FAC Finance and Accounting Budgeting & Cost Management 4

Question 1

Kaizen costing differs from standard costing primarily because kaizen costing:

Accepted Answer

Focuses on continuous, incremental cost reduction during the production phase

Answer

Kaizen costing emphasizes ongoing incremental improvements to reduce costs during manufacturing, whereas standard costing sets a fixed benchmark for a period.

Question 2

When using the high-low method to separate mixed costs, which two data points are selected?

Accepted Answer

The periods with the highest and lowest activity levels

Answer

The high-low method uses the periods with the highest and lowest activity levels to estimate variable and fixed cost components.

Question 3

A sales volume variance measures the impact of:

Accepted Answer

Selling a different quantity than budgeted, at standard contribution margin

Answer

The sales volume variance isolates the profit effect of selling more or fewer units than budgeted, valued at the standard contribution margin per unit.

Question 4

Which of the following best describes 'throughput costing' as used in the theory of constraints?

Accepted Answer

Only direct materials are treated as truly variable; all other costs are treated as fixed period costs

Answer

Throughput costing treats only direct materials as a variable product cost; labor and overhead are considered fixed operating expenses for the period.

Question 5

A company has a $200,000 unfavorable fixed overhead volume variance. The most likely cause is:

Accepted Answer

Actual production was less than the standard volume used to set the overhead rate

Answer

An unfavorable volume variance occurs when actual output is below the denominator volume assumed when computing the predetermined fixed overhead rate.

(FAC) Finance and Accounting Certification Practice Test

(FAC) Finance and Accounting Certification Practice Test

FAC Finance and Accounting Budgeting & Cost Management 4