, 1
b. 1, 3, 2
*c. 2, 1, 3
d. 3, 1, 2
Which of the following is a potential disadvantage of participative budgeting? - Answer *a.
Managers may build slack into the budget
b. Managers are more likely to be motivated by budgets they helped to create
c. Managers should have more detailed knowledge for creating realistic budgets
d. None of the above
Dallas Company has an unfavorable materials price variance. Which of the following would be
the least likely reason for this variance? - Answer a. The company purchased a higher quality
material than was budgeted.
b. The company did not take advantage of purchase discounts.
* c. The company used more material than was budgeted for in each unit.
d. The company under budgeted the standard price for materials.
e. The company hired unemployable University of Arizona supply chain majors (students).
A > S - Answer Unfavorable
All of the following are true except - Answer a. A favorable labor efficiency variance could
result from using higher quality materials that
result in fewer inspections.
*b. A favorable labor rate variance could result from lower wage workers quitting and
All Correct Answers.
Which of the following alternatives reflects the proper order of preparing components of the
master budget?
1. Production budget
2. Sales budget
3. Direct materials budget - Answer a. 2, 3, 1
b. 1, 3, 2
*c. 2, 1, 3
d. 3, 1, 2
Which of the following is a potential disadvantage of participative budgeting? - Answer *a.
Managers may build slack into the budget
b. Managers are more likely to be motivated by budgets they helped to create
c. Managers should have more detailed knowledge for creating realistic budgets
d. None of the above
Dallas Company has an unfavorable materials price variance. Which of the following would be
the least likely reason for this variance? - Answer a. The company purchased a higher quality
material than was budgeted.
b. The company did not take advantage of purchase discounts.
* c. The company used more material than was budgeted for in each unit.
d. The company under budgeted the standard price for materials.
e. The company hired unemployable University of Arizona supply chain majors (students).
A > S - Answer Unfavorable
All of the following are true except - Answer a. A favorable labor efficiency variance could
result from using higher quality materials that
result in fewer inspections.
*b. A favorable labor rate variance could result from lower wage workers quitting and
