CBS Performance Measurement & Variance Analysis 3

Question 1

A budget specialist notices that the materials price variance is $15,000 unfavorable. Which action is most appropriate first?

Accepted Answer

Investigate the cause, such as supplier price increases or purchasing inefficiencies

Answer

Before taking corrective action, the specialist must determine the root cause of the unfavorable materials price variance to recommend an appropriate response.

Question 2

What does a balanced scorecard framework measure beyond financial performance?

Accepted Answer

Customer, internal process, and learning & growth perspectives in addition to financial metrics

Answer

The balanced scorecard integrates financial metrics with customer satisfaction, internal business process efficiency, and organizational learning to provide a comprehensive performance view.

Question 3

Which variance is calculated as (Actual Price – Standard Price) × Actual Quantity?

Accepted Answer

Materials price variance

Answer

The materials price variance isolates the effect of paying a different price per unit than the standard, multiplied by the actual quantity purchased.

Question 4

In governmental budgeting, an encumbrance system is used primarily to:

Accepted Answer

Reserve budget authority for anticipated expenditures before payment is made

Answer

Encumbrances set aside budget funds when a purchase order or contract is issued, preventing over-spending before the actual invoice is paid.

Question 5

Which performance metric is calculated by dividing actual output by budgeted output and expressing it as a percentage?

Accepted Answer

Volume achievement ratio

Answer

The volume achievement ratio (actual output ÷ budgeted output × 100) shows how closely the organization met its planned production or service delivery targets.

(CBS) Certified Budget Specialist Practice Test

(CBS) Certified Budget Specialist Practice Test

CBS Performance Measurement & Variance Analysis 3