BEC Cost Accounting and Management Accounting 2

Question 1

Which type of budget is adjusted to reflect the actual level of activity achieved during a period?

Accepted Answer

Flexible budget

Answer

A flexible budget is adjusted to reflect different levels of activity, making it useful for performance evaluation at the actual output level achieved.

Question 2

The standard cost for direct materials is $5.00 per unit and the actual cost was $5.50 per unit. This results in a:

Accepted Answer

Unfavorable price variance

Answer

Since the actual cost ($5.50) exceeds the standard cost ($5.00) per unit, there is an unfavorable direct materials price variance.

Question 3

A favorable direct labor efficiency variance indicates that:

Accepted Answer

Actual hours worked were less than standard hours allowed

Answer

A favorable direct labor efficiency variance means actual hours worked were less than the standard hours allowed for actual production, indicating efficient use of labor.

Question 4

Which component of the master budget is typically prepared first?

Accepted Answer

Sales budget

Answer

The sales budget is prepared first because all other operating budgets (production, purchases, labor, overhead) depend on projected sales volume.

Question 5

The overhead spending variance measures the difference between:

Accepted Answer

Actual overhead and flexible budget overhead

Answer

The overhead spending variance is the difference between actual overhead incurred and the flexible budget allowance for overhead at the actual activity level.

BEC - Business Environment and Concepts Practice Test

BEC - Business Environment and Concepts Practice Test

BEC Cost Accounting and Management Accounting 2