control and performance evaluation

8/20/2019 Control and Performance Evaluation

http://slidepdf.com/reader/full/control-and-performance-evaluation 1/83

PART 3C

CONTROL AND PERFORMANCE

EVALUATION

291 Questions

[1] Source: CMA 0691 3-21The four categories of cost associated with product ua!it"costs are

A# $%ter&a! fai!ure' i&ter&a! fai!ure' pre(e&tio&' a&dcarr"i&g#

)# $%ter&a! fai!ure' i&ter&a! fai!ure' pre(e&tio&' a&dappraisa!#

C# *arra&t"' product !ia+i!it"' trai&i&g' a&d appraisa!#

,# *arra&t"' product !ia+i!it"' pre(e&tio&' a&dappraisa!#

[2] Source: CMA 0691 3-23

The cost of scrap' rewor' a&d too!i&g cha&ges i& aproduct ua!it" cost s"ste. are categori/ed as a&

A# $%ter&a! fai!ure cost#

)# &ter&a! fai!ure cost#

C# Trai&i&g cost#

,# re(e&tio& cost#

[3] Source: CMA 1292 3-24Charter Stores is ope&i&g a depart.e&t store i& a &ewsu+ur+a& .a!! a&d p!a&s to hire .a&" &ew sa!es c!ers# Thea(erage sa!es per c!er at Charter5s other stores is 32'000

per .o&th' a&d the co.pa&" is i&(estigati&g wa"s toi&crease this a(erage at the &ew store# Curre&t!"' Charterpa"s a +egi&&i&g sa!es c!er 1'700 per .o&th with a 108i&crease after 6 .o&ths if sa!es eua! or e%ceed thea(erage# *hich o&e of the fo!!owi&g co.pe&satio& p!a&s is.ost !ie!" to e&courage &ew sa!es c!ers to i&crease theira(erage .o&th!" sa!es to 37'000 or greater

A# 1'700 per .o&th with a 178 i&crease after 6.o&ths if sa!es eua! or e%ceed the a(erage#

)# A 6#78 co..issio& o& a!! sa!es with &o +asesa!ar"#

C# 1'200 per .o&th p!us a 38 co..issio& o& a!!sa!es#

,# 1'470 per .o&th with a 108 i&crease after 6.o&ths if sa!es eua! or e%ceed the a(erage#

[] Source: CA 11; -11*hich of the fo!!owi&g state.e&ts +est descri+es there!atio&ship +etwee& p!a&&i&g a&d co&tro!!i&g

A# !a&&i&g !oos to the future< co&tro!!i&g isco&cer&ed with the past#

)# !a&&i&g a&d co&tro!!i&g are co.p!ete!"i&depe&de&t of each other#

C# !a&&i&g pre(e&ts pro+!e.s< co&tro!!i&g is i&itiated

+" pro+!e.s which ha(e occurred#

,# Co&tro!!i&g ca&&ot operate effecti(e!" without thetoo!s pro(ided +" p!a&&i&g#

[7] Source: CA 11; -12*hich of the fo!!owi&g o+ser(atio&s co&cer&i&g ua!it"co&tro! is .ore accurate

A# rocess ua!it" co&tro! is used whe& e%a.i&i&g theua!it" of goods or ser(ices which a!read" e%ist#

)# rocess ua!it" co&tro! is used to pre(e&t defects'whereas product ua!it" co&tro! is used pri.ari!" toide&tif" defects after the fact#

C# roduct ua!it" co&tro! is desig&ed to +a!a&ce the.areta+i!it" of higher ua!it" agai&st the cost ofattai&i&g higher ua!it"#

,# roduct ua!it" co&tro! is .ore i.porta&t tha&process ua!it" co&tro!#

[6] Source: CA 079 -73*hich state.e&t +est descri+es Tota! =ua!it" Ma&age.e&tT=M

A# T=M e.phasi/es reduci&g the cost of i&spectio&#

)# T=M e.phasi/es participatio& +" a!! e.p!o"ees i&the decisio&-.ai&g process#

C# T=M e.phasi/es e&couragi&g cross-fu&ctio&a!tea.wor#

,# T=M e.phasi/es doi&g each >o+ right the firstti.e#

[4] Source: CA 07;7 -16re(e&ti(e i&ter&a! co&tro! is afforded whe& s.a!! too!s a&deuip.e&t are

A# Secured i& a s.a!!-too!-a&d-euip.e&t cri+ area#

)# ?euisitio&ed +" the user perso&&e!#

C# ?ecorded i&di(idua!!" o& recei(i&g reports#

,# @sed +" o&e depart.e&t at a ti.e#

[;] Source: CA 07;7 -2;*hich of the fo!!owi&g is &ot i.p!ied +" the defi&itio& ofco&tro!

A# @&co(eri&g of de(iatio&s fro. p!a&s#

)# Assig&.e&t of respo&si+i!it" for de(iatio&s#

C# &dicatio& of the &eed for correcti(e actio&#

,# e!p pre(e&t !oss#

[9] Source: CA 11;7 -10The use of fi&a&cia! state.e&t a&a!"sis' ua!it" co&tro!procedures' a&d e.p!o"ee perfor.a&ce e(a!uatio&s are a!!e%a.p!es of

A# Co&curre&t co&tro!s#

)# Beed+ac co&tro!s#

C# Beedforward co&tro!s#

,# re(e&ti(e co&tro!s#



[10] Source: CA 11;6 -13f the fo!!owi&g' the t"pe of co&tro!s that are ofte& difficu!tto audit +ecause of the !ac of criteria or sta&dards are

A# re(e&ti(e co&tro!s#

)# Bi&a&cia! co&tro!s#

C# Correcti(e co&tro!s#

,# perati&g co&tro!s#

[11] Source: CA 11;6 -1& a dia.o&d-cutti&g operatio&' the .ost cost-effecti(eco&tro!s wou!d +e

A# re(e&ti(e co&tro! esta+!ishi&g specific sta&dardsfor raw .ateria!s#

)# Correcti(e co&tro! rep!aci&g or repairi&g defecti(eite.s prior to ship.e&t#

C# ,etecti(e co&tro! i&creasi&g the !e(e! ofi&spectio&#

,# Beed+ac co&tro! .o&itori&g fi&a! resu!ts a&dreporti&g de(iatio&s#

[12] Source: CA 11;4 -9Certai& t"pes of co&tro! are +etter suited to specific !e(e!si& the orga&i/atio&# A co.pa&" has a wee!" co&tro! reportthat detai!s .ateria! wastage# This t"pe of co&tro! is +estsuited to which orga&i/atio&a! !e(e!

A# Top .a&age.e&t#

)# Midd!e .a&age.e&t#

C# Birst-!i&e .a&age.e&t#

,# Do&-.a&ageria! e.p!o"ees#

[13] Source: CA 11;4 -10)udgetar" co&tro! sets a &u.erica! sta&dard of resu!ts to +eachie(ed withi& a& orga&i/atio&# )udgetar" co&tro! isc!assified as

A# A& operati&g co&tro!#

)# A process co&tro!#

C# A& adapti(e co&tro!#

,# A feedforward co&tro!#

[1] Source: CA 11;9 -1*hich of the fo!!owi&g situatio&s co&tai&s the three +asice!e.e&ts of co&tro!

A# !a&t .a&agers .ust set a&&ua! goa!s for reduci&gscrap !oss# The" issue .o&th!" scrap !oss reports tothe (ice preside&t of .a&ufacturi&g' who .o&itors!osses a&d fo!!ows up to e&sure that each p!a&t.a&ager is tai&g appropriate actio& to .eet hisEhergoa!s# !a&t .a&agers recei(e a +o&us if the" reduce!osses +e!ow the esta+!ished goa!#

)# ,ata e&tr" operators .ust e" data at the rate offi(e docu.e&ts per .i&ute after the" ha(e co.p!eted

trai&i&g# The i&put rate of each operator isauto.atica!!" .o&itored +" the co.puter s"ste.#perators who fa!! +e!ow the sta&dard .a" +eretrai&ed or ter.i&ated at the discretio& of the data

e&tr" super(isor#

C# A!! e.p!o"ees recei(e a +o&us of 28 of theira&&ua! sa!ar" if rewored productio& is reduced at!east 78 co.pa&"-wide fro. the pre(ious ca!e&dar"ear#

,# ?ecords of retur&ed .ercha&dise wi!! +e recorded+" each store .a&ager o& a for.# This for. cites thereaso& for the retur&' the do!!ar a.ou&t of the sa!e'the t"pe of .ercha&dise retur&ed' the date ofpurchase' a&d the co&ditio& of retur&ed .ercha&dise#&e cop" of this for. is se&t to the regio&a! a&dho.e offices each .o&th#

[17] Source: CA 1190 -)ecause of (u!&era+i!it" to fraud' the trust depart.e&t of a+a& reuired that a& officer other tha& the trust officer(erif" i&co.e distri+utio& orders a&d sig& dis+urse.e&tchecs# *hich t"pe of co&tro! is t"pified +" suchsegregatio& of duties

A# &put#

)# Auditi&g#

C# perati&g#

,# utput#

[16] Source: CA 1190 -13 A &ew auditor is +ei&g +riefed o& (arious t"pes of audits +"the audit super(isor# The super(isor states that so.e areaswithi& the orga&i/atio& are .ore difficu!t to audit +ecausethe co&tro!s ordi&ari!" are &ot as c!ear!" defi&ed as i& otherdepart.e&ts# Se!ect the t"pe of co&tro! that is usua!!" .ostdifficu!t to assess#

A# peratio&a!#

)# Accou&ti&g#

C# h"sica! securit"#

,# &put#

[14] Source: CA 1190 -1 A co.pa&" is e%perie&ci&g a high !e(e! of custo.er retur&sfor a particu!ar product +ecause it does &ot .eet the rigiddi.e&sio&s reuired# $ach retur& is rewored o& a .i!!i&g.achi&e a&d se&t +ac through a!! of the su+seue&tfi&ishi&g steps# This is a cost!" process# de&tif" the +est.ethod for reduci&g the ua!it" fai!ure costs#

A# Custo.er sur(e"s#

)# &creased fi&ished goods i&spectio&s#

C# ,efect pre(e&tio&#

,# &creased wor-i&-process i&spectio&s#

[1;] Source: CA 0791 -17*hat is the u!ti.ate o+>ecti(e of .a&ageria! co&tro!

A# To foresta!! .a&age.e&t fraud#

)# To protect assets#

C# To pro.ote orga&i/atio&a! effecti(e&ess#

,# To i.p!e.e&t p!a&s#



[19] Source: CA 0791 -16Ma&ageria! co&tro! ca& +e di(ided i&to feedforward a&dfeed+ac co&tro!s# *hich of the fo!!owi&g is a& e%a.p!e ofa feed+ac co&tro!

A# =ua!it" co&tro! trai&i&g#

)# Borecasti&g i&(e&tor" &eeds#

C# Faria&ce a&a!"sis#

,# ?estricti&g access to co.puter data +" assig&i&gpasswords#

[20] Source: CA 0791 -3Beedforward co&tro!s are (er" i.porta&t to .a&age.e&t+ecause the"

A# Suggest correcti(e actio&s &eeded whe&de(iatio&s occur#

)# Assist .a&age.e&t i& a&ticipati&g pro+!e.s#

C# Are the .ost eco&o.ica! for. of co&tro!#

,# A!!ow .a&age.e&t to e(a!uate productio& as itprogresses#

[21] Source: CA 1192 -14*he& a !arge rush order for o&e of a co.pa&"5s productshas +ee& .ade' the purchasi&g a&d productio& .a&agersare i..ediate!" &otified of the sa!e a&d its ter.s# *hatt"pe of co&tro! is e%hi+ited i& this sce&ario

A# Beed+ac#

)# Strategic#

C# =ua!it"#

,# Beedforward#

[22] Source: CA 1191 -11The operatio&s .a&ager of a co.pa&" &otified thetreasurer of that orga&i/atio& 60 da"s i& ad(a&ce that a&ew' e%pe&si(e piece of .achi&er" was goi&g to +epurchased# This &otificatio& a!!owed the treasurer to .aea& order!" !iuidatio& of so.e of the co.pa&"5s i&(est.e&tportfo!io o& fa(ora+!e ter.s# *hat t"pe of co&tro! wasi&(o!(ed

A# Beed+ac#

)# Strategic#

C# )udgetar"#

,# Beedforward#

[23] Source: CA 0792 -14 As part of a Tota! =ua!it" Co&tro! progra.' a fir. &ot o&!"i&spects fi&ished goods +ut a!so .o&itors product retur&sa&d custo.er co.p!ai&ts# *hich t"pe of co&tro! +estdescri+es these efforts

A# Beed+ac co&tro!#

)# Beedforward co&tro!#

C# roductio& co&tro!#

,# &(e&tor" co&tro!#

[2] Source: CA 1191 -10To +e successfu!' !arge co.pa&ies .ust de(e!op .ea&s toeep the orga&i/atio& focused i& the proper directio&#rga&i/atio&a! co&tro! s"ste.s he!p eep co.pa&iesfocused# These co&tro! s"ste.s co&sist of which three +asicco.po&e&ts

A# )udgeti&g' fi&a&cia! ratio a&a!"sis' a&d cash.a&age.e&t#

)# +>ecti(es' sta&dards' a&d a& e(a!uatio&-rewards"ste.#

C# ?o!e a&a!"sis' tea. +ui!di&g' a&d sur(e" feed+ac#

,# Setti&g goa!s' e.poweri&g e.p!o"ees' a&d >o+e&rich.e&t#

[27] Source: CA 0792 -1; A productio& !i&e worer ra&do.!" se!ects 10 ite.s'.easures their !e&gth' co.putes the sa.p!e a(erage' the&p!ots the resu!t o& a co&tro! chart that i&c!udes upper a&d

!ower co&tro! !i.its# This acti(it" is perfor.ed hour!"throughout the da" for a report prepared at the e&d of the.o&th# A f!aw i& this co&tro! process is

A# The sa.p!e si/e is too s.a!!#

)# There is &o co&tro! sta&dard#

C# There is &o pro(isio& for ti.e!" correcti(e actio&#

,# The worer shou!d &ot +e the o&e to .ae the.easure.e&ts#

[26] Source: CA 11;7 -11The sta&dards used +" shoe .a&ufacturers to deter.i&e

si/e categories are +est c!assified as

A# $%ter&a! sta&dards#

)# $&gi&eered sta&dards#

C# roducti(it" sta&dards#

,# $fficie&c" sta&dards#

[24] Source: CA 11;7 -13*hich o&e of the fo!!owi&g is the +est o+>ecti(eperfor.a&ce criterio& for a& e!ectrica! e&gi&eer

A# $%hi+itio& of creati(e ta!e&ts o& co.pa&" pro>ects#

)# ro>ect co.p!etio& withi& +udget co&strai&ts#

C# A+i!it" to wor we!! with fe!!ow e&gi&eers o&pro>ects#

,# A!! a&swers are correct#

[2;] Source: CA 07;; -12erfor.a&ce appraisa! s"ste.s .ight use a&" of threediffere&t approaches: 1 who did the >o+' 2 how the >o+was do&e' or 3 what was acco.p!ished# *hich approachis used +" a s"ste. that p!aces the focus o& how the >o+was do&e

A# )eha(ior-orie&ted#

)# Goa!-orie&ted#



C# Trait-orie&ted#

,# $.p!o"ee-orie&ted#

[29] Source: CA 0792 -4de&tif" the .a&age.e&t tech&iue i& which e.p!o"eesassist i& setti&g goa!s' .ai&g decisio&s' so!(i&g pro+!e.s'a&d desig&i&g a&d i.p!e.e&ti&g orga&i/atio&a! cha&ges#

A# Tota! ua!it" co&tro!#

)# Ho+ e&!arge.e&t#

C# Ia&+a&#

,# articipati(e .a&age.e&t#

[30] Source: CMA 069 3-14 A& e%a.p!e of a& i&ter&a! fai!ure cost is

A# Mai&te&a&ce#

)# &spectio&#

C# ?ewor#

,# roduct reca!!s#

[31] Source: CMA 1297 3-13The cost of scrap' rewor' a&d too!i&g cha&ges i& aproduct ua!it" cost s"ste. are categori/ed as a&

A# $%ter&a! fai!ure cost#

)# &ter&a! fai!ure cost#

C# re(e&tio& cost#

,# Appraisa! cost#

[32] Source: CA 0792 F-11Costs that ca& +e defi&ite!" i&f!ue&ced +" a gi(e& .a&agerwithi& a gi(e& ti.e spa& are +est defi&ed as

A# Co&tro!!a+!e costs#

)# eriod costs#

C# Faria+!e costs#

,# Co..itted costs#

[33] Source: CMA 0692 3-22Seg.e&ted i&co.e state.e&ts are .ost .ea&i&gfu! to.a&agers whe& the" are prepared

A# & a& a+sorptio& cost +asis#

)# & a cost +eha(ior +asis#

C# & a cash +asis#

,# & a si&g!e-step for.at#

[3] Source: CMA 0692 3-2Micro Ma&ufacturers uses a perfor.a&ce reporti&g s"ste.that co.+i&es +oth fi&a&cia! a&d &o&fi&a&cia! .easures to

e(a!uate di(isio& perfor.a&ce# A!! of the fo!!owi&g .easureoperatio&a! efficie&c" e%cept

A# perati&g !e(erage#

)# ,a"s5 sa!es i& accou&ts recei(a+!e#

C# &(e&tor" tur&o(er#

,# ?esidua! i&co.e#

[37] Source: CMA 1292 3-27erfor.a&ce reports shou!d +e for.atted a&d desig&ed to.eet orga&i/atio&a! &eeds# & this regard' perfor.a&cereports &or.a!!" i&c!ude a!! of the fo!!owi&g e%cept

A# A re!atio&ship to the orga&i/atio&a! structure#

)# $%ceptio&a! ite.s that are co&tro!!a+!e#

C# Specific ti.e hori/o&s#

,# Strategic p!a&s#

[36] Source: CMA 1292 3-2;Map!ewood &dustries wa&ts its di(isio& .a&agers toco&ce&trate o& i.pro(i&g profita+i!it"# The perfor.a&ce

e(a!uatio& .easures that are .ost !ie!" to e&courage this+eha(ior are

A# ,i(ide&ds per share' retur& o& euit"' a&d ti.esi&terest ear&ed#

)# Tur&o(er of operati&g assets' gross profit .argi&'a&d retur& o& euit"#

C# ?etur& o& operati&g assets' the curre&t ratio' a&dthe de+t-to-euit" ratio#

,# Tur&o(er of operati&g assets' di(ide&ds per share'a&d ti.es i&terest ear&ed#

[34] Source: CMA 1292 3-29Star Ma&ufacturi&g wa&ts its treasurer to focus o&i.pro(i&g the co.pa&"5s !iuidit" positio&# Theperfor.a&ce e(a!uatio& .easures that are .ost !ie!" toe&courage this +eha(ior are

A# Accou&ts recei(a+!e tur&o(er' retur& o& assets'a&d the curre&t ratio#

)# Ti.es i&terest ear&ed' retur& o& assets' a&di&(e&tor" tur&o(er#

C# &(e&tor" tur&o(er i& da"s' the curre&t ratio' a&dretur& o& euit"#

,# Accou&ts recei(a+!e tur&o(er' i&(e&tor" tur&o(er

i& da"s' a&d the curre&t ratio#

[3;] Source: CMA 0693 3-13roduct-ua!it"-re!ated costs are part of a tota! ua!it"co&tro! progra.# A product-ua!it"-re!ated cost i&curred i&detecti&g i&di(idua! products that do &ot co&for. tospecificatio&s is a& e%a.p!e of a&

A# re(e&tio& cost#

)# Appraisa! cost#

C# $%ter&a! fai!ure cost#

,# pportu&it" cost#

[Bact atter& J1]*o! Corporatio& is a high!" auto.ated .a&ufacturi&g



fir.# The (ice preside&t of fi&a&ce has decided thattraditio&a! sta&dards are i&appropriate for perfor.a&ce.easures i& a& auto.ated e&(iro&.e&t# Ka+or isi&sig&ifica&t i& ter.s of the tota! cost of productio& a&dte&ds to +e fi%ed' .ateria! ua!it" is co&sidered .orei.porta&t tha& .i&i.i/i&g .ateria! cost' a&d custo.ersatisfactio& is the &u.+er o&e priorit"# As a resu!t' de!i(er"perfor.a&ce .easures ha(e +ee& chose& to e(a!uateperfor.a&ce# The fo!!owi&g i&for.atio& is co&sideredt"pica! of the ti.e i&(o!(ed to co.p!ete orders:

ｷ *ait ti.e: - Bro. order +ei&g p!aced to start of productio& 10#0 da"s - Bro. start of productio& to co.p!etio& 7#0 da"s ｷ &spectio& ti.e 1#7 da"s ｷ rocess ti.e 3#0 da"s ｷ Mo(e ti.e 2#7 da"s

[39] Source: CMA 0693 3-14?efers to Bact atter& J1*hat is the .a&ufacturi&g c"c!e efficie&c" for this order

A# 27#08#

)# 13#68#

C# 34#78#

,# 69#28#

[0] Source: CMA 0693 3-1;?efers to Bact atter& J1*hat is the de!i(er" c"c!e ti.e for this order

A# 4 da"s#

)# 12 da"s#

C# 17 da"s#

,# 22 da"s#

[1] Source: CMA 0693 3-21

*hich o&e of the fo!!owi&g orga&i/atio&a! po!icies is .ost!ie!" to resu!t i& u&desira+!e .a&ageria! +eha(ior

A# ate! Che.ica!s spo&sors te!e(isio& co(erage ofcricet .atches +etwee& &atio&a! tea.s represe&ti&g&dia a&d aista&# The e%pe&ses of such .ediaspo&sorship are &ot a!!ocated to its (arious di(isio&s#

)# Hoe *a!' the chief e%ecuti(e officer of $ag!e

?oc )rewer"' wrote a .e.ora&du. to hise%ecuti(es stati&g' Lperati&g p!a&s are co&tracts a&dthe" shou!d +e .et without fai!#L

C# The +udgeti&g process at Madse& Ma&ufacturi&gstarts with operati&g .a&agers pro(idi&g goa!s fortheir respecti(e depart.e&ts#

,# Bu!!+right Kighti&g ho!ds uarter!" .eeti&gs ofdepart.e&ta! .a&agers to co&sider possi+!e cha&gesi& the +udgeted targets due to cha&gi&g co&ditio&s#

[2] Source: CMA 0693 3-2;*hich o&e of the fo!!owi&g wi!! &ot occur i& a& orga&i/atio&that gi(es .a&agers throughout the orga&i/atio& .a%i.u.

freedo. to .ae decisio&s

A# Cause i&di(idua! .a&agers to regard the .a&agersof other seg.e&ts as the" do e%ter&a! parties#

)# $&courage .ore effecti(e so!utio&s to operatio&a!pro+!e.s#

C# $!i.i&ate ha(i&g two di(isio&s of the orga&i/atio&with co.peti&g .ode!s#

,# ?educe the de!a"s i& securi&g appro(a! for thei&troductio& of &ew products#

[3] Source: CMA 0693 3-30*hich o&e of the fo!!owi&g state.e&ts pertai&i&g toperfor.a&ce .easure.e&t a&d +eha(ior is i&correct

A# The use of residua! i&co.e to .easure di(isio&a!perfor.a&ce ca& cause goa! co&grue&ce pro+!e.s forcorporatio&s with di(isio&s that ha(e u&eua!operati&g asset +ases#

)# The !ac of co..it.e&t o& the part of top.a&age.e&t ca& tur& +udgets i&to ritua!istic e%erciseswithout sig&ifica&ce#

C# A& orga&i/atio& usi&g .easures such as growth i&

.aret share' i&creases i& producti(it"' a&dthroughput ti.e' i& additio& to (arious fi&a&cia! ratios'is re!"i&g o& a .ore +a!a&ced approach toperfor.a&ce e(a!uatio&#

,# The de(e!op.e&t of i&for.atio& tech&o!og" i& the1990s ca& per.it orga&i/atio&s to do awa" withfeed+ac i& the desig& of .a&age.e&t co&tro!s"ste.s#

[] Source: CMA 069 3-16& "ear 2' a .a&ufacturi&g co.pa&" i&stituted a tota! ua!it".a&age.e&t T=M progra. produci&g the fo!!owi&greport:

Su..ar" Cost of =ua!it" ?eport i& thousa&ds ear 1 ear 2 8 Cha&ge ------ ------ --------re(e&tio& costs 200 300 N70 Appraisa! costs 210 317 N70&ter&a! fai!ure costs 190 11 -0$%ter&a! fai!ure costs 1'200 621 -; ------ ------ -------- Tota! ua!it" costs 1';00 1'370 -27 OOOOOO OOOOOO& the +asis of this report' which o&e of the fo!!owi&gstate.e&ts is .ost !ie!" correct

A# A& i&crease i& co&for.a&ce costs resu!ted i& ahigher ua!it" product a&d therefore resu!ted i& a

decrease i& &o&-co&for.a&ce costs#

)# A& i&crease i& i&spectio& costs was so!e!"respo&si+!e for the decrease i& ua!it" costs#

C# =ua!it" costs such as scrap a&d rewor decreased+" ;8#

,# =ua!it" costs such as retur&s a&d repairs u&derwarra&t" decreased +" 08#

[7] Source: CMA 1297 3-12The four categories of costs associated with product ua!it"costs are

A# $%ter&a! fai!ure' i&ter&a! fai!ure' pre(e&tio&' a&dcarr"i&g#

)# $%ter&a! fai!ure' i&ter&a! fai!ure' pre(e&tio&' a&d



appraisa!#

C# $%ter&a! fai!ure' i&ter&a! fai!ure' trai&i&g' a&dappraisa!#

,# *arra&t"' product !ia+i!it"' trai&i&g' a&d appraisa!#

[6] Source: CMA 0696 3-7The process of de(e!opi&g p!a&s for a co.pa&"5s e%pectedoperatio&s a&d co&tro!!i&g the operatio&s to he!p carr" outthose p!a&s is

A# repari&g a period +udget#

)# repari&g a .aster +udget#

C# )udgetar" co&tro!#

,# articipati(e +udgeti&g#

[4] Source: CMA 1296 3-22The cost of scrap' rewor' a&d too!i&g cha&ges i& aproduct ua!it" cost s"ste. is categori/ed as a&

A# Trai&i&g cost#

)# $%ter&a! fai!ure cost#

C# &ter&a! fai!ure cost#

,# re(e&tio& cost#

[;] Source: u+!isherThe steps i& a t"pica! co&tro! process i&c!ude

1# Se!ecti&g strategic co&tro! poi&ts at which to gather i&for.atio& a+out acti(ities +ei&g perfor.ed2# Accu.u!ati&g' c!assif"i&g' a&d recordi&g data sa.p!es

3# +ser(i&g the wor or co!!ecti&g sa.p!es of data# ,eter.i&i&g whether perfor.a&ce is satisfactor"7# ?e(iewi&g a&d re(isi&g sta&dards6# ?eporti&g sig&ifica&t de(iatio&s to .a&agers co&cer&ed*hat is the correct order of these steps

A# 1' 3' 2' ' 6' 7#

)# 1' 2' 3' ' 7' 6#

C# 1' 3' ' 2' 6' 7#

,# 1' 3' ' 2' 7' 6#

[9] Source: u+!isher*hich of the fo!!owi&g is a& e%a.p!e of a feed+acco&tro!

A# re(e&ti(e .ai&te&a&ce#

)# &spectio& of co.p!eted goods#

C# C!ose super(isio& of productio&-!i&e worers#

,# Measuri&g perfor.a&ce agai&st a sta&dard#

[70] Source: u+!isherCo&tro! de(ices .a" +e

=ua&titati(e =ua!itati(e ------------ ----------- A#

es es )#

es Do C#

Do es ,#

Do Do

[71] Source: u+!isher*hich of the fo!!owi&g state.e&ts regardi&g effecti(eco&tro! s"ste.s is fa!se

A# $%cessi(e co&tro!s are cost!" i& ti.e a&d .o&e"#

)# utdated i&for.atio& is i&appropriate#

C# Co&tro!s shou!d .easure the perfor.a&ce of a!!areas#

,# Co&tro!s shou!d +e si.p!e#

[72] Source: u+!ishers $?T a&a!"sis a co&tro! too! or a p!a&&i&g too!

!a&&i&g Co&tro! -------- ------- A#

es Do

)#

es es C#

Do es

,#

Do Do

[73] Source: u+!isher)e&efits of e.p!o"ee participatio& i& the desig& of co&tro!s"ste.s i&c!ude a!! of the fo!!owi&g e%cept

A# ,e(e!op.e&t of a perceptio& +" those +ei&ge(a!uated that the process is fair#

)# Co..u&icatio& to e(er"o&e i&(o!(ed of the &eedfor co&tro!#

C# $&ha&ced accepta&ce of the &eed for co&tro!

sta&dards#

,# $asier i.p!e.e&tatio& of the sta&dards +ei&g usedi& other di(isio&s#

[7] Source: CA 11;; F-71)udgets are a &ecessar" co.po&e&t of fi&a&cia! decisio&.ai&g +ecause the" he!p pro(ide a&

A# $fficie&t a!!ocatio& of resources#

)# Mea&s to use a!! the fir.5s resources#

C# Auto.atic correcti(e .echa&is. for errors#

,# Mea&s to chec .a&ageria! discretio&#

[77] Source: CA 07;9 F-13



*hich of the fo!!owi&g is the pri&cipa! ad(a&tage of+udgeti&g

A# $.p!o"ee .oti(atio&#

)# erfor.a&ce e(a!uatio&#

C# Borced p!a&&i&g#

,# Co..u&icatio&#

[76] Source: CA 07;6 -17 A +a& has cha&ged fro. a s"ste. i& which !i&es arefor.ed i& fro&t of each te!!er to a o&e-!i&e' .u!tip!e-ser(ers"ste.# *he& a te!!er is free' the perso& at the head of the!i&e goes to that te!!er# .p!e.e&ti&g the &ew s"ste. wi!!

A# ,ecrease the +a&5s wage e%pe&ses +ecause the&ew s"ste. uses fewer te!!ers#

)# ,ecrease ti.e custo.ers spe&d i& the !i&e#

C# &crease accurac" i& te!!er reco&ci!iatio&s at thee&d of the da" +ecause fewer custo.ers are ser(ed

+" each te!!er#

,# .pro(e o&-the->o+ trai&i&g for +a& e.p!o"ees+ecause each te!!er wi!! perfor. differe&t duties#

[74] Source: u+!isher*hich of the fo!!owi&g is the +est e%a.p!e of wh" a&e.p!o"ee wou!d resist .odif"i&g hisEher perfor.a&ce for aco&tro! s"ste.

A# The co&tro! s"ste. high!ights the thi&gs that thee.p!o"ee does we!!#

)# The e.p!o"ee +e!ie(es that the co&tro! s"ste. setsthe sta&dard of perfor.a&ce too high#

C# eop!e te&d to a(oid p!easa&t situatio&s#

,# The co&tro! s"ste. esta+!ishes a sta&dard ofperfor.a&ce that the e.p!o"ee co&siders re!e(a&t towhat she regards as their pri.ar" >o+ o+>ecti(e#

[7;] Source: u+!isher*hich of the fo!!owi&g state.e&ts regardi&g hu.a&reactio&s to feed+ac is fa!se

A# Beed+ac shou!d .oti(ate e.p!o"ees to i.pro(etheir perfor.a&ce#

)# The ti.i&g a&d co&te&t of feed+ac shou!d +e

co&sidered#

C# The &ature of feed+ac shou!d +e to i&ti.idate'rather tha& to offe&d e.p!o"ees#

,# u.a& reactio&s to feed+ac shou!d +eco&sidered i& desig&i&g co&tro! s"ste.s#

[79] Source: CMA 12;; 7-Faria+!es that are i.porta&t to the decisio&-.ai&gprocess +ut are out of the co&tro! of the decisio& .aer'e#g#' eco&o.ic co&ditio&s' are co&sidered to +e

A# $%oge&ous (aria+!es#

)# ,ecisio& (aria+!es#

C# erfor.a&ce criteria#

,# Co&strai&ts#

[60] Source: CMA 0694 3-2;Kisted +e!ow are se!ected !i&e ite.s fro. the Cost of=ua!it" ?eport for *atso& roducts for !ast .o&th#

Categor" A.ou&t--------------------- ------?ewor 427$uip.e&t .ai&te&a&ce 1'17roduct testi&g 4;6roduct repair 697*hat is *atso&5s tota! pre(e&tio& a&d appraisa! cost for!ast .o&th

A# 4;6

)# 1'17

C# 1'90

,# 2'667

[61] Source: CMA 0694 3-24 A!! of the fo!!owi&g wou!d ge&era!!" +e i&c!uded i& acost-of-ua!it" report e%cept

A# *arra&t" c!ai.s#

)# ,esig& e&gi&eeri&g#

C# Supp!ier e(a!uatio&s#

,# Kost co&tri+utio& .argi&#

[62] Source: CMA 1297 3-1The cost of statistica! ua!it" co&tro! i& a product ua!it"cost s"ste. is categori/ed as a&

A# &ter&a! fai!ure cost#

)# Trai&i&g cost#

C# $%ter&a! fai!ure cost#

,# Appraisa! cost#

[63] Source: CMA 0693 -2;*he& e(a!uati&g pro>ects' +reae(e& ti.e is +est descri+edas

A# A&&ua! fi%ed costs ・.o&th!" co&tri+utio& .argi&#

)# ro>ect i&(est.e&t ・a&&ua! &et cash i&f!ows#

C# The poi&t at which cu.u!ati(e cash i&f!ows o& apro>ect eua! tota! cash outf!ows#

,# The poi&t at which discou&ted cu.u!ati(e cashi&f!ows o& a pro>ect eua! discou&ted tota! cashoutf!ows#

[6] Source: CA 1196 -60S 9000 sta&dards for ri&g &etwors i&c!ude fau!t.a&age.e&t' co&figuratio& .a&age.e&t' accou&ti&g.a&age.e&t' securit" .a&age.e&t' a&d perfor.a&ce.o&itori&g# *hich of the fo!!owi&g co&tro!s is i&c!uded i&the perfor.a&ce-.o&itori&g sta&dards

A# ?eporti&g the fai!ure of &etwor fi+er-optic !i&es#

)# ?ecordi&g u&authori/ed access (io!atio&s#



C# Co.pi!i&g statistics o& the &u.+er of ti.es thatapp!icatio& software is used#

,# A!!ocati&g &etwor costs to s"ste. users of the&etwor#

[67] Source: CA 0797 -22 A& e%a.p!e of a& i&ter&a! &o&fi&a&cia! +e&ch.ar is

A# The !a+or rate of co.para+!" si!!ed e.p!o"ees ata .a>or co.petitor5s p!a&t#

)# The a(erage actua! cost per pou&d of a specificproduct at the co.pa&"5s .ost efficie&t p!a&t+eco.i&g the +e&ch.ar for the co.pa&"5s otherp!a&ts#

C# The co.pa&" setti&g a +e&ch.ar of 70'000 fore.p!o"ee trai&i&g progra.s at each of the co.pa&"5sp!a&ts#

,# The perce&tage of custo.er orders de!i(ered o&ti.e at the co.pa&"5s .ost efficie&t p!a&t +eco.i&g

the +e&ch.ar for the co.pa&"5s other p!a&ts#

[66] Source: u+!isher*hich of the fo!!owi&g state.e&ts regardi&g +e&ch.ari&gis fa!se

A# )e&ch.ari&g i&(o!(es co&ti&uous!" e(a!uati&g thepractices of +est-i&-c!ass orga&i/atio& a&d adapti&gco.pa&" processes to i&corporate the +est of thesepractices#

)# )e&ch.ari&g' i& practice' usua!!" i&(o!(es aco.pa&" for.i&g +e&ch.ari&g tea.s#

C# )e&ch.ari&g is a& o&goi&g process that e&tai!s

ua&titati(e a&d ua!itati(e .easure.e&t of thediffere&ce +etwee& the co.pa&"5s perfor.a&ce of a&acti(it" a&d the perfor.a&ce +" the +est i& the wor!dor the +est i& the i&dustr"#

,# The +e&ch.ari&g orga&i/atio& agai&st which afir. is co.pari&g itse!f .ust +e a direct co.petitor#

[Bact atter& J2]The .a&age.e&t a&d e.p!o"ees of a !arge househo!dgoods .o(i&g co.pa&" decided to adopt tota! ua!it".a&age.e&t T=M a&d co&ti&uous i.pro(e.e&t C#The" +e!ie(ed that' if their co.pa&" +eca.e &atio&a!!"&ow& as adheri&g to T=M a&d C' o&e resu!t wou!d +ea& i&crease i& the co.pa&"5s profits a&d .aret share#

[64] Source: CA 1197 -12?efers to Bact atter& J2The pri.ar" reaso& for adopti&g T=M was to achie(e

A# Greater custo.er satisfactio&#

)# ?educed de!i(er" ti.e#

C# ?educed de!i(er" charges#

,# Greater e.p!o"ee participatio&#

[6;] Source: CA 1197 -13?efers to Bact atter& J2

=ua!it" is achie(ed .ore eco&o.ica!!" if the co.pa&"focuses o&

A# Appraisa! costs#

)# re(e&tio& costs#

C# &ter&a! fai!ure costs#

,# $%ter&a! fai!ure costs#

[69] Source: CA 1197 -2; A traditio&a! ua!it" co&tro! process i& .a&ufacturi&gco&sists of .ass i&spectio& of goods o&!" at the e&d of aproductio& process# A .a>or deficie&c" of the traditio&a!co&tro! process is that

A# t is e%pe&si(e to do the i&spectio&s at the e&d ofthe process#

)# t is &ot possi+!e to rewor defecti(e ite.s#

C# t is &ot 1008 effecti(e#

,# t does &ot focus o& i.pro(i&g the e&tireproductio& process#

[40] Source: CA 079 -76Ma&age.e&t of a co.pa&" is atte.pti&g to +ui!d areputatio& as a wor!d-c!ass .a&ufacturer of ua!it"products# *hich of the fo!!owi&g .easures wou!d &ot +eused +" the fir. to .easure ua!it"

A# The perce&tage of ship.e&ts retur&ed +"custo.ers +ecause of poor ua!it"#

)# The &u.+er of parts shipped per da"#

C# The &u.+er of defecti(e parts per .i!!io&#

,# The perce&tage of products passi&g ua!it" teststhe first ti.e#

[41] Source: CA 1197 -9;=ua!it" cost i&dices are ofte& used to .easure a&d a&a!"/ethe cost of .ai&tai&i&g a gi(e& !e(e! of ua!it"# &e e%a.p!eof a ua!it" cost i&de%' which uses a direct !a+or +ase' isco.puted as

Tota! ua!it" costs=ua!it" cost i&de% O ------------------- % 100 ,irect !a+or costsThe fo!!owi&g ua!it" cost data were co!!ected for Ma" a&dHu&e:

Ma" Hu&e ------- --------re(e&tio& costs '000 7'000

Appraisa! costs 6'000 7'000&ter&a! fai!ure costs 12'000 17'000$%ter&a! fai!ure costs 1'000 11'000,irect !a+or costs 90'000 100'000)ased upo& these cost data' the ua!it" cost i&de%

A# ,ecreased poi&ts fro. Ma" to Hu&e#

)# *as u&cha&ged fro. Ma" to Hu&e#

C# &creased 10 poi&ts fro. Ma" to Hu&e#

,# ,ecreased 10 poi&ts fro. Ma" to Hu&e#

[42] Source: CA 1196 -2

@&der a tota! ua!it" .a&age.e&t T=M approach

A# Measure.e&t occurs throughout the process' a&derrors are caught a&d corrected at the source#



)# =ua!it" co&tro! is perfor.ed +" high!" trai&edi&spectors at the e&d of the productio& process#

C# @pper .a&age.e&t assu.es the pri.ar"respo&si+i!it" for the ua!it" of the products a&dser(ices#

,# A !arge &u.+er of supp!iers are used i& order too+tai& the !owest possi+!e prices#

[43] Source: CA 0796 -29*hich of the fo!!owi&g is a characteristic of tota! ua!it".a&age.e&t T=M

A# Ma&age.e&t +" o+>ecti(es#

)# &-the->o+ trai&i&g +" other worers#

C# =ua!it" +" fi&a! i&spectio&#

,# $ducatio& a&d se!f-i.pro(e.e&t#

[4] Source: CA 0796 -30& which of the fo!!owi&g orga&i/atio&a! structures doestota! ua!it" .a&age.e&t T=M wor +est

A# ierarcha!#

)# Tea.s of peop!e fro. the sa.e specia!t"#

C# Tea.s of peop!e fro. differe&t specia!ties#

,# Specia!ists wori&g i&di(idua!!"#

[47] Source: CA 0796 -32f a co.pa&" is custo.er-ce&tered' its custo.ers aredefi&ed as

A# &!" peop!e e%ter&a! to the co.pa&" who ha(epurchased so.ethi&g fro. the co.pa&"#

)# &!" peop!e i&ter&a! to the co.pa&" who direct!"use its product#

C# A&"o&e e%ter&a! to the co.pa&" a&d thosei&ter&a! who re!" o& its product to get their >o+ do&e#

,# $(er"+od" e%ter&a! to the co.pa&" who iscurre&t!" doi&g' or .a" i& the future do' +usi&ess withthe co.pa&"#

[46] Source: CA 1196 -23

The .ost i.porta&t co.po&e&t of ua!it" co&tro! is

A# $&suri&g goods a&d ser(ices co&for. to thedesig& specificatio&s#

)# Satisf"i&g upper .a&age.e&t#

C# Co&for.i&g with S-9000 specificatio&s#

,# ,eter.i&i&g the appropriate ti.i&g of i&spectio&s#

[44] Source: CA 0796 -20*hich o&e of the fo!!owi&g is &ot a characteristic of a&i&&o(ati(e .a&ufacturi&g co.pa&"

A# $.phasis o& co&ti&uous i.pro(e.e&t#

)# ?espo&si(e&ess to the cha&gi&g .a&ufacturi&ge&(iro&.e&t#

C# $.phasis o& e%isti&g products#

,# .pro(ed custo.er satisfactio& through productua!it"#

[4;] Source: CA 1197 -66Mo&itori&g is a& i.porta&t co.po&e&t of i&ter&a! co&tro!#*hich of the fo!!owi&g ite.s wou!d &ot +e a& e%a.p!e of.o&itori&g

A# Ma&age.e&t regu!ar!" co.pares di(isio&a!perfor.a&ce with +udgets for the di(isio&#

)# ,ata processi&g .a&age.e&t regu!ar!" ge&eratese%ceptio& reports for u&usua! tra&sactio&s or (o!u.esof tra&sactio&s a&d fo!!ows up with i&(estigatio& as tocauses#

C# ,ata processi&g .a&age.e&t regu!ar!" reco&ci!es+atch co&tro! tota!s for ite.s processed with +atchco&tro!s for ite.s su+.itted#

,# Ma&age.e&t has ased i&ter&a! auditi&g to

perfor. regu!ar audits of the co&tro!s o(er cashprocessi&g#

[49] Source: u+!isher*hich of the fo!!owi&g state.e&ts regardi&g co.pariso& ofperfor.a&ce with sta&dards is fa!se

A# &e of the .a>or ad(a&tages of trait-t"peperfor.a&ce appraisa!s is their a+i!it" to .easureperfor.a&ce accurate!"' which .aes correcti(eactio& easier#

)# A&" a!teratio& i& the productio& process .a".ae pre(ious!" used or co.pa&"-wide sta&dardsi&app!ica+!e to the case at ha&d#

C# &e of the .a>or ad(a&tages of .a&age.e&t +"o+>ecti(es is that it c!ose!" ties >o+ perfor.a&ce to asta&dard that ca& +e used as a guide to correcti(eactio&#

,# articipatio& +" affected e.p!o"ees i& co&tro!s"ste.s per.its a!! co&cer&ed to u&dersta&d +oth theperfor.a&ce !e(e!s desired a&d the .easure.e&tcriteria +ei&g app!ied#

[Bact atter& J3]The $?T &etwor diagra. a&d correspo&di&g acti(it"cost chart for a .a&ufacturi&g pro>ect at Detwors' &c# isprese&ted +e!ow# The &u.+ers i& the diagra. are the

e%pected ti.es i& da"s to perfor. each acti(it" i& thepro>ect#

Acti(it" Dor.a! Cost Crash Ti.e Crash Cost-------- ----------- ---------- ---------- A) 3'000 3#70 da"s '000 AC 7'000 #70 7'270 A, '000 #00 '470 )$ 6'000 7#00 4'000 C$ ;'000 7#00 9'200 ,$ 6'000 6#70 6'470 )C 2'700 #70 3'700 ), 2'000 #27 2'700

[;0] Source: CMA 1290 -4

?efers to Bact atter& J3?efer to Bigure 1# The e%pected ti.e of the critica! path is

A# 12#0 da"s#



)# 13#0 da"s#

C# 11#7 da"s#

,# 11#0 da"s#

[;1] Source: CMA 1290 -;?efers to Bact atter& J3?efer to Bigure 1# To eep costs at a .i&i.u. a&ddecrease the co.p!etio& ti.e +" 1 ｽ da"s' Detwors' &c#shou!d crash acti(it"ies

A# A, a&d A)#

)# ,$#

C# A,#

,# A) a&d C$#

[;2] Source: CA 07;6 -23

?efer to Bigure 2# The Ga&tt chart a+o(e shows that thepro>ect is

A# Co.p!ete#

)# Ahead of schedu!e#

C# & schedu!e#

,# )ehi&d schedu!e#

[;3] Source: CMA 12;9 -3 A fi%ed o(erhead (o!u.e (aria&ce +ased o& sta&darddirect !a+or hours .easures

A# ,e(iatio& fro. sta&dard direct !a+or hourcapacit"#

)# ,e(iatio& fro. the &or.a!' or de&o.i&ator' !e(e!of direct !a+or hours#

C# Bi%ed o(erhead efficie&c"#

,# Bi%ed o(erhead use#

[;] Source: CMA 12;9 -6f o(erhead is app!ied o& the +asis of u&its of output' the(aria+!e o(erhead efficie&c" (aria&ce wi!! +e

A# Pero#

)# Ba(ora+!e' if output e%ceeds the +udgeted !e(e!#

C# @&fa(ora+!e' if output is !ess tha& the +udgeted!e(e!#

,# A fu&ctio& of the direct !a+or efficie&c" (aria&ce#

[;7] Source: CA 1192 F-14,ata regardi&g four differe&t products .a&ufactured +" a&orga&i/atio& are prese&ted as fo!!ows# ,irect .ateria! a&ddirect !a+or are readi!" a(ai!a+!e fro. the respecti(eresource .arets# owe(er' the .a&ufacturer is !i.ited toa .a%i.u. of 3'000 .achi&e hours per .o&th#

roducts -------------------------- A ) C , --- --- --- ---

@&it price 17 1; 20 27Faria+!e cost 4 11 10 16 @&its roduced per Machi&e our ------------------------------- A ) C , --- --- --- --- 3 2 3The product that is the .ost profita+!e for the .a&ufactureri& this situatio& is

A# roduct A#

)# roduct )#

C# roduct C#

,# roduct ,#

[Bact atter& J]Da&>o&es Co.pa&" .a&ufactures a !i&e of productsdistri+uted &atio&a!!" through who!esa!ers# rese&ted +e!oware p!a&&ed .a&ufacturi&g data for the "ear a&d actua! datafor Do(e.+er of the curre&t "ear# The co.pa&" app!ieso(erhead +ased o& p!a&&ed .achi&e hours usi&g a

predeter.i&ed a&&ua! rate#

!a&&i&g ,ata --------------------- A&&ua! Do(e.+er ---------- --------- Bi%ed .a&ufacturi&g o(erhead 1'200'000 100'000 Faria+!e .a&ufacturi&g o(erhead 2'00'000 220'000 ,irect !a+or hours ;'000 '000 Machi&e hours 20'000 22'000 ,ata for Do(e.+er ------------- ,irect !a+or hours actua! '200

,irect !a+or hours p!a& +ased o& output '000 Machi&e hours actua! 21'600 Machi&e hours p!a& +ased o& output 21'000 Bi%ed .a&ufacturi&g o(erhead 101'200 Faria+!e .a&ufacturi&g o(erhead 21'000

[;6] Source: CMA 1292 3-17?efers to Bact atter& JThe predeter.i&ed o(erhead app!icatio& rate for Da&>o&esCo.pa&" is

A# 7#00#

)# 27#00#

C# 10#00#

,# 17#00#

[;4] Source: CMA 1292 3-16?efers to Bact atter& JThe tota! a.ou&t of o(erhead app!ied to productio& forDo(e.+er was

A# 316'200#

)# 317'000#

C# 320'000#

,# 300'000#



[;;] Source: CMA 1292 3-14?efers to Bact atter& JThe a.ou&t of o(er- or u&derapp!ied (aria+!e.a&ufacturi&g o(erhead for Do(e.+er was

A# 6'000 o(erapp!ied#

)# '000 u&derapp!ied#

C# 20'000 o(erapp!ied#

,# 6'000 u&derapp!ied#

[;9] Source: CMA 1292 3-1;?efers to Bact atter& JThe (aria+!e o(erhead spe&di&g (aria&ce for Do(e.+erwas

A# 2'000 fa(ora+!e#

)# 6'000 fa(ora+!e#

C# 1'000 u&fa(ora+!e#

,# 6'000 u&fa(ora+!e#

[90] Source: CMA 1292 3-19?efers to Bact atter& JThe fi%ed o(erhead (o!u.e (aria&ce for Do(e.+er was

A# 1'200 u&fa(ora+!e#

)# 7'000 u&fa(ora+!e#

C# 10'000 fa(ora+!e#

,# 7'000 fa(ora+!e#

[91] Source: CMA 0693 3-17The f!e%i+!e +udget for the .o&th of Ma" was for 9'000u&its with direct .ateria! at 17 per u&it# ,irect !a+or was+udgeted at 7 .i&utes per u&it for a tota! of ;1'000# Actua! output for the .o&th was ;'700 u&its with 124'700i& direct .ateria! a&d 44'447 i& direct !a+or e%pe&se# Thedirect !a+or sta&dard of 7 .i&utes was .ai&tai&edthroughout the .o&th# Faria&ce a&a!"sis of the perfor.a&cefor the .o&th of Ma" wou!d show a&

A# Ba(ora+!e .ateria! usage (aria&ce of 4'700#

)# Ba(ora+!e direct !a+or efficie&c" (aria&ce of1'247#

C# @&fa(ora+!e direct !a+or efficie&c" (aria&ce of

1'247#

,# @&fa(ora+!e direct !a+or price (aria&ce of 1'247#

[92] Source: CMA 0693 3-16& a&a!"/i&g co.pa&" operatio&s' the co&tro!!er of theHaso& Corporatio& fou&d a 270'000 fa(ora+!ef!e%i+!e-+udget re(e&ue (aria&ce# The (aria&ce wasca!cu!ated +" co.pari&g the actua! resu!ts with the f!e%i+!e+udget# This (aria&ce ca& +e who!!" e%p!ai&ed +"

A# The tota! f!e%i+!e +udget (aria&ce#

)# The tota! sa!es (o!u.e (aria&ce#

C# The tota! static +udget (aria&ce#

,# Cha&ges i& u&it se!!i&g prices#

[Bact atter& J7]Ti&" T"es Corporatio& had the fo!!owi&g acti(it" re!ati&gto its fi%ed a&d (aria+!e o(erhead for the .o&th of Hu!"#

Actua! costs Bi%ed o(erhead 120'000 Faria+!e o(erhead ;0'000 B!e%i+!e +udget Sta&dard i&put a!!owed for actua! output achie(ed % the +udgeted rate Faria+!e o(erhead 90'000 App!ied Sta&dard i&put a!!owed for actua! output achie(ed % the +udgeted rate Bi%ed o(erhead 127'000 Faria+!e o(erhead spe&di&g (aria&ce 2'000B roductio& (o!u.e (aria&ce 7'000@

[93] Source: CMA 0693 3-19?efers to Bact atter& J7f the +udgeted rate for app!"i&g (aria+!e .a&ufacturi&go(erhead was 20 per direct !a+or hour' how efficie&t ori&efficie&t was Ti&" T"es Corporatio& i& ter.s of usi&gdirect !a+or hours as a& acti(it" +ase

A# 100 direct !a+or hours i&efficie&t#

)# 100 direct !a+or hours efficie&t#

C# 00 direct !a+or hours i&efficie&t#

,# 00 direct !a+or hours efficie&t#

[9] Source: CMA 0693 3-20?efers to Bact atter& J7The fi%ed o(erhead efficie&c" (aria&ce is

A# 3'000 fa(ora+!e#

)# 3'000 u&fa(ora+!e#

C# 7'000 fa(ora+!e#

,# De(er a .ea&i&gfu! (aria&ce#

[97] Source: CMA 0693 3-26*hich o&e of the fo!!owi&g (aria&ces is of !east sig&ifica&cefro. a +eha(iora! co&tro! perspecti(e

A# @&fa(ora+!e .ateria! ua&tit" (aria&ce a.ou&ti&gto 208 of the ua&tit" a!!owed for the outputattai&ed#

)# @&fa(ora+!e !a+or efficie&c" (aria&ce a.ou&ti&g to

108 .ore tha& the +udgeted hours for the outputattai&ed#

C# Ba(ora+!e !a+or rate (aria&ce resu!ti&g fro. a&i&a+i!it" to hire e%perie&ced worers to rep!aceretiri&g worers#

,# Bi%ed o(erhead (o!u.e (aria&ce resu!ti&g fro..a&age.e&t5s decisio& .idwa" through the fisca!"ear to reduce its +udgeted output +" 208#

[Bact atter& J6]Che.Ii&g uses a sta&dard costi&g s"ste. i& the.a&ufacture of its si&g!e product# The 37'000 u&its of raw.ateria! i& i&(e&tor" were purchased for 107'000' a&d

two u&its of raw .ateria! are reuired to produce o&e u&itof fi&a! product# & Do(e.+er' the co.pa&" produced12'000 u&its of product# The sta&dard a!!owed for .ateria!was 60'000' a&d there was a& u&fa(ora+!e ua&tit"



(aria&ce of 2'700#

[96] Source: CMA 1293 3-22?efers to Bact atter& J6Che.Ii&g5s sta&dard price for o&e u&it of .ateria! is

A# 2#00#

)# 2#70#

C# 3#00#

,# 7#00#

[94] Source: CMA 1293 3-23?efers to Bact atter& J6The u&its of .ateria! used to produce Do(e.+er outputtota!ed

A# 12'000 u&its#

)# 12'700 u&its#

C# 23'000 u&its#

,# 27'000 u&its#

[9;] Source: CMA 1293 3-2?efers to Bact atter& J6The .ateria!s price (aria&ce for the u&its used i& Do(e.+erwas

A# 2'700 u&fa(ora+!e#

)# 11'000 u&fa(ora+!e#

C# 12'700 u&fa(ora+!e#

,# 3'700 u&fa(ora+!e#

[99] Source: CMA 1293 3-27 A .a&ufacturi&g fir. p!a&&ed to .a&ufacture a&d se!!100'000 u&its of product duri&g the "ear at a (aria+!e costper u&it of #00 a&d a fi%ed cost per u&it of 2#00# Thefir. fe!! short of its goa! a&d o&!" .a&ufactured ;0'000u&its at a tota! i&curred cost of 717'000# The fir.5s.a&ufacturi&g cost (aria&ce was

A# ;7'000 fa(ora+!e#

)# 37'000 u&fa(ora+!e#

C# 7'000 fa(ora+!e#

,# 7'000 u&fa(ora+!e#

[100] Source: CA 0792 F-1;The fo!!owi&g is a sta&dard cost (aria&ce a&a!"sis report o&direct !a+or cost for a di(isio& of a .a&ufacturi&g co.pa&"#

Actua! ours Actua! ours Sta&dard ours at at atHo+ Actua! *ages Sta&dard *ages Sta&dard *ages--- ------------ -------------- --------------213 3'23 3'400 3'100217 17'37 17'647 17'000214 6'47 4'000 6'600219 19'4;; 1;'477 19'270221 3'340 3'40 2'670

------ ------- ------- -------Tota!s ;'700 ;'600 6'600 OOOOOOO OOOOOOO OOOOOOO*hat is the tota! f!e%i+!e +udget direct !a+or (aria&ce for

the di(isio&

A# 100 fa(ora+!e#

)# 1'900 u&fa(ora+!e#

C# 1'900 fa(ora+!e#

,# 2'000 u&fa(ora+!e#

[101] Source: CA 0793 F-1Bor a si&g!e-product co.pa&"' the sa!es (o!u.e (aria&ce is

A# The differe&ce +etwee& actua! a&d .aster +udgetsa!es (o!u.e' ti.es actua! u&it co&tri+utio& .argi&#

)# The differe&ce +etwee& f!e%i+!e +udget a&d actua!sa!es (o!u.e' ti.es .aster +udget u&it co&tri+utio&.argi&#

C# The differe&ce +etwee& f!e%i+!e +udget a&d .aster+udget sa!es (o!u.e' ti.es actua! +udget u&itco&tri+utio& .argi&#

,# The differe&ce +etwee& f!e%i+!e +udget a&d .aster+udget sa!es (o!u.e' ti.es .aster +udget u&itco&tri+utio& .argi&#

[103] Source: u+!isher?efers to Bact atter& J4*hat is the .ateria!s "ie!d (aria&ce for this operatio&

A# 29#70 fa(ora+!e#

)# 3;;#70 fa(ora+!e#

C# 9#70 u&fa(ora+!e#

,# 219#70 fa(ora+!e#

[10] Source: u+!isherThe sa!es ua&tit" (aria&ce eua!s

A# Actua! u&its % +udgeted weighted-a(erage @CMfor p!a&&ed .i% - +udgeted weighted-a(erage @CMfor actua! .i%#

)# Actua! u&its - .aster +udget u&its % +udgetedweighted-a(erage @CM for the p!a&&ed .i%#

C# )udgeted .aret share perce&tage % actua!.aret si/e i& u&its - +udgeted .aret si/e i& u&its %

+udgeted weighted-a(erage @CM#

,# Actua! .aret share perce&tage-+udgeted.aret share perce&tage % actua! .aret si/e i& u&its% +udgeted weighted-a(erage @CM#

[107] Source: u+!isherThe sa!es .i% (aria&ce eua!s


)# Actua! u&its - .aster +udget u&its % +udgetedweighted-a(erage @CM for p!a&&ed .i%#

C# )udgeted .aret share perce&tage % actua!.aret si/e i& u&its - +udgeted .aret si/e i& u&its %+udgeted weighted-a(erage @CM#



,# Actua! .aret share perce&tage - +udgeted.aret share perce&tage % actua! .aret si/e i& u&its% +udgeted weighted-a(erage @CM#

[106] Source: u+!isherThe .aret si/e (aria&ce eua!s




,# Actua! .aret share perce&tage - +udgeted.aret share perce&tage % actua! .aret si/e i& u&its% +udgeted weighted-a(erage @CM#

[104] Source: u+!isherThe .aret share (aria&ce eua!s




,# Actua! .aret share perce&tage - +udgeted.aret share perce&tage % actua! .aret si/e i& u&its

% +udgeted weighted-a(erage @CM#

[10;] Source: u+!isherCo.pa&" P uses a sta&dard cost s"ste. that carries.ateria!s at actua! price u&ti! the" are tra&sferred to the* accou&t# & pro>ect A' 700 u&its of Q were used at acost of 10 per u&it# Sta&dards reuire 70 u&its toco.p!ete this pro>ect# The sta&dard price is esta+!ished at9 per u&it# *hat is the proper >our&a! e&tr"

A#

*or-i&-process '970 ,M price (aria&ce 700 ,M ua&tit" (aria&ce 70

&(e&tor" 7'000 )#

*or-i&-process 7'970 ,M price (aria&ce 700 ,M ua&tit" (aria&ce 70 &(e&tor" 7'000 C#

*or-i&-process '070 ,M price (aria&ce 700 ,M ua&tit" (aria&ce 70 &(e&tor" 7'000 ,#

*or-i&-process 7'000

&(e&tor" 7'000

[109] Source: u+!isher

f a pro>ect reuired 70 hours to co.p!ete at a cost of 10per hour +ut shou!d ha(e tae& o&!" 7 hours at a cost of12 per hour' what is the proper e&tr" to record the costs

A#

*or-i&-process 70 ,K efficie&c" (aria&ce 60 ,K price (aria&ce 100 Accrued pa"ro!! 700 )#

*age e%pe&se 0 ,K efficie&c" (aria&ce 60 Accrued pa"ro!! 700 C#

*or-i&-process 60 ,K price (aria&ce 100 ,K efficie&c" (aria&ce 60 Accrued pa"ro!! 700 ,#

*or-i&-process 700 Accrued pa"ro!! 700

[110] Source: u+!isher Assu.e price (aria&ces are recorded at the ti.e ofpurchase# *hat is the >our&a! e&tr" to record a direct.ateria!s price (aria&ce if .ateria!s are purchased at 7 per u&it for 670 a&d their sta&dard price is per u&it

A#

&(e&tor" 670 Accou&ts pa"a+!e 670 )#

&(e&tor" 720 ,M price (aria&ce 130

Accou&ts pa"a+!e 670 C#

&(e&tor" 720 *or-i&-process 130 Cash 670 ,#

Bi&ished goods 720 ,M price (aria&ce 130 Cash 670

[111] Source: u+!isher A!pha Co.pa&" paid >a&itors 7 per hour to c!ea& theproductio& area# *hat is the proper >our&a! e&tr" to

accou&t for this e%pe&se for the .o&th of Hu&e if 730 hourswere wored +" the >a&itors

A#

Sa!aries e%pe&se 2'670 a"ro!! 2'670 )#

Faria+!e E co&tro! 2'670 Faria+!e E app!ied 2'670 C#

Faria+!e E co&tro! 2'670 a"ro!! pa"a+!e 2'670 ,#

Faria+!e E app!ied 2'670 a"ro!! pa"a+!e 2'670



[112] Source: u+!isher A!pha Co.pa&" paid >a&itors 7 per hour to c!ea& theproductio& area# t i&itia!!" set the sta&dard cost of >a&itoria!wor at #70 per hour# *hat is the appropriate e&tr" torecord the app!icatio& of the 730 hours wored +" the >a&itors

A#

*or-i&-process 2'3;7 Faria+!e E app!ied 2'3;7 )#

*or-i&-process 2'3;7 Faria+!e E co&tro! 2'3;7 C#

Faria+!e E co&tro! 267 *or-i&-process 2'3;7 Faria+!e E app!ied 2'670 ,#

Cost of goods so!d 2'3;7 Faria+!e E app!ied 2'3;7

[113] Source: u+!isher A!pha Co.pa&" paid >a&itors 7 per hour to c!ea& theproductio& area# t i&itia!!" set the sta&dard cost of >a&itoria!wor at #70 per hour' a&d 730 hours were wored +"the >a&itors# *hat e&tr" accou&ts for the recog&itio& of the(aria&ce that occurred Assu.e that this was the o&!"(aria+!e E (aria&ce#

A#

Faria+!e E app!ied 2'670 Faria&ce su..ar" 267 Faria+!e E co&tro! 2'3;7 )#

Faria+!e E app!ied 2'3;7 Faria+!e E spe&di&g (aria&ce 267 Faria+!e E co&tro! 2'670 C#

Faria+!e E app!ied 2'3;7 Faria+!e E efficie&c" (aria&ce 267 Faria+!e E co&tro! 2'670 ,#

Faria+!e E co&tro! 2'3;7 Faria+!e spe&di&g (aria&ce 267 Faria+!e E app!ied 2'670

[11] Source: u+!isher.ega Co.pa&" wou!d ha(e app!ied 32'700 of fi%edfactor" E if capacit" usage had eua!ed the .aster+udget# Gi(e& that a.ou&t' 2'000 sta&dard hours the&or.a! (o!u.e were a!!owed for the actua! output' thatactua! fi%ed factor" E eua!ed the +udgeted a.ou&t' a&dthat E was app!ied at a rate of 17 per hour' what is thee&tr" to c!ose the fi%ed factor" E accou&ts

A#

Bi%ed E co&tro! 30'000 roductio& (o!u.e (aria&ce 2'700 Bi%ed E app!ied 32'700

)#

Cost of goods so!d 32'700 Bi%ed E co&tro! 32'700

C#

*or-i&-process 30'000 E price (aria&ce 2'700 Bi%ed E app!ied 32'700 ,#

Bi%ed E app!ied 30'000 roductio& (o!u.e (aria&ce 2'700 Bi%ed E co&tro! 32'700

[117] Source: CMA 069 3-19*hich o&e of the fo!!owi&g is !east !ie!" to +e i&(o!(ed i&esta+!ishi&g sta&dard costs for e(a!uatio& purposes

A# )udgetar" accou&ta&ts#

)# &dustria! e&gi&eers#

C# Top .a&age.e&t#

,# =ua!it" co&tro! perso&&e!#

[116] Source: CMA 069 3-21@&der a sta&dard cost s"ste.' the .ateria!s efficie&c"(aria&ces are the respo&si+i!it" of

A# roductio& a&d i&dustria! e&gi&eeri&g#

)# urchasi&g a&d i&dustria! e&gi&eeri&g#

C# urchasi&g a&d sa!es#

,# Sa!es a&d i&dustria! e&gi&eeri&g#

[114] Source: CMA 069 3-22@&der a sta&dard cost s"ste.' !a+or price (aria&ces areusua!!" &ot attri+uta+!e to

A# @&io& co&tracts appro(ed +efore the +udgeti&gc"c!e#

)# Ka+or rate predictio&s#

C# The use of a si&g!e a(erage sta&dard rate#

,# The assig&.e&t of differe&t si!! !e(e!s of worerstha& p!a&&ed#

[11;] Source: CMA 069 3-23 A fa(ora+!e .ateria!s price (aria&ce coup!ed with a&u&fa(ora+!e .ateria!s usage (aria&ce wou!d .ost !ie!"resu!t fro.

A# Machi&e efficie&c" pro+!e.s#

)# roduct .i% productio& cha&ges#

C# The purchase a&d use of higher tha& sta&dardua!it" .ateria!s#

,# The purchase of !ower tha& sta&dard ua!it".ateria!s#

[119] Source: CMA 129 3-2Tower Co.pa&" p!a&&ed to produce 3'000 u&its of itssi&g!e product' Titactiu.' duri&g Do(e.+er# The sta&dardspecificatio&s for o&e u&it of Titactiu. i&c!ude 6 pou&ds of

.ateria!s at #30 per pou&d# Actua! productio& i&Do(e.+er was 3'100 u&its of Titactiu.# The accou&ta&tco.puted a fa(ora+!e .ateria!s purchase price (aria&ce of3;0 a&d a& u&fa(ora+!e .ateria!s ua&tit" (aria&ce of



120# )ased o& these (aria&ces' o&e cou!d co&c!ude that

A# More .ateria!s were purchased tha& were used#

)# More .ateria!s were used tha& were purchased#

C# The actua! cost of .ateria!s was !ess tha& thesta&dard cost#

,# The actua! usage of .ateria!s was !ess tha& thesta&dard a!!owed#

[120] Source: CMA 129 3-27 A& u&fa(ora+!e direct !a+or efficie&c" (aria&ce cou!d +ecaused +" a&

A# @&fa(ora+!e (aria+!e o(erhead spe&di&g (aria&ce#

)# @&fa(ora+!e .ateria!s usage (aria&ce#

C# @&fa(ora+!e fi%ed o(erhead (o!u.e (aria&ce#

,# Ba(ora+!e (aria+!e o(erhead spe&di&g (aria&ce#

[Bact atter& J;]*ater Co&tro! &c# .a&ufactures water pu.ps a&d uses asta&dard cost s"ste.# The sta&dard factor" o(erhead costsper water pu.p are +ased o& direct !a+or hours a&d are asfo!!ows:

Faria+!e o(erhead hours at ;Ehour 32 Bi%ed o(erhead hours at 7REhour 20 --- Tota! o(erhead cost per u&it 72 OOO R )ased o& a capacit" of 100'000 direct !a+or hours per.o&th# The fo!!owi&g additio&a! i&for.atio& is a(ai!a+!e for the .o&th of Do(e.+er:

ｷ 22'000 pu.ps were produced a!though 27'000 had +ee&schedu!ed for productio&# ｷ 9'000 direct !a+or hours were wored at a tota! cost of90'000#

ｷ The sta&dard direct !a+or rate is 9 per hour# ｷ The sta&dard direct !a+or ti.e per u&it is four hours# ｷ Faria+!e o(erhead costs were 40'000# ｷ Bi%ed o(erhead costs were 70'000#

[121] Source: CMA 129 3-26?efers to Bact atter& J;The fi%ed o(erhead spe&di&g (aria&ce for Do(e.+er was

A# 0'000 u&fa(ora+!e#

)# 40'000 u&fa(ora+!e#

C# 60'000 u&fa(ora+!e#

,# 20'000 u&fa(ora+!e#

[122] Source: CMA 129 3-24?efers to Bact atter& J;The (aria+!e o(erhead spe&di&g (aria&ce for Do(e.+erwas

A# 60'000 fa(ora+!e#

)# 12'000 fa(ora+!e#

C# ;'000 u&fa(ora+!e#

,# 0'000 u&fa(ora+!e#

[123] Source: CMA 129 3-2;?efers to Bact atter& J;The (aria+!e o(erhead efficie&c" (aria&ce for Do(e.+erwas

A# ;'000 u&fa(ora+!e#

)# 60'000 fa(ora+!e#

C# 96'000 u&fa(ora+!e#

,# 200'000 u&fa(ora+!e#

[12] Source: CMA 129 3-29?efers to Bact atter& J;The direct !a+or price (aria&ce for Do(e.+er was

A# 7'000 u&fa(ora+!e#

)# 9'000 u&fa(ora+!e#

C# 60'000 fa(ora+!e#

,# 1;'000 u&fa(ora+!e#

[127] Source: CMA 129 3-30?efers to Bact atter& J;The direct !a+or efficie&c" (aria&ce for Do(e.+er was

A# 10;'000 fa(ora+!e#

)# 120'000 fa(ora+!e#

C# 60'000 fa(ora+!e#

,# 7'000 u&fa(ora+!e#

[126] Source: CMA 0697 3-10 A sta&dard costi&g s"ste. is .ost ofte& used +" a fir. i&co&>u&ctio& with


)# Target hurd!e rates of retur&#

C# articipati(e .a&age.e&t progra.s#

,# B!e%i+!e +udgets#

[Bact atter& J9])!aster &c#' a .a&ufacturer of porta+!e radios' purchases

the co.po&e&ts fro. su+co&tractors to use to asse.+!ei&to a co.p!ete radio# $ach radio reuires three u&its eachof art Q)$P72' which has a sta&dard cost of 1#7 peru&it# ,uri&g Ma"' )!aster e%perie&ced the fo!!owi&g withrespect to art Q)$P72#

@&its ------ urchases 1;'000 12'000 Co&su.ed i& .a&ufacturi&g 10'000 ?adios .a&ufactured 3'000

[124] Source: CMA 0697 3-23?efers to Bact atter& J9,uri&g Ma"' )!aster &c# i&curred a purchase price(aria&ce of

A# 70 u&fa(ora+!e#

)# 70 fa(ora+!e#



C# 700 fa(ora+!e#

,# 600 u&fa(ora+!e#

[12;] Source: CMA 0697 3-2?efers to Bact atter& J9,uri&g Ma"' )!aster &c# i&curred a .ateria!s efficie&c"(aria&ce of

A# 1'70 u&fa(ora+!e#

)# 1'70 fa(ora+!e#

C# '370 u&fa(ora+!e#

,# '370 fa(ora+!e#

[129] Source: CMA 0697 3-27rice (aria&ces a&d efficie&c" (aria&ces ca& +e e" to theperfor.a&ce .easure.e&t withi& a co.pa&"# & e(a!uati&gthe perfor.a&ce withi& a co.pa&"' a .ateria!s efficie&c"(aria&ce ca& +e caused +" a!! of the fo!!owi&g e%cept the

A# erfor.a&ce of the worers usi&g the .ateria!#

)# Actio&s of the purchasi&g depart.e&t#

C# ,esig& of the product#

,# Sa!es (o!u.e of the product#

[130] Source: CMA 0697 3-29Bor a co.pa&" that produces .ore tha& o&e product' thesa!es (o!u.e (aria&ce ca& +e di(ided i&to which two of thefo!!owi&g additio&a! (aria&ces

A# Sa!es price (aria&ce a&d f!e%i+!e +udget (aria&ce#

)# Sa!es .i% (aria&ce a&d sa!es price (aria&ce#

C# Sa!es ua&tit" (aria&ce a&d sa!es .i% (aria&ce#

,# Sa!es .i% (aria&ce a&d productio& (o!u.e(aria&ce#

[131] Source: CMA 0697 3-30The productio& (o!u.e (aria&ce is due to

A# &efficie&t or efficie&t use of direct !a+or hours#

)# $fficie&t or i&efficie&t use of (aria+!e o(erhead#

C# ,iffere&ce fro. the p!a&&ed !e(e! of the +ase usedfor o(erhead a!!ocatio& a&d the actua! !e(e! achie(ed#

,# $%cessi(e app!icatio& of direct !a+or hours o(erthe sta&dard a.ou&ts for the output !e(e! actua!!"achie(ed#

[132] Source: CMA 1297 3-3The (aria&ce that arises so!e!" +ecause the ua&tit" actua!!"so!d differs fro. the ua&tit" +udgeted to +e so!d is

A# Static +udget (aria&ce#

)# Master +udget i&cre.e&t#

C# Sa!es .i% (aria&ce#

,# Sa!es (o!u.e (aria&ce#

[133] Source: CMA 1297 3-Faria+!e o(erhead is app!ied o& the +asis of sta&dard direct!a+or hours# f' for a gi(e& period' the direct !a+orefficie&c" (aria&ce is u&fa(ora+!e' the (aria+!e o(erheadefficie&c" (aria&ce wi!! +e

A# Ba(ora+!e#

)# @&fa(ora+!e#

C# Pero#

,# The sa.e a.ou&t as the !a+or efficie&c" (aria&ce#

[13] Source: CMA 1297 3-4The (aria&ce i& a& a+sorptio& costi&g s"ste. that .easuresthe departure fro. the de&o.i&ator !e(e! of acti(it" thatwas used to set the fi%ed o(erhead rate is the

A# Spe&di&g (aria&ce#

)# $fficie&c" (aria&ce#

C# roductio& (o!u.e (aria&ce#

,# B!e%i+!e +udget (aria&ce#

[137] Source: CMA 1297 3-;The efficie&c" (aria&ce for either !a+or or .ateria!s ca& +edi(ided i&to

A# Spe&di&g (aria&ce a&d "ie!d (aria&ce#

)# ie!d (aria&ce a&d price (aria&ce#

C# Fo!u.e (aria&ce a&d .i% (aria&ce#

,# ie!d (aria&ce a&d .i% (aria&ce#

[136] Source: CMA 1297 3-11

& a sta&dard cost s"ste.' the i&(estigatio& of a&u&fa(ora+!e .ateria! usage (aria&ce shou!d +egi& with the

A# roductio& .a&ager o&!"#

)# !a&t co&tro!!er o&!"#

C# urchasi&g .a&ager o&!"#

,# roductio& .a&ager or the purchasi&g .a&ager#

[134] Source: CMA 1297 3-27*hich o&e of the fo!!owi&g (aria&ces is .ost co&tro!!a+!e+" the productio& co&tro! super(isor

A# Materia! price (aria&ce#

)# Materia! usage (aria&ce#

C# Faria+!e o(erhead spe&di&g (aria&ce#

,# Bi%ed o(erhead +udget (aria&ce#

[13;] Source: CMA 12;9 -2

A& u&fa(ora+!e direct !a+or efficie&c" (aria&ce cou!d +ecaused +" a&

A# @&fa(ora+!e (aria+!e o(erhead spe&di&g (aria&ce#



)# Ba(ora+!e (aria+!e o(erhead spe&di&g (aria&ce#

C# @&fa(ora+!e .ateria! usage (aria&ce#

,# Ba(ora+!e fi%ed o(erhead (o!u.e (aria&ce#

[Bact atter& J10] A& orga&i/atio& that specia!i/es i& re(iewi&g a&d editi&gtech&ica! .aga/i&e artic!es# t set the fo!!owi&g sta&dardsfor e(a!uati&g the perfor.a&ce of the professio&a! staff:

A&&ua! +udgeted fi%ed costs for &or.a! capacit" !e(e! of 10'000 artic!es re(iewed a&d edited 600'000 Sta&dard professio&a! hours per 10 artic!es 200 hoursB!e%i+!e +udget of sta&dard !a+or costs to process 10'000 artic!es 10'000'000The fo!!owi&g data app!" to the 9'700 artic!es that wereactua!!"re(iewed a&d edited duri&g the curre&t "ear#Tota! hours used +" professio&a! staff 192'000 hours

B!e%i+!e costs 9'120'000Tota! cost 9'43;'000

[139] Source: CMA 0692 3-17?efers to Bact atter& J10@si&g a f!e%i+!e +udget' the tota! cost p!a&&ed for there(iew a&d editi&g of 9'700 artic!es shou!d +e

A# 9'700'000#

)# 10'040'000#

C# 10'100'000#

,# 10'740'000#

[10] Source: CMA 0692 3-16?efers to Bact atter& J10The fi%ed cost spe&di&g (aria&ce for the "ear is

A# 1;'000 u&fa(ora+!e#

)# 30'000 fa(ora+!e#

C# ;'000 u&fa(ora+!e#

,# 1;'000 fa(ora+!e#

[11] Source: CMA 0692 3-14?efers to Bact atter& J10

The !a+or efficie&c" (aria&ce for the "ear is

A# 100'000 u&fa(ora+!e#

)# 23;'000 u&fa(ora+!e#

C# 3;0'000 fa(ora+!e#

,# 700'000 fa(ora+!e#

[13] Source: CMA 0692 3-19?efers to Bact atter& J11The direct .ateria!s usage ua&tit" (aria&ce for Ma" is

A# 4'200 u&fa(ora+!e#

)# 4'600 fa(ora+!e#

C# 7';70 u&fa(ora+!e#

,# 4'200 fa(ora+!e#

[1] Source: CMA 0692 3-20?efers to Bact atter& J11The direct !a+or price rate (aria&ce for Ma" is

A# ;'00 fa(ora+!e#

)# 4'200 u&fa(ora+!e#

C# ;'00 u&fa(ora+!e#

,# 6'000 fa(ora+!e#

[17] Source: CMA 0692 3-21?efers to Bact atter& J11The direct !a+or usage efficie&c" (aria&ce for Ma" is

A# 7';70 fa(ora+!e#

)# 6'000 u&fa(ora+!e#

C# 7';70 u&fa(ora+!e#

,# 6'000 fa(ora+!e#

[16] Source: CMA 1249 -10The fi%ed o(erhead (o!u.e (aria&ce is the

A# Measure of the !ost profits fro. the !ac of sa!es(o!u.e#

)# A.ou&t of the u&derapp!ied or o(erapp!ied fi%edo(erhead costs#

C# ote&tia! cost reductio& that ca& +e achie(ed fro.+etter cost co&tro!#

,# Measure of productio& i&efficie&c"#

[14] Source: CMA 1249 -11The +est +asis upo& which cost sta&dards shou!d +e set to.easure co&tro!!a+!e productio& i&efficie&cies is

A# $&gi&eeri&g sta&dards +ased o& idea!perfor.a&ce#

)# Dor.a! capacit"#

C# ?ece&t a(erage historica! perfor.a&ce#

,# $&gi&eeri&g sta&dards +ased o& attai&a+!eperfor.a&ce#

[1;] Source: CMA 06; -26$ach u&it of roduct QI-6 reuires three direct !a+orhours# $.p!o"ee +e&efit costs are treated as direct !a+orcosts# ,ata o& direct !a+or are

Du.+er of direct e.p!o"ees 27*ee!" producti(e hours per e.p!o"ee 37$sti.ated wee!" wages per e.p!o"ee 27$.p!o"ee +e&efits re!ated to wee!" wages 278The sta&dard direct !a+or cost per u&it of roduct QI-6

is

A# 21#00#



)# 26#27#

C# 29#0#

,# 36#47#

[19] Source: CMA 06;4 -16The fo!!owi&g i&for.atio& is a(ai!a+!e for the Mitche!(i!!eroducts Co.pa&" for the .o&th of Hu!"#

Master )udget Actua! ------------- -------@&its '000 3';00Sa!es re(e&ue 60'000 73'200Faria+!e .a&ufacturi&g costs 16'000 19'000Bi%ed .a&ufacturi&g costs 17'000 16'000Faria+!e se!!i&g a&d ad.i&istrati(e e%pe&se ;'000 4'600Bi%ed se!!i&g a&d ad.i&istrati(e e%pe&se 9'000 10'000The co&tri+utio& .argi& (o!u.e (aria&ce for the .o&th ofHu!" wou!d +e

A# 00 u&fa(ora+!e#

)# 1';00 u&fa(ora+!e#

C# 200 fa(ora+!e#

,# 6';00 u&fa(ora+!e#

[170] Source: CMA 12;4 -30Todco p!a&&ed to produce 3'000 u&its of its si&g!e product'Teragra.' duri&g Do(e.+er# The sta&dard specificatio&sfor o&e u&it of Teragra. i&c!ude si% pou&ds of .ateria!s at#30 per pou&d# Actua! productio& i& Do(e.+er was3'100 u&its of Teragra.# The accou&ta&t co.puted afa(ora+!e .ateria!s purchase price (aria&ce of 3;0 a&d a&

u&fa(ora+!e .ateria!s ua&tit" (aria&ce of 120# )ased o&these (aria&ces' o&e cou!d co&c!ude that

A# More .ateria!s were purchased tha& were used#

)# More .ateria!s were used tha& were purchased#

C# The actua! cost of .ateria!s was !ess tha& thesta&dard cost#

,# The actua! usage of .ateria!s was !ess tha& thesta&dard a!!owed#

[171] Source: CMA 12;9 -1Faria+!e o(erhead is app!ied o& the +asis of sta&dard direct

!a+or hours# f' for a gi(e& period' the direct !a+orefficie&c" (aria&ce is u&fa(ora+!e' the (aria+!e o(erheadefficie&c" (aria&ce wi!! +e

A# Ba(ora+!e#

)# @&fa(ora+!e#

C# The sa.e a.ou&t as the !a+or efficie&c" (aria&ce#

,# &deter.i&a+!e +ecause it is &ot re!ated to the!a+or efficie&c" (aria&ce#

[172] Source: CMA 12;9 - A fa(ora+!e .ateria! price (aria&ce coup!ed with a&

u&fa(ora+!e .ateria! usage (aria&ce wou!d .ost !ie!"resu!t fro.

A# Ka+or efficie&c" pro+!e.s#

)# The purchase a&d use of higher tha& sta&dardua!it" .ateria!#

C# The purchase a&d use of !ower tha& sta&dardua!it" .ateria!#

,# Ka+or .i% pro+!e.s#

[173] Source: CMA 12;9 -7*hich o&e of the fo!!owi&g (aria&ces is .ost co&tro!!a+!e+" the productio& co&tro! super(isor

A# Materia! price (aria&ce#

)# Materia! usage (aria&ce#

C# Faria+!e o(erhead spe&di&g (aria&ce#

,# Bi%ed o(erhead +udget (aria&ce#

[Bact atter& J12]Bra&!i& G!ass *ors5 productio& +udget for the "ear

e&ded Do(e.+er 30 was +ased o& 200'000 u&its# $achu&it reuires two sta&dard hours of !a+or for co.p!etio&#Tota! o(erhead was +udgeted at 900'000 for the "ear'a&d the fi%ed o(erhead rate was esti.ated to +e 3#00 peru&it# )oth fi%ed a&d (aria+!e o(erhead are assig&ed to theproduct o& the +asis of direct !a+or hours# The actua! datafor the "ear e&ded Do(e.+er 30 are prese&ted as fo!!ows#

Actua! productio& i& u&its 19;'000 Actua! direct !a+or hours 0'000 Actua! (aria+!e o(erhead 372'000 Actua! fi%ed o(erhead 747'000

[17] Source: CMA 1290 3-7?efers to Bact atter& J12The sta&dard hours a!!owed for actua! productio& for the

"ear e&ded Do(e.+er 30 tota!

A# 24'700#

)# 396'000#

C# 00'000#

,# 97'000#

[177] Source: CMA 1290 3-6?efers to Bact atter& J12Bra&!i&5s (aria+!e o(erhead efficie&c" (aria&ce for the "earis

A# 33'000 u&fa(ora+!e#

)# 37'720 fa(ora+!e#

C# 66'000 u&fa(ora+!e#

,# 33'000 fa(ora+!e#

[176] Source: CMA 1290 3-4?efers to Bact atter& J12Bra&!i&5s (aria+!e o(erhead spe&di&g (aria&ce for the "earis

A# 20'000 u&fa(ora+!e#

)# 19';00 fa(ora+!e#

C# 22'000 u&fa(ora+!e#



,# 20'000 fa(ora+!e#

[174] Source: CMA 1290 3-;?efers to Bact atter& J12Bra&!i&5s fi%ed o(erhead spe&di&g (aria&ce for the "ear is

A# 19'000 fa(ora+!e#

)# 27'000 fa(ora+!e#

C# 7'470 fa(ora+!e#

,# 27'000 u&fa(ora+!e#

[17;] Source: CMA 1290 3-9?efers to Bact atter& J12The fi%ed o(erhead app!ied to Bra&!i&5s productio& for the"ear is

A# ;'200#

)# 747'000#

C# 79'000#

,# 600'000#

[179] Source: CMA 1290 3-10?efers to Bact atter& J12Bra&!i&5s fi%ed o(erhead (o!u.e (aria&ce for the "ear is

A# 6'000 u&fa(ora+!e#

)# 19'000 fa(ora+!e#

C# 27'000 fa(ora+!e#

,# 77'000 u&fa(ora+!e#

[Bact atter& J13] Arrow &dustries e.p!o"s a sta&dard cost s"ste. i& whichdirect .ateria!s i&(e&tor" is carried at sta&dard cost# Arrowhas esta+!ished the fo!!owi&g sta&dards for the pri.e costsof o&e u&it of product#

Sta&dard Sta&dard Sta&dard =ua&tit" rice Cost -------- --------------- -------- ,irect .ateria!s ; pou&ds 1#;0 per pou&d 1#0 ,irect !a+or #27 hour ;#00 per hour 2#00 ------ 16#0 OOOOOO

,uri&g Do(e.+er' Arrow purchased 160'000 pou&ds ofdirect .ateria!s at a tota! cost of 30'000# The tota!factor" wages for Do(e.+er were 2'000' 908 of whichwere for direct !a+or# Arrow .a&ufactured 19'000 u&its ofproduct duri&g Do(e.+er usi&g 12'700 pou&ds of direct.ateria!s a&d 7'000 direct !a+or hours#

[160] Source: CMA 1291 3-1?efers to Bact atter& J13The direct .ateria!s purchase price (aria&ce for Do(e.+eris

A# 16'000 fa(ora+!e#

)# 16'000 u&fa(ora+!e#

C# 1'270 fa(ora+!e#

,# 1'270 u&fa(ora+!e#

[161] Source: CMA 1291 3-2?efers to Bact atter& J13The direct .ateria!s usage ua&tit" (aria&ce forDo(e.+er is


)# 1'100 fa(ora+!e#

C# 14'100 u&fa(ora+!e#

,# 14'100 fa(ora+!e#

[162] Source: CMA 1291 3-3?efers to Bact atter& J13The direct !a+or price rate (aria&ce for Do(e.+er is

A# 2'200 fa(ora+!e#

)# 1'900 u&fa(ora+!e#

C# 2'000 u&fa(ora+!e#

,# 2'090 fa(ora+!e#

[163] Source: CMA 1291 3-

?efers to Bact atter& J13The direct !a+or usage efficie&c" (aria&ce for Do(e.+eris

A# 2'200 fa(ora+!e#

)# 2'000 fa(ora+!e#

C# 2'000 u&fa(ora+!e#

,# 1';00 u&fa(ora+!e#

[Bact atter& J1]Bo!so. Bashio&s se!!s a !i&e of wo.e&5s dresses# Bo!so.5sperfor.a&ce report for Do(e.+er fo!!ows#

Actua! )udget -------- -------- ,resses so!d 7'000 6'000 OOOOOOOO OOOOOOOO Sa!es 237'000 300'000 Faria+!e costs 17'000 1;0'000 -------- -------- Co&tri+utio& .argi& 90'000 120'000 Bi%ed costs ;'000 ;0'000 -------- --------

perati&g i&co.e 6'000 0'000 OOOOOOOO OOOOOOOOThe co.pa&" uses a f!e%i+!e +udget to a&a!"/e itsperfor.a&ce a&d to .easure the effect o& operati&g i&co.eof the (arious factors affecti&g the differe&ce +etwee&+udgeted a&d actua! operati&g i&co.e#

[16] Source: CMA 1291 3-1?efers to Bact atter& J1The effect of the sa!es (o!u.e (aria&ce o& the co&tri+utio&.argi& for Do(e.+er is

A# 30'000 u&fa(ora+!e#

)# 1;'000 u&fa(ora+!e#

C# 20'000 u&fa(ora+!e#

,# 17'000 u&fa(ora+!e#



[167] Source: CMA 1291 3-17?efers to Bact atter& J1The sa!es price (aria&ce for Do(e.+er is

A# 30'000 u&fa(ora+!e#

)# 1;'000 u&fa(ora+!e#

C# 20'000 u&fa(ora+!e#

,# 17'000 u&fa(ora+!e#

[166] Source: CMA 1291 3-16?efers to Bact atter& J1The (aria+!e cost f!e%i+!e +udget (aria&ce for Do(e.+er is

A# 7'000 fa(ora+!e#

)# 7'000 u&fa(ora+!e#

C# '000 fa(ora+!e#

,# '000 u&fa(ora+!e#

[164] Source: CMA 1291 3-14?efers to Bact atter& J1The fi%ed cost (aria&ce for Do(e.+er is

A# 7'000 fa(ora+!e#

)# 7'000 u&fa(ora+!e#

C# '000 fa(ora+!e#

,# '000 u&fa(ora+!e#

[16;] Source: CMA 1291 3-1;

*hat additio&a! i&for.atio& is &eeded for Bo!so. toca!cu!ate the do!!ar i.pact of a cha&ge i& .aret share o&operati&g i&co.e for Do(e.+er

A# Bo!so.5s +udgeted .aret share a&d the+udgeted tota! .aret si/e#

)# Bo!so.5s +udgeted .aret share' the +udgetedtota! .aret si/e' a&d a(erage .aret se!!i&g price#

C# Bo!so.5s +udgeted .aret share a&d the actua!tota! .aret si/e#

,# Bo!so.5s actua! .aret share a&d the actua! tota!.aret si/e#

[Bact atter& J17] A .a&ufacturer has the fo!!owi&g direct .ateria!s sta&dardfor o&e of its products#

,irect .ateria!s: 3 pou&ds 1#60Epou&d O #;0The co.pa&" records a!! i&(e&tor" at sta&dard cost#,ata for the curre&t period regardi&g the .a&ufacturer5s+udgeted a&d actua! productio& for the product as we!! asdirect .ateria!s purchases a&d issues to productio& for.a&ufacture of the product are prese&ted as fo!!ows#

)udgeted productio& for the period ;'000 u&its Actua! productio& for the period 4'700 u&its ,irect .ateria!s purchases: ou&ds purchased 27'000 pou&ds

Tota! cost 3;'470 ,irect .ateria!s issued to productio& 23'000 pou&ds

[169] Source: CA 1192 F-20

?efers to Bact atter& J17The direct .ateria!s price (aria&ce for the curre&t period is

A# 1'127 fa(ora+!e#

)# 1'170 fa(ora+!e#

C# 1'200 fa(ora+!e#

,# 1'270 fa(ora+!e#

[140] Source: CA 1192 F-21?efers to Bact atter& J17The .ateria!s efficie&c" (aria&ce for the curre&t period is

A# 447 u&fa(ora+!e#

)# ;00 u&fa(ora+!e#

C# 1'600 fa(ora+!e#

,# 3'200 fa(ora+!e#

[Bact atter& J16] A co.pa&" .a&ufactures o&e product a&d has a sta&dardcost s"ste.# & Apri! the co.pa&" had the fo!!owi&ge%perie&ce:

,irect ,irect Materia!s Ka+or --------- ------ Actua! Eu&it of i&put !+s# hrs# 2; 1; Sta&dard priceEu&it of i&put 2 20 Sta&dard i&puts a!!owed per u&it of output 10 Actua! u&its of i&put 190'000 4;'000 Actua! u&its of output 20'000 20'000

[141] Source: CA 079 -42?efers to Bact atter& J16The direct .ateria!s price (aria&ce for Apri! is

A# 460'000 fa(ora+!e#

)# 460'000 u&fa(ora+!e#

C# 20'000 u&fa(ora+!e#

,# 176'000 fa(ora+!e#

[142] Source: CA 079 -43?efers to Bact atter& J16The direct .ateria!s efficie&c" (aria&ce for Apri! is

A# 176'000 fa(ora+!e#

)# 20'000 fa(ora+!e#

C# 20'000 u&fa(ora+!e#

,# 460'000 u&fa(ora+!e#

[143] Source: CA 079 -4?efers to Bact atter& J16The direct !a+or rate (aria&ce for Apri! is

A# 20'000 fa(ora+!e#

)# 176'000 u&fa(ora+!e#

C# 176'000 fa(ora+!e#



,# 0'000 u&fa(ora+!e#

[Bact atter& J14]&e of the ite.s produced +" a .a&ufacturer of !aw& a&dgarde& too!s is a chai& saw# The direct !a+or sta&dard forasse.+!i&g a&d testi&g a chai& saw is 2#7 hours at ; perhour# )udgeted productio& for cto+er was 1'200 u&its# Actua! productio& duri&g the .o&th was 1'000 u&its' a&ddirect !a+or cost was 24';0 for 3'200 hours#

[14] Source: CA 11;9 F-14?efers to Bact atter& J14@si&g a two-(aria&ce s"ste.' what was the direct !a+orprice rate (aria&ce for cto+er

A# 2'20 fa(ora+!e#

)# 2'20 u&fa(ora+!e#

C# 3';0 fa(ora+!e#

,# 7'600 u&fa(ora+!e#

[147] Source: CA 11;9 F-1;?efers to Bact atter& J14@si&g a two-(aria&ce s"ste.' what is the direct !a+orefficie&c" (aria&ce


)# 7'600 fa(ora+!e#

C# 7'600 u&fa(ora+!e#

,# 6'090 fa(ora+!e#

[146] Source: CA 0790 F-17 A .a&ager prepared the fo!!owi&g ta+!e +" which to

a&a!"/e !a+or costs for the .o&th:

Actua! ours Actua! ours Sta&dard ours at at at Actua! ?ate Sta&dard ?ate Sta&dard ?ate ----------- ------------- -------------- 10'000 9';00 ;';20*hat (aria&ce was 9;0

A# Ka+or efficie&c" (aria&ce#

)# Ka+or rate (aria&ce#

C# Fo!u.e (aria&ce#

,# Ka+or spe&di&g (aria&ce#

[144] Source: CA 1190 F-7& a traditio&a! .a&ufacturi&g operatio&' direct costs wou!d&or.a!!" i&c!ude

A# Machi&e repairs i& a& auto.o+i!e factor"#

)# $!ectricit" i& a& e!ectro&ics p!a&t#

C# *ood i& a fur&iture factor"#

,# Co..issio&s paid to sa!es perso&&e!#

[14;] Source: CA 1190 F-6

(erhead costs usua!!" i&c!ude

A# A+&or.a! spoi!age#

)# (erti.e pre.iu.s#

C# ri.e costs#

,# Materia!s price (aria&ces#

[149] Source: CA 1191 F-17The tota! +udgeted direct !a+or cost of a co.pa&" for the.o&th was set at 47'000 whe& 7'000 u&its were p!a&&edto +e produced# The fo!!owi&g sta&dard cost' stated i&ter.s of direct !a+or hours ,K' was used to de(e!opthe +udget for direct !a+or cost:

1#27 ,K % 12#00E,K O 17#00Eu&it producedThe actua! operati&g resu!ts for the .o&th were as fo!!ows: Actua! u&its produced 7'200 Actua! direct !a+or hours wored 6'600 Actua! direct !a+or cost 44'220The direct !a+or efficie&c" (aria&ce for the .o&th wou!d +e

A# '200 u&fa(ora+!e#

)# 3'000 u&fa(ora+!e#

C# 2'220 u&fa(ora+!e#

,# 1'200 u&fa(ora+!e#

[1;0] Source: CA 1191 F-16 A co.pa&" produci&g a si&g!e product e.p!o"s thefo!!owi&g direct .ateria! cost sta&dard for each u&it ofoutput:

3 pou&ds of .ateria! % Epou&d O 12Eoutput u&it,ata regardi&g the operatio&s for the curre&t .o&th are asfo!!ows:!a&&ed productio& 26'000 u&its Actua! productio& 23'000 u&its Actua! purchases of direct

.ateria!s 47'000 pou&ds 294'000,irect .ateria!s used i& productio& 40'000 pou&ds*hat wou!d +e the a.ou&t of the direct .ateria!s purchaseprice (aria&ce a&d direct .ateria!s ua&tit" (aria&ce thatthe co.pa&" wou!d recog&i/e for the .o&th

urchase rice Faria&ce =ua&tit" Faria&ce ---------------- ------------------- A#

3'120 fa(ora+!e 32'000 fa(ora+!e )#

3'000 fa(ora+!e 2'000 u&fa(ora+!e

C#

3'000 fa(ora+!e '000 u&fa(ora+!e ,#

2';00 fa(ora+!e '000 u&fa(ora+!e

[1;1] Source: CMA 06;3 -7 A differe&ce +etwee& sta&dard costs used for cost co&tro!a&d the +udgeted costs of the sa.e .a&ufacturi&g effort

A# Ca& e%ist +ecause sta&dard costs represe&t whatcosts shou!d +e' whereas +udgeted costs aree%pected actua! costs#

)# Ca& e%ist +ecause +udgeted costs are historica!costs' whereas sta&dard costs are +ased o&e&gi&eeri&g studies#



C# Ca& e%ist +ecause +udgeted costs i&c!ude so.es!ac' whereas sta&dard costs do &ot#

,# Ca& e%ist +ecause sta&dard costs i&c!ude so.es!ac' whereas +udgeted costs do &ot#

[1;2] Source: CA 0749 F-2*hich of the fo!!owi&g factors shou!d &ot +e co&sideredwhe& decidi&g whether to i&(estigate a (aria&ce

A# Mag&itude of the (aria&ce#

)# Tre&d of the (aria&ces o(er ti.e#

C# Kie!ihood that a& i&(estigatio& wi!! e!i.i&ate futureoccurre&ces of the (aria&ce#

,# *hether the (aria&ce is fa(ora+!e or u&fa(ora+!e#

[1;3] Source: CA 11;4 -10*he& ite.s are tra&sferred fro. stores to productio&' a&accou&ta&t de+its wor-i&-process a&d credits .ateria!saccou&ts# ,uri&g productio&' a .ateria!s ua&tit" (aria&ce

.a" occur# The .ateria!s ua&tit" (aria&ce is de+ited for a&u&fa(ora+!e (aria&ce a&d credited for a fa(ora+!e (aria&ce#The i&te&t of (aria&ce e&tries is to pro(ide

A# Accou&ta+i!it" for .ateria!s !ost duri&g productio&#

)# A .ea&s of safeguardi&g assets i& the custod" ofthe s"ste.#

C# Co.p!ia&ce with GAA#

,# &for.atio& for use i& co&tro!!i&g the cost ofproductio&#

[1;] Source: CA 07;2 F-22

*hich of the fo!!owi&g is !east !ie!" to cause a&u&fa(ora+!e .ateria!s ua&tit" usage (aria&ce

A# Materia!s that do &ot .eet specificatio&s#

)# Machi&er" that has &ot +ee& .ai&tai&ed proper!"#

C# Ka+or that possesses si!!s eua! to those reuired+" the sta&dards#

,# Schedu!i&g of su+sta&tia! o(erti.e#

[1;7] Source: u+!isherThe .ateria!s .i% (aria&ce eua!s

A# &puts a!!owed - i&puts used % +udgetedweighted-a(erage .ateria!s price#

)# &puts a!!owed - i&puts used % +udgetedweighted-a(erage !a+or rate#

C# ・i&puts a!!owed - i&puts used % +udgetedspecific .ateria!s prices - +udgetedweighted-a(erage .ateria!s price#

,# ・i&puts a!!owed - i&puts used % actua! specific.ateria!s prices - +udgeted weighted-a(erage.ateria!s price#

[1;6] Source: u+!isher

The .ateria!s "ie!d (aria&ce eua!s

A# &puts a!!owed - i&puts used % +udgeted a(erage.ateria!s price#

)# ・i&puts a!!owed - i&puts used % +udgetedspecific !a+or rate - +udgeted weighted-a(erage!a+or rate#

C# &puts a!!owed - i&puts used % +udgetedweighted-a(erage !a+or rate#

,# ・i&puts a!!owed - i&puts used % +udgetedspecific .ateria!s prices - +udgetedweighted-a(erage .ateria!s price#

[1;4] Source: u+!isherThe !a+or "ie!d (aria&ce eua!s




,# ・i&puts a!!owed - i&puts used % +udgetedspecific .ateria!s prices - +udgetedweighted-a(erage .ateria!s price#

[1;;] Source: u+!isherThe !a+or .i% (aria&ce eua!s




,# ・i&puts a!!owed - i&puts used % actua! specific!a+or rate - +udgeted weighted-a(erage !a+or rate#

[Bact atter& J1;]Ka&deau Ma&ufacturi&g Co.pa&" has a process costaccou&ti&g s"ste.# A .o&th!" a&a!"sis co.pares actua!resu!ts with +oth a .o&th!" p!a& a&d a f!e%i+!e +udget#Sta&dard direct !a+or rates used i& the f!e%i+!e +udget areesta+!ished at the ti.e the a&&ua! p!a& is for.u!ated a&dhe!d co&sta&t for the e&tire "ear# Sta&dard direct !a+orrates i& effect for the fisca! "ear e&di&g Hu&e 30 a&dsta&dard hours a!!owed for the output i& Apri! are

Sta&dard ,K Sta&dard ,K ?ate per our A!!owed for utput ------------- ------------------ Ka+or c!ass ;#00 700 Ka+or c!ass 4#00 700 Ka+or c!ass 7#00 700The wage rates for each !a+or c!ass i&creased o& Ha&uar" 1u&der the ter.s of a &ew u&io& co&tract &egotiated i&,ece.+er of the pre(ious fisca! "ear# The sta&dard wagerates were &ot re(ised to ref!ect the &ew co&tract#

The actua! direct !a+or hours ,K wored a&d the actua!direct !a+or rates per hour e%perie&ced for the .o&th of Apri! were as fo!!ows:

Actua! ,irect Actua! ,irect Ka+or ?ate per our Ka+or ours ------------------- -------------Ka+or c!ass ;#70 770



Ka+or c!ass 4#70 670Ka+or c!ass 7#0 347

[1;9] Source: u+!isher?efers to Bact atter& J1;*hat is the !a+or "ie!d (aria&ce for Ka&deau i& Apri!rou&ded

A# 700 u&fa(ora+!e#

)# 470 u&fa(ora+!e#

C# ;27 fa(ora+!e#

,# 1'700 fa(ora+!e#

[190] Source: u+!isher?efers to Bact atter& J1;*hat is the !a+or .i% (aria&ce for Ka&deau i& Apri!

A# 327#00 u&fa(ora+!e#

)# 66#64 u&fa(ora+!e#

C# 1;0#00 fa(ora+!e#

,# 70#00 fa(ora+!e#

[191] Source: u+!isherThe !a+or .i% a&d !a+or "ie!d (aria&ces together eua! the

A# Tota! !a+or (aria&ce#

)# Ka+or rate (aria&ce#

C# Ka+or efficie&c" (aria&ce#

,# Su. of the !a+or efficie&c" a&d o(erheadefficie&c" (aria&ces#

[Bact atter& J19],ori Casti&gs' a >o+-order shop' uses a fu!!-a+sorptio&'sta&dard-cost s"ste. to accou&t for its productio& costs#The E costs are app!ied o& a direct-!a+or-hour +asis#

[192] Source: CMA 12; -1?efers to Bact atter& J19,ori5s choice of a productio& (o!u.e as a de&o.i&ator forca!cu!ati&g its factor" E rate has

A# A& effect o& the (aria+!e factor" E rate forapp!"i&g costs to productio&#

)# Do effect o& the fi%ed factor" E +udget

(aria&ce#

C# Do effect o& the fi%ed factor" E productio&(o!u.e (aria&ce#

,# Do effect o& the o(era!! &et fi%ed factor" E(aria&ce#

[193] Source: CMA 12; -2?efers to Bact atter& J19 A productio& (o!u.e (aria&ce wi!! e%ist for ,ori i& a .o&thwhe&

A# roductio& (o!u.e differs fro. sa!es (o!u.e#

)# Actua! direct !a+or hours differ fro. sta&darda!!owed direct !a+or hours#

C# The fi%ed factor" E app!ied o& the +asis of

sta&dard a!!owed direct !a+or hours differs fro.actua! fi%ed factor" E#

,# The fi%ed factor" E app!ied o& the +asis ofsta&dard a!!owed direct !a+or hours differs fro. the+udgeted fi%ed factor" E#

[19] Source: CMA 12; -?efers to Bact atter& J19The a.ou&t of fi%ed factor" E that ,ori wi!! app!" tofi&ished productio& is the

A# Actua! direct !a+or hours ti.es the sta&dard fi%edfactor" E rate per direct !a+or hour#

)# Sta&dard a!!owed direct !a+or hours for the actua!u&its of fi&ished output ti.es the sta&dard fi%edfactor" E rate per direct !a+or hour#

C# Sta&dard u&its of output for the actua! direct !a+orhours wored ti.es the sta&dard fi%ed factor" Erate per u&it of output#

,# Actua! fi%ed factor" E cost per direct !a+or

hour ti.es the sta&dard a!!owed direct !a+or hours#

[197] Source: CMA 1243 -13*hich of these (aria&ces is !east sig&ifica&t for costco&tro!

A# Ka+or price (aria&ce#

)# Materia!s ua&tit" (aria&ce#

C# Bi%ed E (o!u.e (aria&ce#

,# Faria+!e E spe&di&g (aria&ce#

[196] Source: H#)# ?o.a!Margo!os' &c# e&ds the .o&th with a (o!u.e (aria&ce of6'360 u&fa(ora+!e# f +udgeted fi%ed E was ;0'000'E was app!ied o& the +asis of 32'000 +udgeted .achi&ehours' a&d +udgeted (aria+!e E was 140'000' whatwere the actua! &u.+er of .achi&e hours A for the.o&th

A# 32'27

)# 32'31;

C# 32'000

,# 31'746

[194] Source: CMA 06;4 -14Se!o .ports uses f!e%i+!e +udgeti&g for the co&tro! ofcosts# The co.pa&"5s a&&ua! .aster +udget i&c!udes32'000 for fi%ed productio& super(isor" sa!aries at a(o!u.e of 1;0'000 u&its# Super(isor" sa!aries are e%pectedto +e i&curred u&ifor.!" through the "ear# ,uri&gSepte.+er' 17'470 u&its were produced a&d productio&super(isor" sa!aries i&curred were 2;'000# Aperfor.a&ce report for Septe.+er shou!d ref!ect a +udget(aria&ce of

A# 370 B#

)# 370 @#

C# 1'000 @#

,# 1'000 B#



[Bact atter& J20]atie Co.pa&" uses a sta&dard BB' process-costs"ste. to accou&t for its o&!" product' Mituea# atie hasfou&d that direct .achi&e hours ,M pro(ide the +estesti.ate of the app!icatio& of E# Bour sta&dard direct.achi&e hours are a!!owed for each u&it#

@si&g si.p!e !i&ear regressio& a&a!"sis i& the for. " O a N+,M' gi(e& that A eua!s fi%ed costs a&d ) eua!s(aria+!e costs' atie has de(e!oped the fo!!owi&g E+udget for a &or.a! acti(it" !e(e! of 100'000 direct.achi&e hours:

T$M " a + ---------------------------- -------- -------- Supp!ies 0#70 &direct Ka+or 7'470 6#70 ,epreciatio& -- !a&t a&d $uip.e&t 24'000 ropert" Ta%es a&d &sura&ce 32'300 ?epairs a&d Mai&te&a&ce 1'770 1#27 @ti!ities 3'00 #47 -------- ------- Tota! E 132'000 13#00

OOOOOOOO OOOOOOO Actua! fi%ed E i&curred was 133'270' a&d actua!(aria+!e E was 1'227'000# atie produced 23'700eui(a!e&t u&its duri&g the "ear usi&g 9;'400 direct .achi&ehours#

[19;] Source: K#H# McCarth"?efers to Bact atter& J20*hat is the sta&dard E rate

A# 13#00 per ,M#

)# 1#32 per ,M

C# 1#32 per ,M#

,# 13#46 per ,M#

[199] Source: K#H# McCarth"?efers to Bact atter& J20ow .uch E shou!d +e app!ied to productio&

A# 1'13'3;

)# 1'32'000

C# 1'37;'270

,# 1'36'0;0

[200] Source: K#H# McCarth"?efers to Bact atter& J20*hat is the tota! E (aria&ce

A# 12'140 u&fa(ora+!e#

)# 77'13 u&fa(ora+!e#

C# 77'13 fa(ora+!e#

,# 43'470 fa(ora+!e#

[201] Source: CA 11;6 F-12The sa!es .i% (aria&ce

A# *i!! +e a& u&fa(ora+!e 78 whe&e(er a 78decrease occurs i& a co.pa&"5s o(era!! sa!es (o!u.e#

)# *i!! +e fa(ora+!e whe& a co.pa&" se!!s fewerproducts +eari&g u&it co&tri+utio& .argi&s higher tha&a(erage#

C# Measures the effect of the de(iatio& fro. the+udgeted weighted-a(erage co&tri+utio& .argi& peru&it associated with a cha&ge i& the ua&tities ofproducts i& the .i%#

,# $ua!s the differe&ce +etwee& the +udgetedweighted-a(erage .ateria!s u&it costs for the actua!a&d p!a&&ed .i%es' ti.es the actua! .ateria!s i&put#

[202] Source: CA 11;7 F-12 Actua! a&d +udgeted i&for.atio& a+out the sa!es of aproduct are prese&ted for Hu&e as fo!!ows#

Actua! )udget ------- --------@&its ;'000 10'000Sa!es ?e(e&ue 92'000 107'000The sa!es price (aria&ce for Hu&e was

A# ;'000 fa(ora+!e#

)# 10'000 fa(ora+!e#

C# 10'000 u&fa(ora+!e#

,# 10'700 u&fa(ora+!e#

[203] Source: CA 1190 F-1;The fo!!owi&g e%hi+it ref!ects a su..ar" of perfor.a&ce fora si&g!e ite. of a retai! store5s i&(e&tor" for Apri!#

B!e%i+!e Static Actua! )udget B!e%i+!e Master ?esu!ts Faria&ces )udget )udget

-------- --------- -------- --------Sa!es u&its 11'000 -- 11'000 12'000 -------- -------- --------?e(e&ue sa!es 20;'000 12'000 @ 220'00020'000Faria+!e costs 121'000 11'000 @ 110'000 120'000 -------- -------- --------Co&tri+utio& .argi& ;4'000 23'000 @ 110'000 120'000Bi%ed costs 42'000 -- 42'000 42'000 -------- -------- --------perati&g i&co.e 17'000 23'000 @ 3;'000 ;'000 OOOOOOOO OOOOOOOOO OOOOOOOO OOOOOOOOThe sa!es (o!u.e (aria&ce is

A# 1'000 B#

)# 10'000 @#

C# 11'000 B#

,# 12'000 @#

[20] Source: CA 07;9 F-1The fo!!owi&g data are a(ai!a+!e for Hu!":

)udget Actua! -------------- --------------Sa!es 0'000 u&its 2'000 u&itsSe!!i&g price 6 per u&it 7#40 per u&it

Faria+!e cost 3#70 per u&it 3#0 per u&it*hat is the sa!es ua&tit" (aria&ce for Hu!"

A# 7'000 fa(ora+!e#



)# '600 fa(ora+!e#

C# 12'000 u&fa(ora+!e#

,# 12'600 u&fa(ora+!e#

[207] Source: u+!isher Assu.e .ateria!s are purchased at 7 per u&it for 670a&d their sta&dard price is per u&it a&d that price(aria&ces are recorded at the ti.e of purchase# *hat is the >our&a! e&tr" if a!! .ateria!s purchased were used toco.p!ete a pro>ect that shou!d &or.a!!" reuire 100 u&its

A#

*or-i&-process 670 ,M price (aria&ce 130 &(e&tor" 720 )#

*or-i&-process 720 ,M price (aria&ce 130 &(e&tor" 670

C#

*or-i&-process 00 ,M ua&tit" (aria&ce 120 &(e&tor" 720 ,#

*or-i&-process 720 ,M ua&tit" (aria&ce 120 &(e&tor" 00

[206] Source: u+!isherTo ad>ust fi&ished goods i&(e&tor" for e%ter&a! reporti&gpurposes to ref!ect the differe&ce +etwee& direct costi&ga&d a+sorptio& costi&g' which of the fo!!owi&g >our&a!

e&tries .a" +e .ade

A# Bi&ished goods i&(e&tor"

ad>ust.e&t accou&t QQ Bi%ed E QQ )# Bi%ed E QQ

*or-i&-process QQ C# Bi&ished goods QQ

Bi%ed E QQ ,# Bi&ished goods QQ

*or-i&-process QQ

[204] Source: u+!isher A!pha Co.pa&" had a fa(ora+!e (aria+!e E efficie&c"(aria&ce of 1'600 a&d a& u&fa(ora+!e spe&di&g (aria&ceof 267# *hat e&tr" c!oses these accou&ts

A# &co.e su..ar" 1'337

Faria+!e E spe&di&g (aria&ce 267 Faria+!e E efficie&c" (aria&ce 1'600 )# Faria&ce su..ar" 1';67

Cost of goods so!d 1';67 C# Faria+!e E

efficie&c" (aria&ce 1'600 Faria+!e E spe&di&g (aria&ce 267

&co.e su..ar" 1'337 ,# Faria+!e E

efficie&c" (aria&ce 1'600 Faria+!e E spe&di&g (aria&ce 267 &co.e su..ar" 1';67

[20;] Source: u+!isher,irect !a+or costs are wages paid to

Machi&e Bactor" Corporate perators Super(isors Fice-reside&t --------- ----------- -------------- A#

es es es )#

es Do Do C#

Do es es ,#

Do Do es

[209] Source: u+!isher)right Co# .a&ufactures !ight +u!+s# The fo!!owi&g sa!arieswere i&c!uded i& )right5s .a&ufacturi&g costs for the "ear:

Machi&e operators 17'000 Bactor" super(isors 60'000 Machi&er" .echa&ics 27'000*hat is the a.ou&t of )right5s direct !a+or for the "ear

A# 230'000

)# 207'000

C# 140'000

,# 17'000

[210] Source: u+!isher)ut!er Co#5s productio& costs for Hu!" are

,irect .ateria!s 120'000 ,irect !a+or 10;'000 Bactor" o(erhead 6'000*hat is the a.ou&t of costs tracea+!e to specific products

A# 23'000

)# 22;'000

C# 120'000

,# 10;'000

[211] Source: u+!isher At!a&tic Co# used 200'000 of direct .ateria!s duri&g Hu&e# At Hu&e 30' At!a&tic5s direct .ateria!s i&(e&tor" was30'000 .ore tha& it was at Hu&e 1# *hat were At!a&tic5sdirect .ateria!s purchases duri&g Hu&e

A# 30'000

)# 140'000

C# 200'000

,# 230'000



[212] Source: u+!isher?ose Co#5s fi%ed .a&ufacturi&g o(erhead costs tota!ed170'000 a&d (aria+!e se!!i&g costs tota!ed 47'000# owshou!d these costs +e c!assified u&der (aria+!e costi&g

A# 0 period costs< 227'000 product costs#

)# 47'000 period costs< 170'000 product costs#

C# 170'000 period costs< 47'000 product costs#

,# 227'000 period costs< 0 product costs#

[213] Source: u+!isher A possi+!e short-ter. pro+!e. i& co&tro!!i&g o(erheadcosts wou!d +e detected +" which of the fo!!owi&g(aria&ces

A# )oth the fi%ed o(erhead spe&di&g (aria&ce a&d the(o!u.e (aria&ce#

)# )oth the (aria+!e o(erhead spe&di&g (aria&ce a&d

the (o!u.e (aria&ce#

C# The spe&di&g (aria&ce +ut &ot the (o!u.e(aria&ce#

,# The (o!u.e (aria&ce +ut &ot the fi%ed o(erheadspe&di&g (aria&ce#

[21] Source: u+!isher*hich of the fo!!owi&g sta&dard costi&g (aria&ces is the.ost co&tro!!a+!e +" a productio& .a&ager

A# (erhead efficie&c"#

)# Ka+or efficie&c"#

C# Materia!s usage#

,# (erhead (o!u.e#

[217] Source: u+!isherCara *i!!ia.s' a super(isor' co&tro!s her depart.e&t5scosts# The fo!!owi&g data re!ate to her depart.e&t for the.o&th of Hu&e:

Faria+!e factor" o(erhead-------------------------)udgeted +ased o& actua! i&put 100'000 Actua! 106'270Bi%ed factor" o(erhead

----------------------)udgeted 31'270 Actua! 33'470*hat was the depart.e&t5s tota! spe&di&g (aria&ce forHu&e

A# ;'470 @#

)# 6'270 @#

C# 3'470 B#

,# 2'700 @#


)e!! Co# .a&ufactures a si&g!e product with a sta&darddirect !a+or cost of 2 hours at 10#00 per hour# ,uri&gDo(e.+er' 1'700 u&its were produced reuiri&g 3'200hours at 10#27 per hour# *hat was the u&fa(ora+!e direct

!a+or efficie&c" (aria&ce

A# 2'070

)# 2'000

C# 1'270

,# 1'200

[214] Source: u+!isherThe fo!!owi&g data re!ate to Tra" Co#5s .a&ufacturi&goperatio&s:

Sta&dard direct !a+or hours per u&it 3 Actua! direct !a+or hours 2'700Du.+er of u&its produced ;'000Sta&dard (aria+!e o(erhead per sta&dard direct !a+or hour 2 Actua! (aria+!e o(erhead 6'000Tra"5s (aria+!e o(erhead efficie&c" (aria&ce is

A# 0

)# 1'000 @#

C# 2'000 B#

,# 3'000 B#

[21;] Source: u+!isher A sta&dard-cost s"ste. .a" +e used i&

Ho+-rder Acti(it"-)ased Costi&g rocess Costi&g Costi&g --------- --------------- -------------- A#

es es es

)#

es Do es C#

Do es Do ,#

Do Do Do

[219] Source: u+!isherTo .o&itor tota! cost' tota! re(e&ue' a&d &et profit +asedupo& productio& !e(e!s' a .a&ager shou!d use

A# )oth f!e%i+!e +udgeti&g a&d sta&dard costi&g#

)# Static +udgeti&g +ut &ot sta&dard costi&g#

C# Sta&dard costi&g +ut &ot f!e%i+!e +udgeti&g#

,# Static +udgeti&g a&d sta&dard costi&g#

[220] Source: u+!isher*he& ca!cu!ati&g (aria&ces fro. sta&dard costs' thediffere&ce +etwee& +udgeted fi%ed o(erhead a&d thea.ou&t app!ied "ie!ds a

A# rice (aria&ce#

)# Co.+i&ed price-ua&tit" (aria&ce#

C# Fo!u.e (aria&ce#

,# Mi% (aria&ce#



[221] Source: u+!isher*hich depart.e&t is t"pica!!" respo&si+!e for a .ateria!sprice (aria&ce

A# $&gi&eeri&g#

)# roductio&#

C# urchasi&g#

,# Sa!es#

[222] Source: u+!isher& which of the fo!!owi&g (aria&ces is the sta&dard u&it costused i& the ca!cu!atio&s

A# )oth the direct .ateria!s usage (aria&ce a&d thedirect .ateria!s price (aria&ce#

)# The direct .ateria!s usage (aria&ce +ut &ot thedirect .ateria!s price (aria&ce#

C# The direct !a+or price (aria&ce +ut &ot the direct!a+or efficie&c" (aria&ce#

,# The direct !a+or efficie&c" (aria&ce +ut &ot thedirect !a+or rate (aria&ce#

[223] Source: u+!isher,ata regardi&g Mi!! Co.pa&"5s direct .ateria!s costs is asfo!!ows:

Actua! u&it cost 2#00Sta&dard u&it cost 2#20 Actua! ua&tit" purchased a&d used 2;'000 u&itsSta&dard u&its of .ateria!s per u&it of fi&ished goods 3 u&its

Actua! output of fi&ished goods 9'000 u&its*hat is the direct .ateria!s price (aria&ce

A# 2';00 fa(ora+!e#

)# 7'600 u&fa(ora+!e#

C# 7'600 fa(ora+!e#

,# 2'200 u&fa(ora+!e#

[22] Source: u+!isherB!eece Co.pa&" uses a sta&dard-costi&g s"ste. i& re!atio&to its .a&ufacture of scar(es# $ach fi&ished scarf co&tai&s1#7 "ards of direct .ateria!s# owe(er' a 278 direct

.ateria!s spoi!age' which is ca!cu!ated +ased o& i&putua&tities' occurs duri&g the .a&ufacturi&g process# Thecost of the direct .ateria!s is 2#00 per "ard# The sta&darddirect .ateria!s cost per u&it of fi&ished product is

A# 2#27

)# 3#00

C# 3#47

,# #00

[227] Source: u+!isher*hich t"pe of (aria&ce wi!! ref!ect o(erti.e pre.iu.s

whe& the o(era!! (o!u.e of wor is greater tha& e%pected

A# Materia!s ua&tit"#

)# (erhead#

C# Ka+or efficie&c"#

,# ie!d#

[226] Source: u+!ishera&e Co.pa&"5s direct !a+or costs for Apri! are as fo!!ows:

Sta&dard direct !a+or hours 2'000 Actua! direct !a+or hours 1'200Tota! direct !a+or pa"ro!! 24'200,irect !a+or efficie&c" (aria&ce -- fa(ora+!e 3';0*hat is a&e5s direct !a+or rate (aria&ce

A# '96 u&fa(ora+!e#

)# 9'0 u&fa(ora+!e#

C# 9'0 fa(ora+!e#

,# 70'00 fa(ora+!e#

[224] Source: u+!isherKae5s direct !a+or costs for the .o&th of Ma" are asfo!!ows:

Sta&dard direct !a+or hours a!!owed 12'700 Actua! direct !a+or rate ;#27 Actua! direct !a+or hours 10'000,irect !a+or rate (aria&ce -- fa(ora+!e 7'600*hat was Kae5s sta&dard direct !a+or rate i& Ma"

A# 4#69

)# 4#;0

C# ;#27

,# ;#;1

[22;] Source: u+!isher)o!t Co# uses a sta&dard-cost s"ste.# )o!t5s direct !a+ori&for.atio& for Hu!" is as fo!!ows:

Sta&dard hours a!!owed for actua! productio& 3'000 Actua! rate paid per hour 9#37Sta&dard rate per hour ;#70Ka+or efficie&c" (aria&ce 1';40 @The actua! hours wored eua!ed

A# 2'4;0

)# 2';00

C# 3'200

,# 3'220

[229] Source: u+!isher,a&ie! Corporatio&5s direct !a+or costs for Hu&e were asfo!!ows:

Actua! direct !a+or hours 32'000Sta&dard direct !a+or hours 33'600,irect !a+or rate (aria&ce -- fa(ora+!e 6'420Sta&dard direct !a+or rate per hour 7#0Co.pute ,a&ie!5s tota! direct !a+or pa"ro!! for the .o&th of

Hu&e#

A# 17'760



)# 17';;0

C# 164'6;0

,# 16;'000

[230] Source: u+!isherMedia Co# .a&ufactures te!e(isio&s# The fo!!owi&g direct!a+or i&for.atio& re!ates to the .a&ufacture of te!e(isio&s#

Du.+er of worers 60Du.+er of product hours per wee' per worer 0ours reuired to .ae 1 u&it 3*ee!" wages per worer 600$.p!o"ee +e&efits treated as direct !a+or costs 208 of wages*hat is the sta&dard direct !a+or cost per u&it

A# 7

)# 36

C# 30

,# 1;

[231] Source: u+!isher@si&g the two-(aria&ce .ethod for a&a!"/i&g o(erhead'which of the fo!!owi&g (aria&ces co&tai&s +oth (aria+!e a&dfi%ed o(erhead e!e.e&ts

Co&tro!!a+!e )udget Fo!u.e $fficie&c" Faria&ce Faria&ce Faria&ce ------------ -------- ---------- A#

es es es

)#

es es Do C#

es Do Do ,#

Do Do Do

[232] Source: u+!isher@si&g the two-(aria&ce .ethod for a&a!"/i&g factor"o(erhead' which of the fo!!owi&g is used to co.pute theco&tro!!a+!e +udget (aria&ce

A# )oth a +udget a!!owa&ce +ased o& actua! i&puta&d a +udget a!!owa&ce +ased o& sta&dard i&put#

)# A +udget a!!owa&ce +ased o& actua! i&put +ut &ota +udget a!!owa&ce +ased o& sta&dard i&put#

C# A +udget a!!owa&ce +ased o& sta&dard i&put +ut&ot a +udget a!!owa&ce +ased o& actua! i&put#

,# A +udget a!!owa&ce +ased o& sta&dard i&put a&da +udget a!!owa&ce +ased o& app!ied fi%ed o(erhead#

[233] Source: u+!isher@si&g the three-(aria&ce .ethod for a&a!"/i&g factor"o(erhead' which of the fo!!owi&g is used to co.pute the

spe&di&g (aria&ce

)udget )udget Actua! A!!owa&ce A!!owa&ce

Bactor" )ased o& )ased o& (erhead Actua! &put Sta&dard &put -------- ------------ -------------- A#

es es es )#

es es Do C#

Do es es ,#

Do Do Do

[23] Source: u+!isher?i(er Co.pa&" uses a sta&dard-cost accou&ti&g s"ste.# tapp!ies o(erhead +ased o& direct !a+or hours# Thefo!!owi&g o(erhead costs a&d productio& data are a(ai!a+!efor March:

Sta&dard fi%ed o(erhead rate per ,K 1#70Sta&dard (aria+!e o(erhead rate per ,K 7#00

)udgeted .o&th!" ,K 30'000 Actua! ,K wored 2;'000Sta&dard ,K a!!owed for actua! productio& 24'700(era!! o(erhead (aria&ce -- fa(ora+!e 2'700*hat is the app!ied factor" o(erhead for March

A# 134'700

)# 146'270

C# 14;'470

,# 1;2'000

[237] Source: u+!isher*atso& Co.pa&" uses a predeter.i&ed factor" o(erheadapp!icatio& rate +ased o& direct !a+or cost# *atso&5s+udgeted factor" o(erhead was 476'000 +ased o& a+udgeted (o!u.e of 60'000 direct !a+or hours' at asta&dard direct !a+or rate of 4#20 per hour# Actua! factor"o(erhead a.ou&ted to 447'000 with actua! direct !a+orcost of 70'000 for the "ear e&ded ,ece.+er 31# ow.uch was *atso&5s o(erapp!ied factor" o(erhead

A# 12'700

)# 1;'000

C# 19'000

,# 34'000

[236] Source: u+!isher A&derso& Co.pa&" prepared the fo!!owi&g i&for.atio&usi&g a f!e%i+!e +udget s"ste.#

erce&tage of tota! capacit" ---------------------------- 478 908 -------- --------,irect !a+or hours 30'000 36'000Faria+!e factor" o(erhead 72'700 63'000Bi%ed factor" o(erhead 1'000 1'000Tota! factor" o(erhead rate per ,K 6#77 7#47

A&derso& operated at 478 of capacit" duri&g the "ear#owe(er' A&derso& app!ied factor" o(erhead +ased o&908 of capacit"# f actua! factor" o(erhead was eua! tothe factor" o(erhead +udgeted for 478 of capacit"' what



is the a.ou&t of o(erhead (aria&ce for the "ear

A# 2;'700 u&dera+sor+ed#

)# 2;'700 o(era+sor+ed#

C# 2'000 u&dera+sor+ed#

,# 2'000 o(era+sor+ed#

[234] Source: u+!isher*hee!er Co.pa&" uses a sta&dard-cost s"ste.# *hee!erprepared the fo!!owi&g +udget usi&g &or.a! capacit" for the.o&th of Ma":

,irect !a+or hours 36'000Faria+!e factor" o(erhead 42'000Bi%ed factor" o(erhead 162'000 Actua! resu!ts were as fo!!ows:,irect !a+or hours wored 33'000Tota! factor" o(erhead 220'700Sta&dard ,K a!!owed for capacit" attai&ed 31'700*hat is the +udget co&tro!!a+!e (aria&ce for Ma" usi&g

the two-wa" a&a!"sis of o(erhead (aria&ces

A# '700 fa(ora+!e#

)# 4'700 fa(ora+!e#

C# 4'700 u&fa(ora+!e#

,# 13'700 u&fa(ora+!e#

[23;] Source: u+!isherCo!e.a& Co.pa&" co.pi!ed the fo!!owi&g i&for.atio&:

Actua! factor" o(erhead 22'700Bi%ed o(erhead e%pe&ses' actua! 10';00

Bi%ed o(erhead e%pe&ses' +udgeted 10'700 Actua! hours 7'270Sta&dard hours 7'400Faria+!e o(erhead rate per ,K 3#;0*hat is the spe&di&g (aria&ce assu.i&g Co!e.a& uses athree-wa" a&a!"sis of o(erhead

A# 9'660 u&fa(ora+!e#

)# ;'270 fa(ora+!e#

C# 4'970 fa(ora+!e#

,# 4'970 u&fa(ora+!e#

[239] Source: u+!isherSa.ue! Co.pa&" pro(ided the fo!!owi&g data for Hu&eproductio& acti(it"# Sa.ue! uses a two-wa" a&a!"sis ofo(erhead (aria&ces#

Actua! (aria+!e factor" o(erhead i&curred 29'000Faria+!e factor" o(erhead rate per ,K 6#00Sta&dard ,K a!!owed 9'700 Actua! ,K ;'000The +udget co&tro!!a+!e (aria&ce for Hu&e' assu.i&g that+udgeted fi%ed o(erhead costs eua! actua! fi%ed costs' is

A# 3'000 fa(ora+!e#

)# 6'000 u&fa(ora+!e#

C# 9'000 fa(ora+!e#

,# 9'000 u&fa(ora+!e#

[20] Source: u+!isherBra&!i& Co.pa&"5s gross profit for "ear 2 a&d "ear 1 wasas fo!!ows:

ear 2 ear 1 -------- --------Sa!es 970'00 960'000Cost of goods so!d 776';00 746'000 -------- --------Gross profit 393'600 3;'000 OOOOOOOO OOOOOOOO Assu.i&g that "ear 2 se!!i&g prices were 178 !ower tha&"ear 1 se!!i&g prices' what was the decrease i& gross profitcaused +" the se!!i&g price cha&ge

A# 13'00

)# 12'760

C# 1'000

,# 164'41;

[21] Source: CMA 069 3-20@&der a sta&dard cost s"ste.' the .ateria!s price (aria&cesare usua!!" the respo&si+i!it" of the

A# roductio& .a&ager#

)# Cost accou&ti&g .a&ager#

C# Sa!es .a&ager#

,# urchasi&g .a&ager#

[23] Source: CMA 0697 3-24?efers to Bact atter& J21*hich o&e of the fo!!owi&g state.e&ts co&cer&i&g C!ear!us' &c#5s actua! resu!ts for Ma" is correct

A# The f!e%i+!e +udget (aria&ce is ;'000 fa(ora+!e#

)# The sa!es price (aria&ce is 32'000 fa(ora+!e#

C# The sa!es (o!u.e (aria&ce is ;'000 fa(ora+!e#

,# The f!e%i+!e +udget (aria+!e cost (aria&ce is10';00 u&fa(ora+!e#

[2] Source: u+!isherThe product cost which is esta+!ished +" a co&(e&tio&a!sta&dard cost accou&ti&g s"ste. is a&

A# Faria+!e cost#

)# Bi%ed cost#

C# $%pected cost#

,# Hoi&t cost#

[27] Source: u+!isher& a respo&si+i!it" accou&ti&g s"ste.' a feed+ac reportthat focuses o& the differe&ce +etwee& +udgeted a.ou&ts

a&d actua! a.ou&ts is a& e%a.p!e of

A# Ma&age.e&t +" e%ceptio&#



)# Assessi&g +!a.e#

C# Gra&ti&g rewards to successfu! .a&agers#

,# g&ori&g other (aria+!es for which the +udgetedgoa!s were .et#

[26] Source: CMA 1291 3-11 A differe&ce +etwee& sta&dard costs used for cost co&tro!a&d +udgeted costs

A# Ca& e%ist +ecause sta&dard costs .ust +edeter.i&ed after the +udget is co.p!eted#

)# Ca& e%ist +ecause sta&dard costs represe&t whatcosts shou!d +e' whereas +udgeted costs represe&te%pected actua! costs#

C# Ca& e%ist +ecause +udgeted costs are historica!costs' whereas sta&dard costs are +ased o&e&gi&eeri&g studies#

,# Ca&&ot e%ist +ecause the" shou!d +e the sa.ea.ou&ts#

[24] Source: CMA 0693 3-2*hich o&e of the fo!!owi&g state.e&ts pertai&i&g topractica! sta&dards is i&correct

A# ractica! sta&dards ca& +e used for productcosti&g a&d cash +udgeti&g#

)# The use of practica! sta&dards usua!!" e&couragesdesira+!e e.p!o"ee +eha(ior#

C# A fir. usi&g practica! sta&dards has &o reaso& to.ae a&" .id"ear ad>ust.e&ts to the productio&sta&dards if a& o!d .achi&e is rep!aced +" a &ewer'faster .achi&e#

,# @&der practica! sta&dards' e%ceptio&s fro.sta&dards are !ess !ie!"< co&seue&t!"' .a&agers wi!!+e +etter a+!e to practice .a&age.e&t +" e%ceptio&#

[2;] Source: CMA 129 3-23The +est +asis upo& which cost sta&dards shou!d +e set to.easure co&tro!!a+!e productio& i&efficie&cies is

A# $&gi&eeri&g sta&dards +ased o& idea!perfor.a&ce#

)# Dor.a! capacit"#

C# ?ece&t a(erage historica! perfor.a&ce#

,# $&gi&eeri&g sta&dards +ased o& attai&a+!eperfor.a&ce#

[29] Source: CA 0797 -2*hich of the fo!!owi&g .a&age.e&t practices i&(o!(esco&ce&trati&g o& areas that deser(e atte&tio& a&d p!aci&g!ess atte&tio& o& areas operati&g as e%pected


)# ?espo&si+i!it" accou&ti&g#

C# )e&ch.ari&g#

,# Ma&age.e&t +" e%ceptio&#

[270] Source: CMA 1297 3-6

The differe&ce +etwee& the actua! a.ou&ts a&d the f!e%i+!e+udget a.ou&ts for the actua! output achie(ed is the

A# roductio& (o!u.e (aria&ce#

)# B!e%i+!e +udget (aria&ce#

C# Sa!es (o!u.e (aria&ce#

,# Sta&dard cost (aria&ce#

[Bact atter& J22] Ard.ore $&terprises uses a sta&dard cost s"ste. i& itss.a!! app!ia&ce di(isio&# The sta&dard cost of.a&ufacturi&g o&e u&it of Pe+ is as fo!!ows:

Materia!s - 60 pou&ds at 1#70 per pou&d 90Ka+or - 3 hours at 12 per hour 36Bactor" o(erhead - 3 hours at ; per hour 2 ---- Tota! sta&dard cost per u&it 170 OOOOThe +udgeted (aria+!e factor" o(erhead rate is 3 per!a+or hour' a&d the +udgeted fi%ed factor" o(erhead is

24'000 per .o&th# ,uri&g Ma"' Ard.ore produced1'670 u&its of Pe+ co.pared with a &or.a! capacit" of1';00 u&its# The actua! cost per u&it was as fo!!ows:

Materia!s purchased a&d used - 7; pou&ds at 1#67 per pou&d 97#40Ka+or - 3#1 hours at 12 per hour 34#20Bactor" o(erhead - 39'930 per 1'670 u&its 2#20 -------Tota! actua! cost per u&it 174#10 OOOOOOO

[271] Source: CMA 0696 3-22?efers to Bact atter& J22The tota! .ateria!s ua&tit" (aria&ce for Ma" is

A# 1'377 fa(ora+!e#

)# 1'377 u&fa(ora+!e#

C# '970 fa(ora+!e#

,# '970 u&fa(ora+!e#

[272] Source: CMA 0696 3-23?efers to Bact atter& J22The .ateria!s price (aria&ce for Ma" is

A# 1'377 u&fa(ora+!e#

)# 1';70 u&fa(ora+!e#

C# 1'377 fa(ora+!e#

,# 1';70 fa(ora+!e#

[273] Source: CMA 0696 3-1?efers to Bact atter& J22The !a+or rate (aria&ce for Ma" is

A# 1'920 fa(ora+!e#

)# 0

C# '970 u&fa(ora+!e#

,# '970 fa(ora+!e#

[27] Source: CMA 0696 3-27



?efers to Bact atter& J22The f!e%i+!e +udget o(erhead (aria&ce for Ma" is

A# 3'240 u&fa(ora+!e#

)# 3'240 fa(ora+!e#

C# 1'920 u&fa(ora+!e#

,# 1'920 fa(ora+!e#

[277] Source: CMA 1296 3-21,a(id ?ogers' purchasi&g .a&ager at Bairwa"Ma&ufacturi&g Corporatio&' was a+!e to acuire a !argeua&tit" of raw .ateria! fro. a &ew supp!ier at adiscou&ted price# Mario& Co&&er' i&(e&tor" super(isor' isco&cer&ed +ecause the warehouse has +eco.e crowdeda&d so.e thi&gs had to +e rearra&ged# )ria& Ho&es' (icepreside&t of productio&' is co&cer&ed a+out the ua!it" ofthe discou&ted .ateria!# owe(er' the $&gi&eeri&g,epart.e&t tested the &ew raw .ateria! a&d i&dicated thatit is of accepta+!e ua!it"# At the e&d of the .o&th' Bairwa"e%perie&ced a fa(ora+!e .ateria!s usage (aria&ce' afa(ora+!e !a+or usage (aria&ce' a&d a fa(ora+!e .ateria!s

price (aria&ce# The usage (aria&ces were so!e!" the resu!tof a higher "ie!d fro. the &ew raw .ateria!# The fa(ora+!e.ateria!s price (aria&ce wou!d +e co&sidered therespo&si+i!it" of the

A# urchasi&g .a&ager#

)# &(e&tor" super(isor#

C# Fice preside&t of productio&#

,# $&gi&eeri&g .a&ager#

[276] Source: CMA 1296 3-23The purpose of ide&tif"i&g .a&ufacturi&g (aria&ces a&d

assig&i&g their respo&si+i!it" to a perso&Edepart.e&t shou!d+e to

A# @se the &ow!edge a+out the (aria&ces topro.ote !ear&i&g a&d co&ti&uous i.pro(e.e&t i& the.a&ufacturi&g operatio&s#

)# Trace the (aria&ces to fi&ished goods so that thei&(e&tor" ca& +e proper!" (a!ued at "ear-e&d#

C# ,eter.i&e the proper cost of the productsproduced so that se!!i&g prices ca& +e ad>ustedaccordi&g!"#

,# i&poi&t fau!t for operati&g pro+!e.s i& theorga&i/atio&#

[274] Source: CMA 1296 3-2The i&(e&tor" co&tro! super(isor at *i!so& Ma&ufacturi&gCorporatio& reported that a !arge ua&tit" of a partpurchased for a specia! order that was &e(er co.p!etedre.ai&s i& stoc# The order was &ot co.p!eted +ecausethe custo.er defau!ted o& the order# The part is &ot used i&a&" of *i!so&5s regu!ar products# After co&su!ti&g with*i!so&5s e&gi&eers' the (ice preside&t of productio&appro(ed the su+stitutio& of the purchased part for aregu!ar part i& a &ew product# *i!so&5s e&gi&eers i&dicatedthat the purchased part cou!d +e su+stituted pro(idi&g itwas .odified# The u&its .a&ufactured usi&g the su+stitutedpart reuired additio&a! direct !a+or hours resu!ti&g i& a&u&fa(ora+!e direct !a+or efficie&c" (aria&ce i& the

roductio& ,epart.e&t# The u&fa(ora+!e direct !a+orefficie&c" (aria&ce resu!ti&g fro. the su+stitutio& of thepurchased part i& i&(e&tor" wou!d +est +e assig&ed to the

A# Sa!es .a&ager#

)# &(e&tor" super(isor#

C# roductio& .a&ager#

,# Fice preside&t of productio&#

[Bact atter& J23]The co&tro!!er for ,urha. Sates is re(iewi&g theproductio& cost report for Hu!"# A& a&a!"sis of direct.ateria!s costs ref!ects a& u&fa(ora+!e f!e%i+!e +udget(aria&ce of 27# The p!a&t .a&ager +e!ie(es this ise%ce!!e&t perfor.a&ce o& a f!e%i+!e +udget for 7'000 u&itsof direct .ateria!s# owe(er' the productio& super(isor is&ot p!eased with this resu!t +ecause he c!ai.s to ha(esa(ed1'200 i& .ateria!s cost o& actua! productio& usi&g '900u&its of direct .ateria!s# The sta&dard .ateria!s cost is 12per u&it# Actua! .ateria!s used for the .o&th a.ou&ted to60'027#

[27;] Source: CMA 0694 3-22?efers to Bact atter& J23

The actua! a(erage cost per u&it for .ateria!s was

A# 12#00

)# 12#01

C# 12#2

,# 12#27

[279] Source: CMA 0694 3-23?efers to Bact atter& J23f the direct .ateria!s (aria&ce is i&(estigated further' it wi!!ref!ect a price (aria&ce of

A# Pero#

)# 1'200 fa(ora+!e#

C# 1'227 u&fa(ora+!e#

,# 2'700 fa(ora+!e#

[Bact atter& J2]Ba+ro &c# produced 1'700 u&its of roduct ?Q-6 !astwee# The i&puts to the productio& process for roduct?Q-6 were as fo!!ows:

70 pou&ds of Materia! A at a cost of 1#70 per pou&d300 pou&ds of Materia! P at a cost of 2#47 per pou&d

300 !a+or hours at a cost of 17#00 per hour

[260] Source: CMA 0694 3-27?efers to Bact atter& J2*hat is the tota! factor producti(it" for roduct ?Q-6

A# 2#00 u&its per pou&d#

)# 7#00 u&its per hour#

C# 0#27 u&its per do!!ar i&put#

,# 0#33 u&its per do!!ar i&put#

[261] Source: CMA 0694 3-26

?efers to Bact atter& J2*hat is the +est producti(it" .easure for the first-!i&esuper(isor i& Ba+ro &c#5s productio& p!a&t



A# 7#00 u&its per !a+or hour#

)# 2#00 per pou&d#

C# 0#33 u&its per do!!ar i&put#

,# 17#00 per !a+or hour#

[Bact atter& J27]Ko&do& $&terprises uses a sta&dard cost s"ste. i& itsapp!ia&ce di(isio&# The sta&dard cost of .a&ufacturi&g o&eu&it of Gi..ics is as fo!!ows:

Materia!s - 120 pou&ds at 1#70 per pou&d 1;0Ka+or - 3 hours at 17 per hour 7Bactor" o(erhead - 16 per !a+or hour ; ---- Tota! sta&dard cost per u&it 243 OOOOThe +udgeted (aria+!e factor" o(erhead rate is 6 per!a+or hour' a&d the +udgeted fi%ed factor" o(erhead is7'000 per .o&th# ,uri&g Hu&e' Ko&do& $&terprisesproduced 1'670 u&its of Gi..ics co.pared with a&or.a! capacit" of 1';00 u&its# The actua! cost per u&it was

Materia!s purchased a&d used - 116 pou&ds at 1#67 per pou&d 191#0Ka+or - 3#1 hours at 17 per hour 6#70Bactor" o(erhead 49';60 for 1'670 u&its ;#0 ------- Tota! actua! cost per u&it 2;6#30 OOOOOOO

[262] Source: u+!isher?efers to Bact atter& J27The tota! .ateria!s ua&tit" (aria&ce for Hu&e is

A# 9'900 Ba(ora+!e#

)# 9'900 @&fa(ora+!e#

C# 2;'410 Ba(ora+!e#

,# 2;'410 @&fa(ora+!e#

[263] Source: u+!isher?efers to Bact atter& J27The .ateria!s price (aria&ce for Hu&e is

A# 2;'410 @&fa(ora+!e#

)# 29'400 @&fa(ora+!e#

C# 2;'410 Ba(ora+!e#

,# 29'400 Ba(ora+!e#

[26] Source: u+!isher?efers to Bact atter& J27The !a+or rate (aria&ce for Hu&e is

A# 2'400 @&fa(ora+!e#

)# 2'400 Ba(ora+!e#

C# 2'47 @&fa(ora+!e#

,# 0

[267] Source: u+!isher?efers to Bact atter& J27The f!e%i+!e +udget o(erhead (aria&ce for Hu&e is

A# 0

)# 6'70 Ba(ora+!e#

C# 3';0 @&fa(ora+!e#

,# 3';0 Ba(ora+!e#

[Bact atter& J26] A .a&ufacturer of radios purchases co.po&e&ts fro.su+co&tractors for asse.+!" i&to co.p!ete radios# $achradio reuires three u&its each of art Q' which has asta&dard cost of 2#90 per u&it# ,uri&g Hu&e' the co.pa&"had the fo!!owi&g e%perie&ce with respect to art Q:

@&its ------ urchases 36'000 12'000 Co&su.ed i& .a&ufacturi&g 10'000 ?adios .a&ufactured 3'000

[266] Source: u+!isher?efers to Bact atter& J26,uri&g Hu&e' the co.pa&" i&curred a .ateria!s

purchase-price (aria&ce of

A# 900 u&fa(ora+!e#

)# 900 fa(ora+!e#

C# 1'200 u&fa(ora+!e#

,# 1'200 fa(ora+!e#

[264] Source: u+!isher?efers to Bact atter& J26,uri&g Hu&e' the co.pa&" i&curred a .ateria!s efficie&c"(aria&ce of

A# 2'900 u&fa(ora+!e#

)# 2'900 fa(ora+!e#

C# ;'400 u&fa(ora+!e#

,# ;'400 fa(ora+!e#

[26;] Source: u+!isher?efers to Bact atter& J26The a.ou&t that wi!! +e show& o& a f !e%i+!e +udget for artQ usage duri&g the .o&th of Hu&e is

A# 26'100

)# 24'000

C# 29'000

,# 36'000

[Bact atter& J24]The fo!!owi&g are the re!e(a&t data for ca!cu!ati&g sa!es(aria&ces for Bortu&a Co#' which se!!s its so!e product i&two cou&tries:

Ga!!ia e!(etica Tota! ------ --------- ----- )udgeted se!!i&g price per u&it 6#00 10#00DA

)udgeted (aria+!e cost per u&it 3#00 4#70DA ----- ------ ---



)udgeted co&tri+utio& .argi& per u&it 3#00 2#70DA OOOOO OOOOOO )udgeted u&it sa!es 300 200 700 )udgeted .i% perce&tage 608 081008 Actua! u&its so!d 260 260 720 Actua! se!!i&g price per u&it 6#00 9#70 DA[269] Source: u+!isher?efers to Bact atter& J24The sa!es (o!u.e (aria&ce for the two cou&tries is

A# 130 @#

)# 120 @#

C# 30 B#

,# 170 @#

[240] Source: u+!isher?efers to Bact atter& J24The sa!es ua&tit" (aria&ce for the two cou&tries is

A# 176 @#

)# 30 B#

C# 76 B#

,# 100 B#

[241] Source: u+!isher?efers to Bact atter& J24The sa!es .i% (aria&ce for the two cou&tries is

A# 176 @#

)# 26 @#

C# 76 B#

,# 170 B#

[242] Source: CMA 0693 3-23*hich o&e of the fo!!owi&g state.e&ts a+out idea!sta&dards is i&correct

A# dea! sta&dards are a!so ca!!ed theoretica! or.a%i.u.-efficie&c" sta&dards#

)# dea! sta&dards do &ot .ae pro(isio&s forworers with differe&t degrees of e%perie&ce a&d si!!

!e(e!s#

C# dea! sta&dards .ae &o a!!owa&ce for waste'spoi!age' a&d .achi&e +readow&s#

,# dea! sta&dards ca& +e used for cash +udgeti&g orproduct costi&g#

[Bact atter& J2;] A co.pa&"5s sta&dard direct !a+or rates i& effect for thefisca! "ear e&di&g Hu&e 30 a&d sta&dard hours a!!owed forthe output i& Apri! are

Sta&dard ,K Sta&dard ,K ?ate per our A!!owed for utput

------------- ------------------Ka+or c!ass ;#00 700Ka+or c!ass 4#00 700Ka+or c!ass 7#00 700

The wage rates for each !a+or c!ass i&creased o& Ha&uar" 1u&der the ter.s of a &ew u&io& co&tract# The sta&dardwage rates were &ot re(ised# The actua! direct !a+or hours,K a&d the actua! direct !a+or rates for Apri! were asfo!!ows:

Actua! ?ate Actua! ,K ----------- ----------Ka+or c!ass ;#70 770Ka+or c!ass 4#70 670Ka+or c!ass 7#0 347

[243] Source: u+!isher?efers to Bact atter& J2;*hat is the !a+or "ie!d (aria&ce rou&ded

A# 700

)# 320

C# ;20

,# 717

[24] Source: u+!isher?efers to Bact atter& J2;*hat is the !a+or .i% (aria&ce rou&ded

A# 70#00

)# 320#00

C# 66#64

,# 700#00

[247] Source: CMA Sa.p =3-11Gar!a&d Co.pa&" uses a sta&dard cost s"ste.# Thesta&dard for each fi&ished u&it of product a!!ows for 3

pou&ds of p!astic at 0#42 per pou&d# ,uri&g ,ece.+er'Gar!a&d +ought '700 pou&ds of p!astic at 0#47 perpou&d' a&d used '100 pou&ds i& the productio& of 1'300fi&ished u&its of product# *hat is the .ateria!s purchaseprice (aria&ce for the .o&th of ,ece.+er

A# 114 u&fa(ora+!e#

)# 123 u&fa(ora+!e#

C# 137 u&fa(ora+!e#

,# 170 u&fa(ora+!e#

[Bact atter& J29]

Bu&ti.e' &c# .a&ufactures (ideo ga.e .achi&es# Maretsaturatio& a&d tech&o!ogica! i&&o(atio&s ha(e causedprici&g pressures which ha(e resu!ted i& dec!i&i&g profits#To ste. the s!ide i& profits u&ti! &ew products ca& +ei&troduced' a& i&ce&ti(e progra. has +ee& de(e!oped toreward productio& .a&agers who co&tri+ute to a& i&creasei& the &u.+er of u&its produced a&d effect cost reductio&s#

The .a&agers ha(e respo&ded to the pressure of i.pro(i&g.a&ufacturi&g i& se(era! wa"s# The (ideo ga.e .achi&esare put together +" the Asse.+!" Group which reuiresparts fro. +oth the ri&ted Circuit )oards C) a&d the?eadi&g eads ? groups# To attai& i&creasedproductio& !e(e!s' the C) a&d ? groups co..e&cedre>ecti&g parts that pre(ious!" wou!d ha(e +ee& tested a&d.odified to .eet .a&ufacturi&g sta&dards# re(e&ti(e

.ai&te&a&ce o& .achi&es used i& the productio& of theseparts has +ee& postpo&ed with o&!" e.erge&c" repair wor+ei&g perfor.ed to eep productio& !i&es .o(i&g#



The .ore aggressi(e Asse.+!" Group productio&super(isors ha(e pressured .ai&te&a&ce perso&&e! toatte&d to their .achi&es at the e%pe&se of other groups#This has resu!ted i& .achi&e dow&ti.e i& the C) a&d ?groups which' whe& coup!ed with de.a&ds for acce!eratedparts de!i(er" +" the Asse.+!" Group' has !ed to .orefreue&t parts re>ectio&s a&d i&creased frictio& a.o&gdepart.e&ts#

Bu&ti.e operates u&der a sta&dard cost s"ste.# Thesta&dard costs for (ideo ga.e .achi&es are as fo!!ows#

Sta&dard Cost per @&it ------------------------- Cost te. =ua&tit" Cost Tota!------------------------- -------- ---- -----,irect Materia!s ousi&g u&it 1 20 20 ri&ted circuit +oards 2 17 30 ?eadi&g heads 10 0,irect !a+or Asse.+!" group 2 hours ; 16 C) group 1 hour 9 9 ? group 1#7 hours 10 17Faria+!e o(erhead #7 hours 2 9

---- Tota! sta&dard cost per u&it 139 OOOOBu&ti.e prepares .o&th!" perfor.a&ce reports +ased o&sta&dard costs# rese&ted +e!ow is the co&tri+utio& reportfor Ma"' whe& productio& a&d sa!es +oth reached 2'200u&its#

Bu&ti.e &c# Co&tri+utio& ?eport Bor the Mo&th of Ma" )udget Actua! Faria&ce -------- ------- --------@&its 2'000 2'200 200B?e(e&ue 00'000 0'000 0'000BFaria+!e costs

,irect .ateria! 1;0'000 220'00 0'00@ ,irect !a+or ;0'000 93'60 13'60@ Faria+!e o(erhead 1;'000 1;';00 ;00@ -------- ------- -------- Tota! (aria+!e costs 24;'000 332'660 7'660@ -------- ------- --------Co&tri+utio& .argi& 122'000 104'30 1'660@ OOOOOOOO OOOOOOOO OOOOOOOOBu&ti.e5s top .a&age.e&t was surprised +" theu&fa(ora+!e co&tri+utio& to o(era!! corporate profits i& spiteof the i&creased sa!es i& Ma"# Hac ?ath' cost accou&ta&t'was assig&ed to ide&tif" the reaso&s for the u&fa(ora+!eco&tri+utio& resu!ts as we!! as the i&di(idua!s or groupsrespo&si+!e# After re(iew' ?ath prepared the @sage ?eportprese&ted +e!ow#

Bu&ti.e &c# @sage ?eport Bor the Mo&th of Ma" Cost te. =ua&tit" Actua! Cost------------------------- ----------- -----------,irect .ateria! ousi&g u&its 2'200 u&its '000 ri&ted circuit +oards '400 u&its 47'200 ?eadi&g heads 9'200 u&its 101'200,irect !a+or Asse.+!" 3'900 hours 31'200 ri&ted circuit +oards 2'00 hours 23'460 ?eadi&g heads 3'700 hours 3;'700Faria+!e o(erhead 9'900 hours 1;';00 -------- Tota! (aria+!e cost 332'660

OOOOOOOO?ath reported that the C) a&d ? groups supported thei&creased productio& !e(e!s +ut e%perie&ced a+&or.a!.achi&e dow&ti.e' causi&g id!e .a&power which reuired

the use of o(erti.e to eep up with the acce!eratedde.a&d for parts# The id!e ti.e was charged to direct!a+or# ?ath a!so reported that the productio& .a&agers ofthese two groups resorted to parts re>ectio&s' as opposedto testi&g a&d .odificatio& procedures for.er!" app!ied#?ath deter.i&ed that the Asse.+!" Group .et.a&age.e&t5s o+>ecti(es +" i&creasi&g productio& whi!eusi&g !ower tha& sta&dard hours#

[246] Source: u+!isher?efers to Bact atter& J29*hat is the tota! .ateria!s price (aria&ce

A# 36'700 fa(ora+!e#

)# 36'700 u&fa(ora+!e#

C# 13'900 fa(ora+!e#

,# 13'900 u&fa(ora+!e#

[244] Source: u+!isher?efers to Bact atter& J29*hat is the tota! .ateria!s ua&tit" (aria&ce

A# ;'700 u&fa(ora+!e#

)# ;'700 fa(ora+!e#

C# 9'200 u&fa(ora+!e#

,# 9'200 fa(ora+!e#

[24;] Source: u+!isher?efers to Bact atter& J29*hat is the (aria+!e o(erhead efficie&c" (aria&ce

A# 0

)# 900 u&fa(ora+!e#

C# 9'900 u&fa(ora+!e#

,# 9'900 fa(ora+!e#

[249] Source: u+!isher*hat is the (aria+!e o(erhead spe&di&g (aria&ce

A# 1'000 u&fa(ora+!e#

)# 1'000 fa(ora+!e#

C# 1';00 u&fa(ora+!e#

,# 1';00 fa(ora+!e#

[2;0] Source: u+!isher*hat is the co&tri+utio& .argi& (o!u.e (aria&ce

A# 9';00 u&fa(ora+!e#

)# 9';00 fa(ora+!e#

C# 12'200 fa(ora+!e#

,# 1'660 u&fa(ora+!e#

[2;1] Source: CMA Sa.p =3-1

Coach Corporatio& is co&sideri&g which capacit" .easureis appropriate to use as the de&o.i&ator !e(e! of acti(it"whe& app!"i&g fi%ed factor" o(erhead to u&its produced# Assu.e that Coach se!ects direct !a+or hours as the cost



dri(er a&d the fo!!owi&g additio&a! data are a(ai!a+!e fro.the prior "ear:

ours -------Sta&dard direct !a+or hours for &or.a! capacit" 200'000Sta&dard direct !a+or hours a!!owed for u&its produced i& the prior "ear 210'000Sta&dard direct !a+or hours for the .aster +udget capacit" 220'000*hich of the fo!!owi&g capacit" .easures for thede&o.i&ator-!e(e! of acti(it" wou!d ha(e resu!ted i& a&u&fa(ora+!e (o!u.e (aria&ce

A# )oth &or.a! capacit" a&d .aster +udget capacit"#

)# Deither &or.a! capacit" &or .aster +udgetcapacit"#

C# Dor.a! capacit" o&!"#

,# Master +udget capacit" o&!"#

[Bact atter& J30]ortCo roducts is a di(isio&a!i/ed fur&iture .a&ufacturer#The di(isio&s are auto&o.ous seg.e&ts' with each di(isio&+ei&g respo&si+!e for its ow& sa!es' costs of operatio&s'wori&g capita! .a&age.e&t' a&d euip.e&t acuisitio&#$ach di(isio& ser(es a differe&t .aret i& the fur&iturei&dustr"# )ecause the .arets a&d products of the di(isio&sare so differe&t' there ha(e &e(er +ee& a&" tra&sfers+etwee& di(isio&s#

The Co..ercia! ,i(isio& .a&ufactures euip.e&t a&dfur&iture that is purchased +" the restaura&t i&dustr"# Thedi(isio& p!a&s to i&troduce a &ew !i&e of cou&ter a&d chairu&its that feature a cushio&ed seat for the cou&ter chairs#Hoh& I!i&e' the di(isio& .a&ager' has discussed the.a&ufacturi&g of the cushio&ed seat with ?uss Biege! of the

ffice ,i(isio&# The" +oth +e!ie(e a cushio&ed seatcurre&t!" .ade +" the ffice ,i(isio& for use o& its de!u%eoffice stoo! cou!d +e .odified for use o& the &ew cou&terchair# Co&seue&t!"' I!i&e has ased ?uss Biege! for aprice for 100-u&it !ots of the cushio&ed seat# The fo!!owi&gco&(ersatio& too p!ace a+out the price to +e charged forthe cushio&ed seats:

Biege!: LHoh&' we ca& .ae the &ecessar" .odificatio&s tothe cushio&ed seat easi!"# The raw .ateria!s used i& "ourseat are s!ight!" differe&t a&d shou!d cost a+out 108 .oretha& those used i& our de!u%e office stoo!# owe(er' the!a+or ti.e shou!d +e the sa.e +ecause the seat fa+ricatio&operatio& +asica!!" is the sa.e# wou!d price the seat atour regu!ar rate--fu!! cost p!us 308 .arup#L

I!i&e: LThat5s higher tha& e%pected' ?uss# was thi&i&gthat a good price wou!d +e "our (aria+!e .a&ufacturi&gcosts# After a!!' "our capacit" costs wi!! +e i&curredregard!ess of this >o+#L

Biege!: LHoh&' 5. at capacit"# )" .ai&g the cushio& seatsfor "ou' 5!! ha(e to cut ." productio& of de!u%e officestoo!s# f course' ca& i&crease ." productio& of

eco&o." office stoo!s# The !a+or ti.e freed +" &ot ha(i&gto fa+ricate the fra.e or asse.+!e the de!u%e stoo! ca& +eshifted to the fra.e fa+ricatio& a&d asse.+!" of theeco&o." office stoo!# Bortu&ate!"' ca& switch ." !a+orforce +etwee& these two .ode!s of stoo!s without a&" !ossof efficie&c"# As "ou &ow' o(erti.e is &ot a feasi+!ea!ter&ati(e i& our co..u&it"# 5d !ie to se!! it to "ou at

(aria+!e cost' +ut ha(e e%cess de.a&d for +oth products# do&5t .i&d cha&gi&g ." product .i% to the eco&o.".ode! if get a good retur& o& the seats .ae for "ou#ere are ." sta&dard costs for the two stoo!s a&d a

schedu!e of ." .a&ufacturi&g o(erhead#L

I!i&e: L guess see "our poi&t' ?uss' +ut do&5t wa&t toprice ."se!f out of the .aret# Ma"+e we shou!d ta! toCorporate to see if the" ca& gi(e us a&" guida&ce#L

ffice ,i(isio& Sta&dard Costs a&d rices ,e!u%e $co&o." ffice ffice Stoo! Stoo! ------ --------?aw .ateria!s Bra.i&g ;#17 9#46 Cushio&ed seat addi&g 2#0 -- Fi&"! #00 -- Mo!ded seat purchased -- 6#00,irect !a+or Bra.e fa+ricatio& #7 % 4#70E,K 3#47 #7 % 4#70E,K 3#47 Cushio& fa+ricatio& #7 % 4#70E,K 3#47 -- Asse.+!"R #7 % 4#70E,K 3#47 #3 % 4#70E,K

2#27Ma&ufacturi&g (erhead 1#7,K % 12#;0E,K 19#20 #;,K %12#;0E,K 10#2 ------ ------ Tota! sta&dard cost 7#00 32#00 OOOOOO OOOOOO Se!!i&g price 308 .arup 7;#70 1#60 OOOOOO OOOOOORAttachi&g seats to fra.es a&d attachi&g ru++er feet# ffice ,i(isio& Ma&ufacturi&g (erhead )udget (erhead te. Dature A.ou&t----------------- ------------------------ ----------Supp!ies Faria+!e--at curre&t

.aret prices 20'000&direct !a+or Faria+!e 347'000Super(isio& Do&(aria+!e 270'000ower @se (aries with acti(it"< rates are fi%ed 1;0'000eat a&d !ight Do&(aria+!e--!ight is fi%ed regard!ess of productio& whi!e heatE air co&ditio&i&g (aries with fue! charges 10'000ropert" ta%es a&d Do&(aria+!e--a&" i&sura&ce ta%es cha&ge i& a.ou&tsE rates is i&depe&de&t of productio& 200'000,epreciatio& Bi%ed do!!ar tota! 1'400'000$.p!o"ee +e&efits 208 of super(isio&'

direct a&d i&direct !a+or 747'000 ---------- Tota! o(erhead 3';0'000 OOOOOOOOOO Capacit" i& ,K 300'000 OOOOOOOOOO (erhead rateE,K 12#;0 OOOOOOOOOO

[2;2] Source: u+!isher?efers to Bact atter& J30*hat a.ou&t of e.p!o"ee +e&efits is associated with direct!a+or costs

A# 647'000

)# 47'000

C# 70'000



,# 700'000

[2;3] Source: u+!isher?efers to Bact atter& J30*hat is the (aria+!e .a&ufacturi&g o(erhead rate

A# 4#;0Ehr#

)# 11#27Ehr#

C# 7#14Ehr#

,# 7#00Ehr#

[2;] Source: u+!isher?efers to Bact atter& J30*hat is the tra&sfer price per 100-u&it !ot +ased o&(aria+!e .a&ufacturi&g costs to produce the .odifiedcushio&ed seat

A# 1'329

)# 1';69

C# 4;9

,# 1'9;6

[2;7] Source: u+!isher?efers to Bact atter& J30*hat is the fi%ed .a&ufacturi&g o(erhead rate

A# 4#;0Ehr#

)# 11#27Ehr#

C# 7#14Ehr#

,# 7#00Ehr#

[2;6] Source: u+!isher?efers to Bact atter& J30ow .a&" eco&o." office stoo!s ca& +e produced withthe !a+or hours curre&t!" used to .ae 100 de!u%e stoo!s

A# ;0#

)# 127#

C# 100#

,# 170#

[2;4] Source: u+!isher?efers to Bact atter& J30*he& co.puti&g the opportu&it" cost for the de!u%e officestoo!' what is the co&tri+utio& .argi& per u&it produced

A# 27#20

)# 17#;

C# 13#76

,# 33#30

[2;;] Source: u+!isher?efers to Bact atter& J30*hat is the opportu&it" cost of the ffice ,i(isio& if 127eco&o." stoo!s ca& +e .ade i& the ti.e reuired for 100

de!u%e stoo!s

A# 4;9

)# 1';69

C# 1'329

,# 70

[Bact atter& J31]Mou&tai& Fiew ospita! MF has adopted a sta&dardcost accou&ti&g s"ste. for e(a!uatio& a&d co&tro! of &ursi&g!a+or# ,iag&osis ?e!ated Groups ,?Gs' i&stituted +" the@#S# go(er&.e&t for hea!th i&sura&ce rei.+urse.e&t' areused as the output .easure i& the sta&dard cost s"ste.# A,?G is a patie&t c!assificatio& sche.e i& which hospita!sare regarded as .u!tiproduct fir.s with i&patie&t treat.e&tprocedures re!ated to the &u.+ers a&d t"pes of patie&tai!.e&ts treated# MF has de(e!oped sta&dard &ursi&gti.es for the treat.e&t of each ,?G c!assificatio&' a&d&ursi&g !a+or hours are assu.ed to (ar" with the &u.+er of,?Gs treated withi& a ti.e period#

The &ursi&g u&it o& the fourth f!oor treats patie&ts with four,?G c!assificatio&s# The u&it is staffed with registered&urses ?Ds' !ice&sed practica! &urses KDs' a&d aides#The sta&dard &ursi&g hours a&d sa!ar" rates a&d actua!&u.+ers of patie&ts for the .o&th of Ma" were as fo!!ows#

Sta&dard Actua! ours per ,?G Tota! Sta&dard ours ,?G Do# of ------------- --------------------C!assificatio& atie&ts ?D KD Aide ?D KD Aide-------------- -------- -- --- ---- ----- ----- ----- 1 270 6 7 1'700 1'000 1'270 2 90 26 16 10 2'30 1'0 900 3 20 10 7 2'00 1'200 960 10 12 4 10 1'6;0 9;0 1'00 ----- ----- -----

4'920 '620 '710 OOOOO OOOOO OOOOO Sta&dard our!" ?ates --------------------- ?D 12#00 KD ;#00 Aide 6#00The resu!ts of operatio&s duri&g Ma" for the fourth f!oor&ursi&g u&it are prese&ted +e!ow:

?D KD Aide -------- ------- ------- Actua! hours ;'170 '300 '00 Actua! sa!ar" 100'27 37'260 27'300 Actua! hour!" rate 12#30 ;#20 7#47)ecause MF does &ot ha(e data to ca!cu!ate (aria&ces

+" ,?G' it uses a f!e%i+!e +udgeti&g approach to ca!cu!ate!a+or (aria&ces for each reporti&g period +" !a+orc!assificatio& ?D' KD' Aide# Ka+or .i% a&d !a+or "ie!d(aria&ces are a!so ca!cu!ated +ecause o&e !a+or i&put ca&+e su+stituted for a&other# The (aria&ces are used +"&ursi&g super(isors a&d hospita! ad.i&istratio& to e(a!uatethe perfor.a&ce of &urses#

[2;9] Source: u+!isher?efers to Bact atter& J31*hat is the tota! f!e%i+!e +udget (aria&ce

A# 2'207 fa(ora+!e#)# 2'207 u&fa(ora+!e#C# 1'47 fa(ora+!e#,# 1'47 u&fa(ora+!e#

[290] Source: u+!isher?efers to Bact atter& J31



*hat is the !a+or .i% (aria&ce

A# 3'739 u&fa(ora+!e#)# 3'739 fa(ora+!e#C# 1'3; u&fa(ora+!e#,# 1'3; fa(ora+!e#

[291] Source: u+!isher?efers to Bact atter& J31*hat is the !a+or "ie!d (aria&ce

A# 1'90; fa(ora+!e#

)# 1';66 fa(ora+!e#

C# 1'433 fa(ora+!e#

,# 60 fa(ora+!e#

PART 3C

CONTROL AND PERFORMANCE

EVALUATION

ANSWERS

[1] Source: CMA 0691 3-21

A&swer A is i&correct +ecause carr"i&g cost is a&i&(e&tor" cost#

A&swer ) is correct# Costs of e%ter&a! fai!ure' suchas warra&t"' product !ia+i!it"' a&d custo.er i!! wi!!costs' arise whe& pro+!e.s occur after ship.e&t#&ter&a! fai!ure costs are i&curred whe& detectio& ofdefecti(e products occurs +efore ship.e&t# $%a.p!esi&c!ude scrap' rewor' too!i&g cha&ges' a&ddow&ti.e# re(e&tio& atte.pts to a(oid defecti(eoutput# These costs i&c!ude pre(e&ti(e .ai&te&a&ce'

e.p!o"ee trai&i&g' re(iew of euip.e&t desig&' a&de(a!uatio& of supp!iers# Appraisa! e.+races suchacti(ities as statistica! ua!it" co&tro! progra.s'i&spectio&' a&d testi&g#

A&swer C is i&correct +ecause a!! trai&i&g costs are&ot ua!it" co&tro! re!ated# A!so' i&ter&a! fai!ure costsshou!d +e i&c!uded#

A&swer , is i&correct +ecause i&ter&a! fai!ure costsshou!d +e i&c!uded#

[2] Source: CMA 0691 3-23

A&swer A is i&correct +ecause e%ter&a! fai!ure costs

arise whe& pro+!e.s occur after ship.e&t# The costof scrap' rewor' a&d too!i&g cha&ges occurs +eforeship.e&t#

A&swer ) is correct# &ter&a! fai!ure costs arei&curred whe& detectio& of defecti(e products occurs+efore ship.e&t# $%a.p!es i&c!ude scrap' rewor'too!i&g cha&ges' a&d dow&ti.e#

A&swer C is i&correct +ecause trai&i&g costs arec!assified as pre(e&ti(e costs#

A&swer , is i&correct +ecause pre(e&tio& costsatte.pt to a(oid defecti(e output#

[3] Source: CMA 1292 3-24

A&swer A is i&correct +ecause e.p!o"ees wou!di&itia!!" ear& o&!" 1'700 per .o&th' a&d !ater

1'427#

A&swer ) is correct# Assu.i&g that e.p!o"eesprefer .ore .o&e" to !ess' a 6#78 co..issio& o& a!!sa!es with &o +ase sa!ar" is .ost !ie!" to ha(e thedesired .oti(atio&a! effect# This p!a& wi!! resu!t i&co.pe&satio& of 2'247 per .o&th +ased o& sa!es of37'000# This a.ou&t is greater tha& that for a&" ofthe other choices#

A&swer C is i&correct +ecause a 1'200 +asesa!ar" p!us 38 of sa!es resu!t i& co.pe&satio& of o&!"2'270 o& sa!es of 37'000#

A&swer , is i&correct +ecause a& i&itia! 1'470 per.o&th with a possi+!e !ater i&crease to 1'927 is &otas desira+!e as 2'247 per .o&th#

[] Source: CA 11; -11

A&swer A is i&correct +ecause a co&tro! s"ste.!oos to the future whe& it pro(ides for correcti(eactio& a&d re(iew a&d re(isio& of sta&dards#

A&swer ) is i&correct +ecause p!a&&i&g a&dco&tro!!i&g o(er!ap#

A&swer C is i&correct +ecause co.prehe&si(ep!a&&i&g i&c!udes creatio& of co&tro!s#

A&swer , is correct# Co&tro! is the process of.ai&g certai& that p!a&s are achie(i&g the desiredo+>ecti(es# A co&tro! s"ste. operates throughesta+!ishi&g sta&dards of perfor.a&ce' .easuri&gactua! perfor.a&ce' a&a!"/i&g a&d co.pari&g ofperfor.a&ce with sta&dards' tai&g correcti(e actio&'a&d re(iewi&g a&d re(isi&g sta&dards# !a&&i&gpro(ides &eeded too!s for the co&tro! process +"esta+!ishi&g sta&dards' e#g#' +udgets#

[7] Source: CA 11; -12

A&swer A is i&correct +ecause it descri+es product&ot process ua!it" co&tro!#

A&swer ) is correct# rocess a&a!"sis studies the.ea&s of produci&g a product with a (iew to!oweri&g costs a&d i&creasi&g efficie&c" whi!eproduci&g ite.s of appropriate ua!it"# The effect ofprocess a&a!"sis is to act as a pre-co&tro! to pre(e&tdefects# roduct ua!it" co&tro! i&(o!(es i&spectio&duri&g productio& to e!i.i&ate defecti(e ite.s#

A&swer C is i&correct +ecause it is app!ica+!e toprocess &ot product ua!it" co&tro!#

A&swer , is i&correct +ecause process ua!it"co&tro! a&d product ua!it" co&tro! are +othi.porta&t e!e.e&ts i& a ua!it" co&tro! progra.#

[6] Source: CA 079 -73

A&swer A is i&correct +ecause T=M has a +roadere.phasis# t focuses o& i.pro(i&g ua!it"' reduci&gc"c!e ti.e' pro(idi&g i&creased custo.er satisfactio&'a&d achie(i&g the !owest o(era!! +usi&ess cost#?educi&g the cost of i&spectio& a&d e&couragi&gcross-fu&ctio&a! tea.wor he!p achie(e the !owesto(era!! +usi&ess cost#

A&swer ) is i&correct +ecause this state.e&tdescri+es participati(e .a&age.e&t#

A&swer C is i&correct +ecause T=M has a +roader



e.phasis# t focuses o& i.pro(i&g ua!it"' reduci&gc"c!e ti.e' pro(idi&g i&creased custo.er satisfactio&'a&d achie(i&g the !owest o(era!! +usi&ess cost#?educi&g the cost of i&spectio& a&d e&couragi&gcross-fu&ctio&a! tea.wor he!p achie(e the !owesto(era!! +usi&ess cost#

A&swer , is correct# T=M esta+!ishes ua!it" as a&orga&i/atio&a! o+>ecti(e a&d (iews it as a .a>orco.po&e&t of the orga&i/atio&5s ser(ice to itscusto.ers# t e.phasi/es e.p!o"ee trai&i&g a&dco..it.e&t' productEser(ice desig& a&d productio&'a&d custo.er ser(ice# rdi&ari!"' the ua!it" of a

product or ser(ice is as i.porta&t to custo.ers ascost a&d ti.e!i&ess# Superior product ua!it" is &otattai&ed .ere!" through .ore i&spectio&' +etterstatistica! ua!it" co&tro!' a&d cross-fu&ctio&a!tea.wor# Ma&ufacturers .ust .ae fu&da.e&ta!cha&ges i& the wa" the" produce products a&d doeach >o+ right the first ti.e#

[4] Source: CA 07;7 -16

A&swer A is correct# Co&tro!s ca& +e preco&tro!pre(e&ti(e' co&curre&t app!ied i& .idstrea.' orpostco&tro! after the fact# re(e&ti(e co&tro!s aredesig&ed to foresee a&d a(ert pro+!e.s# Securi&gs.a!! too!s a&d euip.e&t i& a cri+ area with !i.itedaccess a&d specific accou&ta+i!it" separates custod"of these assets fro. other fu&ctio&s a&d ser(es as apre(e&ti(e co&tro! to a(oid waste a&d theft#

A&swer ) is i&correct +ecause reuisitio&i&g is aco&curre&t co&tro! o(er usage#

A&swer C is i&correct +ecause recei(i&g reports area co&curre&t co&tro! o(er the purchasi&g process#

A&swer , is i&correct +ecause restricted use is a

co&curre&t co&tro! o(er usage#

[;] Source: CA 07;7 -2;

A&swer A is i&correct +ecause it is i.p!ied +" thedefi&itio& of co&tro!#

A&swer ) is correct# The +asic process of co&tro!for .a&agers co&sists of esta+!ishi&g sta&dards'.easuri&g perfor.a&ce agai&st sta&dards' a&dcorrecti&g for de(iatio&s to e&sure acco.p!ish.e&t ofe&terprise goa!s# Thus' assig&i&g respo&si+i!it" forde(iatio&s fou&d is &ot a part of the co&tro!!i&gfu&ctio&#

A&swer C is i&correct +ecause it is i.p!ied +" thedefi&itio& of co&tro!#

A&swer , is i&correct +ecause it is i.p!ied +" thedefi&itio& of co&tro!#

[9] Source: CA 11;7 -10

A&swer A is i&correct +ecause co&curre&t co&tro!sare app!ied .idstrea.' e#g#' i&spectio& o& a&asse.+!" !i&e#

A&swer ) is correct# A feed+ac co&tro! operatesto pro(ide i&for.atio& a+out processes that ha(ea!read" occurred# The !isted co&tro!s are post-actio&

or feed+ac co&tro!s#

A&swer C is i&correct +ecause feedforward a&dpre(e&ti(e co&tro!s a&ticipate a&d a(oid future

perfor.a&ce pro+!e.s' e#g#' +udgeti&g#

A&swer , is i&correct +ecause feedforward a&dpre(e&ti(e co&tro!s a&ticipate a&d a(oid futureperfor.a&ce pro+!e.s' e#g#' +udgeti&g#

[10] Source: CA 11;6 -13

A&swer A is i&correct +ecause pre(e&ti(e co&tro!seep !oss e%posures fro. occurri&g# The" i&c!ude &oto&!" operati&g co&tro!s +ut a!so those for whichua&tifia+!e sta&dards are readi!" deter.i&ed#

A&swer ) is i&correct +ecause fi&a&cia! co&tro!s'e#g#' a +udget' are su+>ect to sta&dards that arere!ati(e!" eas" to .easure si&ce the" are ua&tifia+!e#

A&swer C is i&correct +ecause correcti(e co&tro!sare post-detectio& or re.edia! co&tro!s# The" .a"i&c!ude co&tro!s for which sta&dards are easi!"defi&ed' such as fi&a&cia! co&tro!s#

A&swer , is correct# perati&g co&tro!s are thoseused i& the .a&age.e&t processes of directi&g a&d

co&tro!!i&g a&d are +ased o& co.pariso& of resu!tswith sta&dards# As a& acti(it" +eco.es !ess.echa&ica!' howe(er' sta&dards +eco.e .oredifficu!t to deter.i&e# Co&tro! sta&dards for securit"'for e%a.p!e' are !ess easi!" de(e!oped tha& for theoutput per hour of a .achi&e si&ce the degree ofsecurit" achie(ed is &ot readi!" .easura+!e#

[11] Source: CA 11;6 -1

A&swer A is correct# re(e&ti(e co&tro!s eep !osse%posures fro. occurri&g# *he& the .ateria! +ei&gused is as scarce a&d (a!ua+!e as a dia.o&d'processi&g is cost!" a&d ti.e-co&su.i&g' a&d the costof a de(iatio& fro. sta&dards is high re!ati(e to the

cost of co&tro!' pre(e&ti(e co&tro!s are &eeded#

A&swer ) is i&correct +ecause the raw .ateria!i&(o!(ed is e%pe&si(e' so rep!ace.e&t .a" &ot +ecost effecti(e# Moreo(er' defects i& dia.o&ds .a"&ot +e repaira+!e#

A&swer C is i&correct +ecause detectio& is !ess costeffecti(e gi(e& the &ature of the raw .ateria! a&dprocessi&g reuired#

A&swer , is i&correct +ecause feed+ac is !esscost effecti(e gi(e& the &ature of the raw .ateria! a&dprocessi&g reuired#

[12] Source: CA 11;4 -9

A&swer A is i&correct +ecause top .a&agersesse&tia!!" direct other .a&agers a&d are &oti..ediate!" co&cer&ed with operati&g detai!s#

A&swer ) is i&correct +ecause .idd!e .a&agersesse&tia!!" direct other .a&agers a&d are &oti..ediate!" co&cer&ed with operati&g detai!s#

A&swer C is correct# A first-!i&e .a&ager' such as aproductio& super(isor' is co&cer&ed with da"-to-da"operati&g detai!s# She is the .a&ager who is c!osestto the poi&t at which i&puts are co&(erted i&to thegoods or ser(ices produced +" the orga&i/atio&#Thus' the first-!i&e .a&ager shou!d recei(e the report

+ecause she is .ost direct!" respo&si+!e for .ateria!usage#

A&swer , is i&correct +ecause &o&.a&agers ha(e



&o u!ti.ate respo&si+i!it" for co&tro!!i&g operatio&s#Co&tro!!i&g is a +asic .a&age.e&t fu&ctio&#

[13] Source: CA 11;4 -10

A&swer A is correct# A +udget is a for.a!state.e&t i& ua&titati(e ter.s of a& orga&i/atio&5sgoa!s a&d p!a&s for a specified period# *he& the+udget is used to .easure the de(iatio& of actua!

operati&g perfor.a&ce fro. the esta+!ished sta&dard'it is a!so e.p!o"ed as a& operati&g co&tro!#

A&swer ) is i&correct +ecause a process co&tro! isco&cer&ed with the ph"sica! co&tro! of a.a&ufacturi&g fu&ctio&#

A&swer C is i&correct +ecause a& adapti(e co&tro!per.its adaptatio& of p!a&s to cha&gi&g co&ditio&s#

A&swer , is i&correct +ecause +udgetar" co&tro! is.ore of a feed+ac co&tro! +ecause actua! resu!ts areco.pared with the p!a&s for the period# A&"de(iatio& pro(ides feed+ac#

[1] Source: CA 11;9 -1

A&swer A is correct# Co&tro! is the process of.ai&g certai& that p!a&s achie(e the desiredo+>ecti(es# A co&tro! s"ste. operates throughesta+!ishi&g sta&dards of perfor.a&ce' .easuri&gactua! perfor.a&ce' a&a!"sis a&d co.pariso& ofperfor.a&ce with sta&dards' tai&g correcti(e actio&'a&d re(iewi&g a&d re(isi&g sta&dards# The three +asice!e.e&ts are thus o+>ecti(es' sta&dards' a&de(a!uatio&# The !ast e!e.e&t e&co.passes a rewards"ste. +ased o& euita+!e e(a!uatio& of perfor.a&ce#

A&swer ) is i&correct +ecause &o reward structure

has +ee& esta+!ished#

A&swer C is i&correct +ecause &o e(a!uatio&

s"ste. e%ists#

A&swer , is i&correct +ecause &o&e of the e!e.e&tsare prese&t#

[17] Source: CA 1190 -

A&swer A is i&correct +ecause i&put co&tro!s arei&te&ded to pre(e&t e&tr" of i&accurate or i&co.p!etedata i&to the i&for.atio& s"ste.#

A&swer ) is i&correct +ecause auditi&g co&tro!s arethe s"ste. of checs a&d +a!a&ces i& effectthroughout the +a&#

A&swer C is correct# perati&g co&tro!s i&c!ude a!!those that pro.ote safe' accurate a&d ti.e!"processi&g of the +a&5s tra&sactio&s' e#g#' dua!co&tro!' >oi&t custod"' rotatio& of e.p!o"ees' a&dsegregatio& of duties#

A&swer , is i&correct +ecause output co&tro!s arei&te&ded to e&sure the accurac" a&d properdistri+utio& of output fro. the i&for.atio& s"ste.#

[16] Source: CA 1190 -13

A&swer A is correct# peratio&a! co&tro!s o(er&o&fi&a&cia! acti(ities freue&t!" are &ot supported +"c!ear criteria or sta&dards# There is &o fir. e%ter&a!

procedura! fra.ewor for operatio&a! co&tro!s suchas ge&era!!" accepted accou&ti&g pri&cip!es pro(idefor accou&ti&g co&tro!s#

A&swer ) is i&correct +ecause these co&tro!s arewe!! defi&ed +" the fra.ewor of GAA#

A&swer C is i&correct +ecause ph"sica! co&tro!sa&d their o+>ecti(es are appare&t# The" are &otsu+>ect to a&" sig&ifica&t degree of .isi&terpretatio&#

A&swer , is i&correct +ecause i&put co&tro!s areeasi!" assessed +" stud"i&g co.puter progra. codea&d e&teri&g test data i&to the s"ste.#

[14] Source: CA 1190 -1

A&swer A is i&correct +ecause a custo.er sur(e" isa feed+ac correcti(e co&tro!# t is &ot as effecti(eas a feedforward pre(e&ti(e co&tro!#

A&swer ) is i&correct +ecause i&creasi&g fi&ishedgoods i&spectio&s is a feed+ac correcti(e co&tro!#t is &ot as effecti(e as a feedforward pre(e&ti(e

co&tro!#

A&swer C is correct# Beedforward co&tro!a&ticipates a&d pre(e&ts pro+!e.s +efore the" occur#& a ua!it" co&tro! progra.' it .a" e&tai! i.pro(edpurchasi&g procedures' a&d appropriate i&spectio& ofraw .ateria!s a&d wor-i&-process# re(e&tio& of adefect through feedforward co&tro! resu!ts i& reducedcosts throughout the e&tire .a&ufacturi&g a&d ua!it"i&spectio& c"c!e#

A&swer , is i&correct +ecause' a!though i&spectio&of wor-i&-process ser(es a feedforward purpose'pre(e&tio& rather tha& detectio& of defects i&wor-i&-process is prefera+!e#

[1;] Source: CA 0791 -17

A&swer A is i&correct +ecause foresta!!i&g.a&age.e&t fraud is o&!" o&e aspect of co&tro!#

A&swer ) is i&correct +ecause the protectio& ofassets is o&!" o&e aspect of co&tro!#

A&swer C is correct# rga&i/atio&a! effecti(e&ess isthe degree to which the orga&i/atio& achie(es itso+>ecti(es a&d goa!s# Accordi&g to SAS 2' LAco&tro! is a&" actio& tae& +" .a&age.e&t toe&ha&ce the !ie!ihood that esta+!ished o+>ecti(es a&dgoa!s wi!! +e achie(ed# Ma&age.e&t p!a&s' orga&i/es'a&d directs the perfor.a&ce of sufficie&t actio&s to

pro(ide reaso&a+!e assura&ce that o+>ecti(es a&dgoa!s wi!! +e achie(ed#L

A&swer , is i&correct +ecause co&tro!!i&g a&dp!a&&i&g are !i&ed' +ut i.p!e.e&tatio& is &ot a&aspect of co&tro!#

[19] Source: CA 0791 -16

A&swer A is i&correct +ecause ua!it" co&tro!trai&i&g is a feedforward or future-directed co&tro!#

A&swer ) is i&correct +ecause forecasti&g i&(e&tor"&eeds is a feedforward or future-directed co&tro!#

A&swer C is correct# A feed+ac co&tro! .easuresactua! perfor.a&ce' so.ethi&g that has a!read"occurred' to e&sure that a desired future state isattai&ed# t is used to e(a!uate past acti(it" to i.pro(e



future perfor.a&ce# A (aria&ce is a de(iatio& fro. asta&dard# e&ce' (aria&ce a&a!"sis is a feed+ac

co&tro!#

A&swer , is i&correct +ecause co.puterpasswords are a pre(e&ti(e co&tro!#

[20] Source: CA 0791 -3

A&swer A is i&correct +ecause feedforwardco&tro!s are i&te&ded to pre(e&t de(iatio&s' &otcorrect the. after the" occur#

A&swer ) is correct# Beedforward pre!i.i&ar"co&tro!s a&ticipate a&d a(oid future perfor.a&cepro+!e.s# A& e%a.p!e is the ua!it" co&tro!i&spectio& of raw .ateria!s a&d wor-i&-process toa(oid defecti(e fi&ished goods#

A&swer C is i&correct +ecause feed+ac co&tro!s.a" +e .ore eco&o.ica! tha& feedforward co&tro!s#Bor e%a.p!e' the !atter .a" reuire .ore freue&ti&spectio&s#

A&swer , is i&correct +ecause this wou!d +e a+e&efit of co&curre&t i#e#' detecti(e co&tro!s#

[21] Source: CA 1192 -14

A&swer A is i&correct +ecause feed+ac co&tro!sre(iew a co.p!eted tra&sactio& to i.pro(e futureacti(it"#

A&swer ) is i&correct +ecause strategic p!a&&i&g isa ge&era! guide for the orga&i/atio& that is de(e!oped+" top .a&age.e&t#

A&swer C is i&correct +ecause ua!it" co&tro! is

co&cer&ed with the productio& fu&ctio& a&d t"pica!!"ser(es as a feed+ac co&tro!#

A&swer , is correct# Beedforward co&tro! pro(idesfor the acti(e a&ticipatio& of pro+!e.s so that the"ca& +e a(oided or reso!(ed i& a ti.e!" .a&&er# A&other e%a.p!e is the ua!it" co&tro! i&spectio& ofraw .ateria!s a&d wor-i&-process to a(oid defecti(efi&ished goods#

[22] Source: CA 1191 -11

A&swer A is i&correct +ecause feed+ac co&tro!sapp!" to decisio& .ai&g +ased o& e(a!uatio&s ofpast perfor.a&ce#

A&swer ) is i&correct +ecause strategic co&tro!sare +road-+ased a&d affect a& orga&i/atio& o(er a!o&g period# The" app!" to such !o&g-ter. (aria+!esas ua!it" a&d ?,#

A&swer C is i&correct +ecause co&tro! of +udgetede%pe&ditures is &ot .e&tio&ed i& the e%a.p!e#

A&swer , is correct# Beedforward co&tro! pro(idesfor the acti(e a&ticipatio& of pro+!e.s so that the"ca& +e a(oided or reso!(ed i& a ti.e!" .a&&er# A&other e%a.p!e is the ua!it" co&tro! i&spectio& ofraw .ateria!s a&d wor-i&-process to a(oid defecti(efi&ished goods#

[23] Source: CA 0792 -14

A&swer A is correct# A feed+ac co&tro! .easures

actua! perfor.a&ce' so.ethi&g that has a!read"occurred' to e&sure that a desired future state isattai&ed# t is used to e(a!uate the past to i.pro(efuture perfor.a&ce# &specti&g fi&ished goods'.o&itori&g product retur&s' a&d e(a!uati&g co.p!ai&tsare post-actio& co&tro!s i&te&ded to e!i.i&atede(iatio&s i& future c"c!es of the process u&derco&tro!#

A&swer ) is i&correct +ecause feedforwardco&tro!s a&ticipate pro+!e.s +efore the" occur#

A&swer C is i&correct +ecause custo.er co.p!ai&tsare &ot part of productio& co&tro!#

A&swer , is i&correct +ecause T=C' which is ofte&associated with HT s"ste.s +ut is app!ica+!e to othere&(iro&.e&ts' is a phi!osoph" e.phasi/i&g that each.e.+er of the orga&i/atio& is a ua!it" co&tro!i&spector# t de-e.phasi/es the ro!e of separateua!it" co&tro! depart.e&ts +" .ai&g eache.p!o"ee respo&si+!e for hisEher wor# e&ce' T=Cis &ot !i.ited to i&(e&tor" co&tro!#

[2] Source: CA 1191 -10

A&swer A is i&correct +ecause +udgeti&g' fi&a&cia!ratio a&a!"sis' a&d cash .a&age.e&t are .ea&s offi&a&cia! co&tro!#

A&swer ) is correct# A& orga&i/atio&a! co&tro!s"ste. .ust +e +ased o& a state.e&t of what is to +eachie(ed a&d whe& o+>ecti(es# The acco.p!ish.e&tof o+>ecti(es depe&ds o& the esta+!ish.e&t ofsta&dards that ser(e as feedforward co&tro!s# Adhere&ce to perfor.a&ce sta&dards sig&ifies that a&orga&i/atio& is o& course to attai& its o+>ecti(es# Awe!!-de(e!oped e(a!uatio&-reward s"ste. that isc!ear!" co..u&icated to e.p!o"ees shou!d .oti(atethe. to i.pro(ed perfor.a&ce#

A&swer C is i&correct +ecause ro!e a&a!"sis' tea.+ui!di&g' a&d sur(e" feed+ac are used i&de(e!op.e&ta! efforts to correct orga&i/atio&a!deficie&cies#

A&swer , is i&correct +ecause goa! setti&g'e.power.e&t' a&d >o+ e&rich.e&t are a!!.oti(atio&a! strategies#

[27] Source: CA 0792 -1;

A&swer A is i&correct +ecause &o +asis is gi(e& forthe co&c!usio& that the sa.p!e is too s.a!!#

A&swer ) is i&correct +ecause upper a&d !ower!i.its sta&dards are pro(ided#

A&swer C is correct# Co&tro! is the process of.ai&g certai& that p!a&s are achie(i&g the desiredo+>ecti(es# A co&tro! s"ste. operates throughesta+!ishi&g sta&dards of perfor.a&ce' .easuri&gactua! perfor.a&ce' a&a!"sis a&d co.pariso& ofperfor.a&ce with sta&dards' tai&g correcti(e actio&'a&d re(iewi&g a&d re(isi&g sta&dards#

A&swer , is i&correct +ecause the worer shou!d.ae the .easure.e&ts# A T=C phi!osoph" .aeseach worer a ua!it" co&tro! i&spector#

[26] Source: CA 11;7 -11

A&swer A is correct# $%ter&a! sta&dards areesta+!ished outside the e&tit"# Go(er&.e&t regu!atio&s



a&d trade associatio& sta&dards are e%a.p!es#Sta&dardi/atio& of shoe si/es is deri(ed fro. e%ter&a!factors a&d is of o+(ious +e&efit to co&su.ers#

A&swer ) is i&correct +ecause e&gi&eeredsta&dards re!ate to .achi&e capacities u&der perfectco&ditio&s' e#g#' &o dow&ti.e' etc#

A&swer C is i&correct +ecause producti(it"sta&dards co&cer& output per u&it of ti.e a&d are+ased o& a& a&a!"sis of the tas a&d the si!!s of theworers#

A&swer , is i&correct +ecause efficie&c" sta&dardsre!ate to produci&g a product at the !owest cost#

[24] Source: CA 11;7 -13

A&swer A is i&correct +ecause creati(it" is difficu!tif &ot i.possi+!e to .easure#

A&swer ) is correct# =ua&tifia+!e sta&dards are the.ost o+>ecti(e si&ce .easure.e&t of perfor.a&ce isreadi!" acco.p!ished# A +udget is a ua&titati(e

sta&dard for co&tro!!i&g cost' output' or ti.e spe&t o&a pro>ect#

A&swer C is i&correct +ecause it reuires su+>ecti(e >udg.e&t#

A&swer , is i&correct +ecause pro>ect co.p!etio&withi& +udget co&strai&ts is the o&!" o+>ecti(ee(a!uatio& i& the !ist#

[2;] Source: CA 07;; -12

A&swer A is correct# )eha(ior-orie&tedperfor.a&ce e(a!uatio& rewards the +eha(ior that isdesired +" .a&age.e&t# )eha(ior co&tro! i&(o!(es

e%a.i&i&g wor processes rather tha& wor output#

A&swer ) is i&correct +ecause the goa!-orie&tedapproach .easures how we!! the e.p!o"ee attai&edthe o+>ecti(es or goa!s set +" .a&age.e&t#

A&swer C is i&correct +ecause a trait-orie&tedapproach te&ds to reward what the super(isor thi&sof the e.p!o"ee rather tha& the >o+ the e.p!o"ee did#

A&swer , is i&correct +ecause a&e.p!o"ee-orie&ted approach wou!d focus o& whodid the >o+#

[29] Source: CA 0792 -4

A&swer A is i&correct +ecause T=C is a ua!it"co&tro! progra. i& which e(er"o&e sees ua!it"co&tro! as hisEher >o+#

A&swer ) is i&correct +ecause >o+ e&!arge.e&trefers to i&creasi&g the &u.+er of tass o&e .ustperfor.#

A&swer C is i&correct +ecause a&+a& is a .a&ua!i&(e&tor" tech&iue used i& >ust-i&-ti.e i&(e&tor"co&tro! s"ste.s#

A&swer , is correct# Accordi&g to Marsha!!Soshi& [Larticipati(e Ma&age.e&t is a& $thica!.perati(e'L rga&i/atio&a! ,"&a.ics 12 Spri&g

19;: -22] e.p!o"ees .a" participate i& goa!setti&g' decisio& .ai&g' pro+!e. so!(i&g' a&ddesig&i&g a&d i.p!e.e&ti&g cha&ge# Su+>ect to(arious i&di(idua! (a!ues a&d attitudes'

orga&i/atio&a! e#g#' >o+ desig& a&d co.pa&" cu!ture'a&d e&(iro&.e&ta! such as tech&o!ogica! cha&ge a&dco.petitio& co&ti&ge&cies' worers who participatei& the afore.e&tio&ed wa"s shou!d e%perie&ce greaterauto&o." a&d fi&d their tass .ore .ea&i&gfu!# &tur&' this e%perie&ce shou!d !ead to satisfactio&'cha!!e&ge' securit"' a&d accepta&ce a&d co..it.e&t#@!ti.ate resu!ts are i&&o(atio& a&d i.pro(edperfor.a&ce a&d producti(it"#

[30] Source: CMA 069 3-14

A&swer A is i&correct +ecause a .ai&te&a&ce costis a pre(e&tio& cost#

A&swer ) is i&correct +ecause i&spectio& is a&appraisa! cost#

A&swer C is correct# & a T=M s"ste.' o&e of thecosts of product &o&-co&for.a&ce is i&ter&a! fai!urecost' which is the cost of disco(eri&g' after appraisa!+ut +efore ship.e&t' that a co.p!eted product does&ot .eet ua!it" sta&dards# A& e%a.p!e is the cost ofrewori&g the product#

A&swer , is i&correct +ecause product reca!!s aree%ter&a! fai!ure costs#

[31] Source: CMA 1297 3-13

A&swer A is i&correct +ecause e%ter&a! fai!ure costsare those i&curred for ua!it" reaso&s after theproduct has reached the custo.er< for e%a.p!e'warra&t" a&d product !ia+i!it" costs wou!d +ec!assified as e%ter&a! fai!ure costs#

A&swer ) is correct# SMA -? !ists four categoriesof ua!it" costs: pre(e&tio&' appraisa!' i&ter&a! fai!ure'a&d e%ter&a! fai!ure !ost opportu&it"# &ter&a! fai!ure

costs are i&curred whe& detectio& of defecti(eproducts occurs +efore ship.e&t# $%a.p!es i&c!udescrap' rewor' too!i&g cha&ges' a&d dow&ti.e#

A&swer C is i&correct +ecause scrap a&d reworcosts are i&curred after a product has +ee&.a&ufactured< the" are &ot pre(e&tio& costs#

A&swer , is i&correct +ecause appraisa! costs arethose i&curred to disco(er ua!it" pro+!e.s< scrapa&d rewor occur after the disco(er" of a ua!it"pro+!e.#

[32] Source: CA 0792 F-11

A&swer A is correct# Co&tro!!a+!e costs ca& +echa&ged +" actio& tae& at the appropriate.a&age.e&t respo&si+i!it" !e(e!# A!! costs areco&tro!!a+!e' +ut the" are co&tro!!ed at differe&t.a&age.e&t !e(e!s< e#g#' the decisio& to +ui!d a&otherp!a&t is .ade at a higher !e(e! of .a&age.e&t tha& thedecisio& to +u" office supp!ies#

A&swer ) is i&correct +ecause period costs arethose deducted as e%pe&ses duri&g the curre&t periodwithout ha(i&g +ee& pre(ious!" c!assified as costs ofi&(e&tor"#

A&swer C is i&correct +ecause (aria+!e costs arethose that are u&ifor. per u&it produced +ut f!uctuatei& tota! i& direct proportio& to cha&ges i& the re!ated

tota! acti(it" or (o!u.e#

A&swer , is i&correct +ecause co..itted costs arethose arisi&g fro. .ai&tai&i&g a& orga&i/atio&' e#g#'



depreciatio&' i&sura&ce' a&d propert" ta%es# Thesecosts ha(e a !o&g p!a&&i&g hori/o&' a&d theirre!atio&ship to specific +e&efits is u&certai&#

[33] Source: CMA 0692 3-22

A&swer A is i&correct +ecause a+sorptio& coststate.e&ts ca& +e .a&ipu!ated +" >ugg!i&g productio&!e(e!s# igher productio& resu!ts i& !ower u&it costs#

A&swer ) is correct# Seg.e&ted i&co.e state.e&tsprese&t separate re(e&ues a&d costs for the su+u&itsof a& orga&i/atio&# State.e&ts prepared o& the +asisof cost +eha(ior are usua!!" the .ost .ea&i&gfu!+ecause o&!" the& is it possi+!e to e(a!uate how aseg.e&t .a&ager co&tro!!ed the costs u&der his orher co&tro!# Faria+!e costs are .ore !ie!" to +eco&tro!!a+!e#

A&swer C is i&correct +ecause cash +asisstate.e&ts rare!" are usefu! i& e(a!uati&g .a&agers#The co!!ectio& of cash .a" &ot +e the .ost sig&ifica&te(e&t i& the ear&i&g process#

A&swer , is i&correct +ecause a si&g!e-step for.atshows cost of goods so!d as &o .ore i.porta&t tha&a&" other t"pe of cost# This treat.e&t is &ot +e&eficia!whe& .a&ufacturi&g costs are a high perce&tage oftota! costs#

[3] Source: CMA 0692 3-2

A&swer A is i&correct +ecause operati&g !e(erage isa .easure of the cha&ge i& operati&g i&co.e resu!ti&gfro. a perce&tage cha&ge i& sa!es#

A&swer ) is i&correct +ecause da"s5 sa!es i&accou&ts recei(a+!e is a .easure of operatio&a!efficie&c"#

A&swer C is i&correct +ecause i&(e&tor" tur&o(er isa .easure of operatio&a! efficie&c"#

A&swer , is correct# ?outi&e operatio&a! efficie&c"is e(a!uated +" ratios or &o&fi&a&cia! .easures#?esidua! i&co.e .easures o(era!! .a&age.e&tperfor.a&ce# ?esidua! i&co.e is the e%cess of theretur& o& a& i&(est.e&t o(er a targeted a.ou&t eua!to a& i.puted i&terest charge o& i&(ested capita!#So.e e&terprises prefer to .easure .a&ageria!perfor.a&ce i& ter.s of the a.ou&t of residua!i&co.e rather tha& the perce&tage retur& o&i&(est.e&t# The pri&cip!e is that the e&terprise ise%pected to +e&efit fro. e%pa&sio& as !o&g asresidua! i&co.e is ear&ed# @si&g a perce&tage ?

approach' e%pa&sio& .ight +e re>ected if it !owered?' e(e& though residua! i&co.e wou!d i&crease#

[37] Source: CMA 1292 3-27

A&swer A is i&correct +ecause a good perfor.a&cereport wi!! +e re!ated to the orga&i/atio&5s i&ter&a!structure#

A&swer ) is i&correct +ecause a!! co&tro!!a+!e ite.sshou!d +e show& o& perfor.a&ce reports#

A&swer C is i&correct +ecause perfor.a&ce reportsshou!d represe&t acti(ities o(er a specified period ofti.e#

A&swer , is correct# erfor.a&ce reports shou!d+e re!ated to the orga&i/atio&a! structure i& so.e wa"a&d shou!d ha(e a user focus +ecause the o+>ecti(e is

to pro(ide feed+ac# The perfor.a&ce report shou!dha(e specific ti.e hori/o&s# A!! co&tro!!a+!e ite.sshou!d +e i&c!uded i& the perfor.a&ce report' e(e&e%traordi&ar" ite.s# Strategic p!a&s' howe(er' are &oti&c!uded i& a perfor.a&ce report +ecause the" are!o&g-ra&ge a&d co&cer& the e&(iro&.e&t i& which theorga&i/atio& operates#

[36] Source: CMA 1292 3-2;

A&swer A is i&correct +ecause a di(isio& .a&agerhas &o co&tro! o(er di(ide&ds or ti.es i&terestear&ed#

A&swer ) is correct# To i.pro(e profita+i!it"'.a&agers shou!d co&ce&trate o& those acti(ities o(erwhich the" ha(e co&tro!# Thus' a di(isio& .a&agershou!d ai. for i&creased tur&o(er of operati&g assets'higher gross profit .argi&' a&d greater retur& o&euit"#

A&swer C is i&correct +ecause a di(isio& .a&agerhas &o co&tro! o(er the de+t-to-euit" ratio#

A&swer , is i&correct +ecause a di(isio& .a&agerhas &o co&tro! o(er di(ide&ds or ti.es i&terestear&ed#

[34] Source: CMA 1292 3-29

A&swer A is i&correct +ecause retur& o& assets is&ot a .easure of !iuidit"#

A&swer ) is i&correct +ecause retur& o& assets is&ot a .easure of !iuidit"#

A&swer C is i&correct +ecause retur& o& euit" is&ot a !iuidit" .easure#

A&swer , is correct# To +e effecti(e' perfor.a&ce.easures .ust +e withi& the co&tro! of the .a&agera&d .ea&i&gfu! to the area i& which perfor.a&ce isdesired# Such co&tro!s .ust fair!" ref!ect the e(e&tsthe" are desig&ed to .easure# A co.pa&"5s !iuidit"ca& +e i&f!ue&ced +" its accou&ts recei(a+!e tur&o(er'i&(e&tor" tur&o(er' a&d its curre&t ratio# A!! of these.easures are withi& the co&tro! of the treasurer5sdepart.e&t#

[3;] Source: CMA 0693 3-13

A&swer A is i&correct +ecause pre(e&tio& costs arei&curred i& a& atte.pt to a(oid defecti(e output#

A&swer ) is correct# =ua!it"-re!ated costs ca& +esu+di(ided i&to four categories: e%ter&a! fai!ure costs'i&ter&a! fai!ure costs' pre(e&tio& costs' a&d appraisa!costs# Appraisa! costs e.+race such acti(ities asstatistica! ua!it" co&tro! progra.s' i&spectio&' a&dtesti&g# Thus' the cost of detecti&g &o&co&for.i&gi&di(idua! products is a& appraisa! cost#

A&swer C is i&correct +ecause e%ter&a! fai!ure costsarise whe& ua!it" pro+!e.s occur after ship.e&t#

A&swer , is i&correct +ecause opportu&it" costsare &ot specifica!!" associated with product ua!it"#pportu&it" cost is the .a%i.u. +e&efit forgo&e +"usi&g a scarce resource for a gi(e& purpose< it is the+e&efit pro(ided +" the &e%t +est use of that

resource#



[39] Source: CMA 0693 3-14

A&swer A is correct# Ma&ufacturi&g c"c!e efficie&c"is defi&ed as the uotie&t of the ti.e reuired for(a!ue-added productio& di(ided +" tota!.a&ufacturi&g !ead ti.e# Bor this order' the tota! !eadti.e is 12 da"s 7#0 N 1#7 N 3#0 N 2#7' a&d the.a&ufacturi&g c"c!e efficie&c" is 278 3 da"s ofprocessi&g ・12#

A&swer ) is i&correct +ecause 13#68 i&c!udes the10 da"s prior to productio& i& the de&o.i&ator' aperiod &ot i&c!uded i& the ca!cu!atio& of .a&ufacturi&gc"c!e efficie&c"#

A&swer C is i&correct +ecause i&spectio& ti.e a&d.o(e ti.e shou!d +e i&c!uded i& the de&o.i&ator#

A&swer , is i&correct +ecause the ca!cu!atio&i&(o!(es di(idi&g the 3 da"s of processi&g ti.e +" thetota! of 12 da"s to co.p!ete productio&#

[0] Source: CMA 0693 3-1;

A&swer A is i&correct +ecause 4 da"s e%c!udes thewait ti.e#

A&swer ) is i&correct +ecause 12 da"s ig&ores the10 da"s of the waiti&g period prior to the start ofproductio&#

A&swer C is i&correct +ecause 17 da"si&corporates the wait ti.e +ut &ot the productio&periods#

A&swer , is correct# The de!i(er" c"c!e ti.e isdefi&ed as the e&tire ti.e fro. receipt of the orderu&ti! de!i(er" of the order# This period eua!s 22 da"s10#0 N 7#0 N 1#7 N 3#0 N 2#7

[1] Source: CMA 0693 3-21

A&swer A is i&correct +ecause' if the costs are &ota!!ocated to i&di(idua! .a&agers' the" ha(e &o reaso&to o+>ect to the a!!ocatio&#

A&swer ) is correct# Co&tro! is the process of.ai&g certai& that p!a&s are achie(i&g the desiredo+>ecti(es# A +udget is o&e of the .ost co..o&co&tro! de(ices# t is a p!a& for the future< it is &ot aco&tract# To i&terpret a +udget or other p!a& to +e asi&f!e%i+!e as a co&tract .a" e&courage a .a&ager toact i& wa"s co&trar" to the co.pa&"5s +est i&terest i&a .isguided effort to .eet the criteria proposed#

A&swer C is i&correct +ecause participator"+udgeti&g o+tai&s the support of those i&(o!(ed a&d is!ie!" to foster desira+!e +eha(ior#

A&swer , is i&correct +ecause cha&gi&g +udgettargets as co&ditio&s cha&ge resu!ts i& setti&g fairerperfor.a&ce goa!s#

[2] Source: CMA 0693 3-2;

A&swer A is i&correct +ecause' whe& seg.e&ts areauto&o.ous' other seg.e&ts are regarded as e%ter&a!parties' e#g#' as supp!iers' custo.ers' or co.petitors#

A&swer ) is i&correct +ecause dece&tra!i/i&g

decisio&-.ai&g authorit" !eads to .ore effecti(eso!utio&s to operatio&a! pro+!e.s# So!utio&s wi!!co.e fro. the i&di(idua!s with the greatest&ow!edge of the operatio&s i&(o!(ed#

A&swer C is correct# ,ece&tra!i/atio& is +e&eficia!+ecause it creates greater respo&si(e&ess to the&eeds of !oca! custo.ers' supp!iers' a&d e.p!o"ees#Ma&agers at !ower !e(e!s are .ore &ow!edgea+!ea+out !oca! .arets a&d the &eeds of custo.ers' etc# A dece&tra!i/ed orga&i/atio& is a!so .ore !ie!" torespo&d f!e%i+!" a&d uic!" to cha&gi&g co&ditio&s'for e%a.p!e' +" e%pediti&g the i&troductio& of &ewproducts# Burther.ore' greater authorit" e&ha&ces.a&ageria! .ora!e a&d de(e!op.e&t# ,isad(a&tagesof dece&tra!i/atio& i&c!ude dup!icatio& of effort a&d!ac of goa! co&grue&ce# Therefore' dece&tra!i/atio&wi!! i&crease the cha&ce that two di(isio&s of the sa.eorga&i/atio& wi!! ha(e co.peti&g .ode!s that +othai. for the sa.e .aret seg.e&ts#

A&swer , is i&correct +ecause a dece&tra!i/edorga&i/atio& is .ore !ie!" to respo&d uic!" tocha&gi&g co&ditio&s# Therefore' dece&tra!i/atio&shou!d resu!t i& a reductio& of the de!a"s i& securi&gappro(a! for the i&troductio& of &ew products#

[3] Source: CMA 0693 3-30

A&swer A is i&correct +ecause the use of theresidua! i&co.e .ethod ca& cause goa! co&grue&c"pro+!e.s# ?esidua! i&co.e eua!s i&co.e afterdeductio& of a& i.puted i&terest charge o& the asset+ase# A di(isio& with a !arge asset +ase wou!d&or.a!!" ha(e .ore residua! i&co.e tha& a s.a!!erdi(isio& whe& the two di(isio&s are eua!!" profita+!ei& perce&tage ter.s#

A&swer ) is i&correct +ecause !ower-!e(e!.a&agers wi!! tae a serious approach to +udgeti&g ifthe" &ow that their superiors are stro&g!" co..ittedto the process#

A&swer C is i&correct +ecause a co.pa&" usi&g a

+a!a&ced approach to perfor.a&ce e(a!uatio& wi!!ha(e a (ariet" of .easure.e&t de(ices#

A&swer , is correct# Co&tro! is the process of.ai&g certai& that p!a&s are achie(i&g the desiredo+>ecti(es# The esse&ce of co&tro! is feed+ac o& theresu!ts of actio&# Thus' the de(e!op.e&t ofi&for.atio& tech&o!og" i& the 1990s wi!! i& &o wa"per.it orga&i/atio&s to e!i.i&ate feed+ac i& thedesig& of .a&age.e&t co&tro! s"ste.s#

[] Source: CMA 069 3-16

A&swer A is correct# T=M e.phasi/es thesupp!ier5s re!atio&ship with the custo.er' a&d

recog&i/es that e(er"o&e i& a process is at so.e ti.ea custo.er or supp!ier of so.eo&e e!se' either withi&or outside the orga&i/atio&# The costs of ua!it"i&c!ude costs of co&for.a&ce a&d costs of&o&-co&for.a&ce# Costs of co&for.a&ce i&c!udepre(e&tio& costs a&d appraisa! i&spectio& costs#Do&-co&for.a&ce costs are co.posed of i&ter&a!fai!ure costs a&d e%ter&a! fai!ure costs' such as !ostopportu&it"# Co&for.a&ce costs pre(e&tio& a&dappraisa! i&creased su+sta&tia!!"' whereas the&o&-co&for.a&ce costs i&ter&a! a&d e%ter&a! fai!uredecreased# e&ce' the i&crease i& co&for.a&ce costsresu!ted i& a higher ua!it" product#

A&swer ) is i&correct +ecause pre(e&tio& costsa!so i&creased su+sta&tia!!"' which cou!d a!so ha(e

!ed to higher ua!it" products#

A&swer C is i&correct +ecause scrap a&d reworare i&ter&a! fai!ure costs' which decreased +" 08#



A&swer , is i&correct +ecause retur&s a&d repairsare e%ter&a! fai!ure costs' which decreased +" ;8#

[7] Source: CMA 1297 3-12

A&swer A is i&correct +ecause carr"i&g cost is &oto&e of the e!e.e&ts of ua!it" costs#

A&swer ) is correct# SMA -? !ists four categoriesof ua!it" costs: pre(e&tio&' appraisa!' i&ter&a! fai!ure'a&d e%ter&a! fai!ure !ost opportu&it"# Costs ofpre(e&tio& i&c!ude atte.pts to a(oid defecti(e output'i&c!udi&g e.p!o"ee trai&i&g' re(iew of euip.e&tdesig&' pre(e&ti(e .ai&te&a&ce' a&d e(a!uatio& ofsupp!iers# Appraisa! costs i&c!ude ua!it" co&tro!progra.s' i&spectio&' a&d testi&g# &ter&a! fai!urecosts are i&curred whe& detectio& of defecti(eproducts occurs +efore ship.e&t' i&c!udi&g scrap'rewor' too!i&g cha&ges' a&d dow&ti.e# $%ter&a!fai!ure costs are i&curred after the product has +ee&shipped' i&c!udi&g the costs associated withwarra&ties' product !ia+i!it"' a&d custo.er i!! wi!!#

A&swer C is i&correct +ecause trai&i&g costs are&ot a categor" of ua!it" costs#

A&swer , is i&correct +ecause warra&t"' product!ia+i!it"' a&d trai&i&g are &ot cost categories ide&tified+" SMA -?#

[6] Source: CMA 0696 3-7

A&swer A is i&correct +ecause the si.p!epreparatio& of a +udget does &ot address the co&tro!aspect of the process#

A&swer ) is i&correct +ecause the si.p!epreparatio& of a +udget does &ot address the co&tro!

aspect of the process#

A&swer C is correct# The +udget has the sa.estructure as the orga&i/atio& itse!f# The co.p!ete+udget is .ade up of a hierarch" of s.a!!er +udgets'each represe&ti&g the p!a& of a di(isio&' depart.e&t'or other u&it i& the orga&i/atio&a! structure# Successfu!+udgeti&g reuires co.p!etio& of a p!a& that statesorga&i/atio&a! goa!s +efore the +udgeti&g process#re(e&tio& a&d detectio& of de(iatio&s fro. the+udget are the co&tro! purposes of +udgets#

A&swer , is i&correct +ecause participati(e+udgeti&g i.p!ies a +udget that is prepared >oi&t!" +".a&age.e&t a&d !ower-!e(e! e.p!o"ees< it is o&!"o&e of .a&" processes of +udget de(e!op.e&t#

[4] Source: CMA 1296 3-22

A&swer A is i&correct +ecause trai&i&g costs arepre(e&tio& costs#

A&swer ) is i&correct +ecause the costs of e%ter&a!fai!ure' such as warra&t" e%pe&se' product !ia+i!it"'a&d custo.er i!! wi!!' arise whe& pro+!e.s aredisco(ered after products ha(e +ee& shipped#

A&swer C is correct# Accordi&g to SMA -?'i&ter&a! fai!ure costs are i&curred whe& detectio& ofdefecti(e products occurs +efore ship.e&t# $%a.p!esof i&ter&a! fai!ure costs are scrap' rewor' too!i&g

cha&ges' a&d dow&ti.e#

A&swer , is i&correct +ecause pre(e&tio& costs arei&curred to a(oid defecti(e output# $%a.p!es i&c!ude

pre(e&ti(e .ai&te&a&ce' e.p!o"ee trai&i&g' re(iew ofeuip.e&t desig&' a&d e(a!uatio& of supp!iers#

[;] Source: u+!isher

A&swer A is correct# The proper seue&ce of stepsi& a t"pica! co&tro! process is as fo!!ows:

1# Se!ecti&g strategic co&tro! poi&ts at which to gather i&for.atio& a+out acti(ities +ei&g perfor.ed 2# +ser(i&g the wor or co!!ecti&g sa.p!es of data 3# Accu.u!ati&g' c!assif"i&g' a&d recordi&g data sa.p!es # Co.pari&g sa.p!es with predeter.i&ed ua!it"'schedu!e' a&d cost sta&dards 7# ,eter.i&i&g whether perfor.a&ce is satisfactor" 6# ?eporti&g sig&ifica&t de(iatio&s to .a&agers co&cer&ed 4# ,eter.i&i&g' +" repeati&g the a+o(e steps' whether actio& tae& is effecti(e i& correcti&g reported de(iatio&s fo!!ow-up ;# ?e(iewi&g a&d re(isi&g sta&dards

A&swer ) is i&correct +ecause o+ser(atio& .ustoccur +efore c!assif"i&g a&d recordi&g data sa.p!es#

A&swer C is i&correct +ecause data .ust +erecorded +efore co.pariso&s ca& occur#

A&swer , is i&correct +ecause data .ust +erecorded +efore co.pariso&s ca& occur#


A&swer A is i&correct +ecause pre(e&ti(e.ai&te&a&ce is a feedforward co&tro! +ecause itatte.pts to a&ticipate a&d pre(e&t pro+!e.s#

A&swer ) is correct# Beed+ac co&tro!s o+tai&i&for.atio& a+out co.p!eted acti(ities# The" per.it

i.pro(e.e&t i& future perfor.a&ce +" !ear&i&g fro.past .istaes# Thus' correcti(e actio& occurs afterthe fact# &spectio& of co.p!eted goods is a&e%a.p!e of a feed+ac co&tro!#

A&swer C is i&correct +ecause the c!osesuper(isio& of productio&-!i&e worers is aco&curre&t co&tro! +ecause it ad>usts a& o&goi&gprocess#

A&swer , is i&correct +ecause .easuri&gperfor.a&ce agai&st a sta&dard is a ge&era! aspect ofco&tro!#


A&swer A is correct# Co&tro! de(ices .a" +e eitherua!itati(e or ua&titati(e# )udgets' schedu!es'uotas' a&d charts are e%a.p!es of ua&titati(eco&tro! de(ices# Ho+ i&structio&s' ua!it"-co&tro!sta&dards' a&d e.p!o".e&t criteria are ua!itati(eco&tro! de(ices#

A&swer ) is i&correct +ecause co&tro! de(ices .a"+e either ua&titati(e or ua!itati(e#

A&swer C is i&correct +ecause co&tro! de(ices .a"+e either ua&titati(e or ua!itati(e#

A&swer , is i&correct +ecause co&tro! de(ices .a"+e either ua&titati(e or ua!itati(e#




A&swer A is i&correct +ecause effecti(e co&tro!sshou!d +e eco&o.ica! +ecause e%cessi(e co&tro!s arecost!" i& ti.e a&d .o&e"#

A&swer ) is i&correct +ecause effecti(e co&tro!s&eed to +e ti.e!" +ecause outdated i&for.atio& .a"+e u&re!ia+!e#

A&swer C is correct# A& effecti(e co&tro! s"ste.shou!d +e .ea&i&gfu!# Therefore' co&tro!s shou!d +ei& p!ace to .easure perfor.a&ce o&!" i& i.porta&t

areas# $%cessi(e co&tro!s i& .i&or areas are &oteco&o.ica! +ecause the added +e&efits do &otoutweigh the !oss of ti.e a&d .o&e"#

A&swer , is i&correct +ecause effecti(e co&tro!s&eed to +e si.p!e e&ough that the peop!e usi&g theco&tro! ca& u&dersta&d it#


A&swer A is i&correct +ecause $?T is a co&tro!too! as we!! as a p!a&&i&g too!#

A&swer ) is correct# $?T rogra. $(a!uatio&?e(iew Tech&iue is app!ied i& the .a&age.e&t ofco.p!e% pro>ects# t a&a!"/es the pro>ect i& ter.s ofits co.po&e&t acti(ities a&d deter.i&es theirseue&ci&g a&d ti.i&g# Thus' it s"ste.atica!!"co.+i&es p!a&&i&g with co&tro!#

A&swer C is i&correct +ecause $?T is a p!a&&i&gtoo!#

A&swer , is i&correct +ecause $?T is a p!a&&i&gtoo!#


A&swer A is i&correct +ecause the" are +e&efits ofe.p!o"ee participatio& i& the sta&dard-setti&gprocess#

A&swer ) is i&correct +ecause the" are +e&efits ofe.p!o"ee participatio& i& the sta&dard-setti&gprocess#

A&swer C is i&correct +ecause the" are +e&efits ofe.p!o"ee participatio& i& the sta&dard-setti&gprocess#

A&swer , is correct# The ease of i.p!e.e&ti&gco.pa&"-wide sta&dards is &ot a +e&efit of e.p!o"eeparticipatio&# $.p!o"ees shou!d +e i&(o!(ed i& the

esta+!ish.e&t of their ow& sta&dards' +ased o& theco&ditio&s i& their ow& worp!aces#

[7] Source: CA 11;; F-71

A&swer A is correct# A +udget is a ua&titati(e.ode! of a p!a& of actio& de(e!oped +" .a&age.e&t# A +udget fu&ctio&s as a& aid to p!a&&i&g'coordi&atio&' a&d co&tro!# Thus' a +udget he!ps.a&age.e&t to a!!ocate resources efficie&t!"#

A&swer ) is i&correct +ecause +udgets aredesig&ed to use resources efficie&t!"' &ot >ust usethe.#

A&swer C is i&correct +ecause +udgets per sepro(ide for &o auto.atic correctio&s#

A&swer , is i&correct +ecause +udgets are a

.a&age.e&t too! a&d are &ot desig&ed to thwart

.a&ageria! discretio&#

[77] Source: CA 07;9 F-13

A&swer A is i&correct +ecause e.p!o"ee.oti(atio& is a sig&ifica&t +ut seco&dar" purpose of+udgets# !a&&i&g is the fou&datio& of other.a&ageria! fu&ctio&s' such as e.p!o"ee .oti(atio&#

A&swer ) is i&correct +ecause perfor.a&cee(a!uatio& is a sig&ifica&t +ut seco&dar" purpose of+udgets# !a&&i&g is the fou&datio& of other.a&ageria! fu&ctio&s' such as perfor.a&cee(a!uatio&s#

A&swer C is correct# Ma&agers i& a for.a! +udgetsetti&g are co.pe!!ed to e%a.i&e the future a&d +eprepared to respo&d to future co&ditio&s# *ithout+udgets' .a&" operatio&s wou!d fai! +ecause ofi&adeuate p!a&&i&g#

A&swer , is i&correct +ecause co..u&icatio& is asig&ifica&t +ut seco&dar" purpose of +udgets#

!a&&i&g is the fou&datio& of other .a&ageria!fu&ctio&s' such as co..u&icatio&#

[76] Source: CA 07;6 -17

A&swer A is i&correct +ecause it is u&!ie!" that the&u.+er of e.p!o"ees wi!! cha&ge due to the &ews"ste.#

A&swer ) is correct# *he& a!! custo.ers .ust waiti& a si&g!e ueue' it is possi+!e to decrease waiti&gti.e gi(e& .u!tip!e ser(ers# A& added effect is toi&crease custo.er satisfactio&#

A&swer C is i&correct +ecause' assu.i&g a oisso&

process' the &u.+er of custo.ers per te!!er wi!! &otcha&ge#

A&swer , is i&correct +ecause te!!ers5 duties wi!!&ot cha&ge' so o&-the->o+ trai&i&g wi!! &ot i.pro(e#


A&swer A is i&correct +ecause e.p!o"ee resista&ceis .ost !ie!" to occur whe& a co&tro! procedurehigh!ights the thi&gs a& e.p!o"ee does poor!"' thusda.agi&g hisEher se!f-estee.#

A&swer ) is correct# The success of a co&tro!s"ste. is deter.i&ed +" its effecti(e&ess i& getti&g

peop!e to .odif" their perfor.a&ce# The goa!s of aco&tro! s"ste. .a" +e .et with resista&ce if the goa!sare &ot accepted as worthwhi!e +" the e.p!o"ee# Bore%a.p!e' a& e.p!o"ee .a" resist cha&gi&g theirperfor.a&ce whe& she +e!ie(es that the statedsta&dard of perfor.a&ce is set too high#

A&swer C is i&correct +ecause peop!e te&d toa(oid u&p!easa&t situatio&s#

A&swer , is i&correct +ecause the goa!s of aco&tro! s"ste. wi!! .ost !ie!" &ot +e accepted asworthwhi!e +" a& e.p!o"ee whe& the esta+!ishedsta&dards of perfor.a&ce are co&sidered re!e(a&t tothe acco.p!ish.e&t of what a& e.p!o"ee regards asthe pri.ar" >o+ o+>ecti(e#

[7;] Source: u+!isher



A&swer A is i&correct +ecause the" are a!! truestate.e&ts regardi&g hu.a& reactio&s to feed+ac#

A&swer ) is i&correct +ecause the" are a!! truestate.e&ts regardi&g hu.a& reactio&s to feed+ac#

A&swer C is correct# u.a& reactio&s to feed+acshou!d +e co&sidered i& setti&g perfor.a&cesta&dards a&d desig&i&g co&tro! s"ste.s# owe(er'the &ature of feed+ac shou!d .oti(ate e.p!o"ees toi.pro(e their perfor.a&ce a&d reach the p!a&&edo+>ecti(es' rather tha& to offe&d or to i&ti.idate the.#Burther.ore' the ti.i&g' for.' a&d co&te&t of thefeed+ac o& de(iatio&s shou!d +e co&sidered i& orderto o+tai& .a%i.u. co.p!ia&ce +" the affectede.p!o"ees#

A&swer , is i&correct +ecause the" are a!! truestate.e&ts regardi&g hu.a& reactio&s to feed+ac#

[79] Source: CMA 12;; 7-

A&swer A is correct# $%oge&ous or i&put (aria+!esare outside the co&tro! of the decisio& .aer#

$%oge&ous .ea&s Lorigi&ati&g e%ter&a!!"#L Thesei&f!ue&ce the decisio& .ode! s"ste. +ut are &oti&f!ue&ced +" it#

A&swer ) is i&correct +ecause at !east o&e of thedecisio& (aria+!es i& a .ode! .ust +e u&der thedecisio& .aer5s co&tro!< that is' at !east o&e (aria+!eca&&ot +e e%oge&ous#

A&swer C is i&correct +ecause perfor.a&ce criteriaare the .ea&s of .easuri&g the resu!ts of a decisio&after the fact#

A&swer , is i&correct +ecause co&strai&ts are!i.itatio&s co&sta&ts' &ot (aria+!es that .ust +eco&sidered as part of the decisio& process#

[60] Source: CMA 0694 3-2;

A&swer A is i&correct +ecause 4;6 is theappraisa! cost#

A&swer ) is i&correct +ecause 1'17 is thepre(e&tio& cost#

A&swer C is correct# Accordi&g to SMA -?' thecosts of pre(e&tio& a&d appraisa! are co&for.a&cecosts that ser(e as fi&a&cia! .easures of i&ter&a!perfor.a&ce# re(e&tio& costs are i&curred topre(e&t defecti(e output# These costs i&c!udepre(e&ti(e .ai&te&a&ce' e.p!o"ee trai&i&g' re(iew of

euip.e&t desig&' a&d e(a!uatio& of supp!iers# Appraisa! costs are i&curred to detect &o&co&for.i&goutput# The" e.+race such acti(ities as statistica!ua!it" co&tro! progra.s' i&spectio&' a&d testi&g# Theeuip.e&t .ai&te&a&ce cost of 1'17 is apre(e&tio& cost# The product testi&g cost of 4;6 isa& appraisa! cost# Their su. is 1'90#

A&swer , is i&correct +ecause 2'667 i&c!udesrewor' a& i&ter&a! fai!ure cost#

[61] Source: CMA 0694 3-24

A&swer A is i&correct +ecause the costs ofwarra&t" c!ai.s are readi!" .easura+!e e%ter&a!

fai!ure costs captured +" the accou&ti&g s"ste.#

A&swer ) is i&correct +ecause the costs of desig&e&gi&eeri&g are pre(e&tio& costs that are usua!!"

i&c!uded i& cost-of-ua!it" reports#

A&swer C is i&correct +ecause the costs of supp!iere(a!uatio&s are pre(e&tio& costs that are usua!!"i&c!uded i& cost-of-ua!it" reports#

A&swer , is correct# A cost-of-ua!it" reporti&c!udes .ost costs re!ated to ua!it"' i&c!udi&g thecosts of e%ter&a! fai!ure' i&ter&a! fai!ure' pre(e&tio&'a&d appraisa!# Kost co&tri+utio& .argi&s fro. poorproduct ua!it" are e%ter&a! fai!ure costs that &or.a!!"do &ot appear o& a cost-of-ua!it" report +ecausethe" are opportu&it" costs# pportu&it" costs are &otusua!!" recorded +" the accou&ti&g s"ste.' there+"u&derstati&g the costs of poor ua!it"# Kostco&tri+utio& .argi&s fro. reduced sa!es' .aretshare' a&d sa!es prices are e%ter&a! fai!ure costs thatare a!so &ot usua!!" i&c!uded i& a cost-of-ua!it"report#

[62] Source: CMA 1297 3-1

A&swer A is i&correct +ecause i&ter&a! fai!ure costsarise after poor ua!it" has +ee& fou&d< statistica!

ua!it" co&tro! is desig&ed to detect ua!it" pro+!e.s#

A&swer ) is i&correct +ecause statistica! ua!it"co&tro! is &ot a trai&i&g cost#

A&swer C is i&correct +ecause e%ter&a! fai!ure costsare i&curred after the product has +ee& shipped'i&c!udi&g the costs associated with warra&ties'product !ia+i!it"' a&d custo.er i!! wi!!#

A&swer , is correct# SMA -? !ists four categoriesof ua!it" costs: pre(e&tio&' appraisa!' i&ter&a! fai!ure'a&d e%ter&a! fai!ure !ost opportu&it"# Appraisa! costsi&c!ude ua!it" co&tro! progra.s' i&spectio&' a&dtesti&g# owe(er' so.e authorities regard statistica!ua!it" a&d process co&tro! as pre(e&ti(e acti(ities

+ecause the" &ot o&!" detect fau!t" wor +ut a!soa!!ow for ad>ust.e&t of processes to a(oid futuredefects#

[63] Source: CMA 0693 -2;

A&swer A is i&correct +ecause it is re!ated to+reae(e& poi&t' &ot +reae(e& ti.e#

A&swer ) is i&correct +ecause the pa"+ac periodeua!s i&(est.e&t di(ided +" a&&ua! u&discou&ted &etcash i&f!ows#

A&swer C is i&correct +ecause the pa"+ac periodis the period reuired for tota! u&discou&ted cash

i&f!ows to eua! tota! u&discou&ted cash outf!ows#

A&swer , is correct# )reae(e& ti.e e(a!uates therapidit" of &ew product de(e!op.e&t# The usua!ca!cu!atio& deter.i&es the period +egi&&i&g withpro>ect appro(a! that is reuired for the discou&tedcu.u!ati(e cash i&f!ows to eua! the discou&tedcu.u!ati(e cash outf!ows# owe(er' it .a" a!so +eca!cu!ated as the poi&t at which discou&tedcu.u!ati(e cash i&f!ows o& a pro>ect eua! discou&tedtota! cash outf!ows# The co&cept is si.i!ar to thepa"+ac period' +ut it is .ore sophisticated +ecauseit i&corporates the ti.e (a!ue of .o&e"# t a!so differsfro. the pa"+ac .ethod +ecause the periodco(ered +egi&s at the outset of a pro>ect' &ot whe&the i&itia! cash outf!ow occurs#

[6] Source: CA 1196 -60



A&swer A is i&correct +ecause the fai!ure of&etwor fi+er-optic !i&es is a fau!t .a&age.e&tco&tro!#

A&swer ) is i&correct +ecause recordi&gu&authori/ed access (io!atio&s is a securit".a&age.e&t co&tro!#

A&swer C is correct# The S 9000perfor.a&ce-.o&itori&g sta&dards pertai& to.a&age.e&t5s o&goi&g assess.e&t of the ua!it" ofperfor.a&ce o(er ti.e# ?ecordi&g software usage isa perfor.a&ce-.o&itori&g co&tro! co&cer&ed with thee%te&t a&d efficie&c" of &etwor software use#

A&swer , is i&correct +ecause a!!ocati&g &etworcosts to s"ste. users of the &etwor is a& accou&ti&g.a&age.e&t co&tro!#

[67] Source: CA 0797 -22

A&swer A is i&correct +ecause the !a+or rate of aco.petitor is a fi&a&cia! +e&ch.ar#

A&swer ) is i&correct +ecause the cost per pou&dof a product at the co.pa&"5s .ost efficie&t p!a&t is afi&a&cia! +e&ch.ar#

A&swer C is i&correct +ecause the cost of a trai&i&gprogra. is a fi&a&cia! +e&ch.ar#

A&swer , is correct# )e&ch.ari&g Li&(o!(esco&ti&uous!" e(a!uati&g the pri&cip!es of +est-i&-c!assorga&i/atio&s a&d adapti&g co.pa&" processes toi&corporate the +est of these practices#L t La&a!"/esa&d .easures the e" outputs of a +usi&ess processor fu&ctio& agai&st the +est a&d a!so ide&tifies theu&der!"i&g e" actio&s a&d root causes that co&tri+uteto the perfor.a&ce differe&ceL SMA F# Theperce&tage of orders de!i(ered o& ti.e at the

co.pa&"5s .ost efficie&t p!a&t is a& e%a.p!e of a&i&ter&a! &o&fi&a&cia! +e&ch.ar#


A&swer A is i&correct +ecause the" are truestate.e&ts a+out +e&ch.ari&g#

A&swer ) is i&correct +ecause the" are truestate.e&ts a+out +e&ch.ari&g#

A&swer C is i&correct +ecause the" are truestate.e&ts a+out +e&ch.ari&g#

A&swer , is correct# )e&ch.ari&g is a& o&goi&g

process that e&tai!s ua&titati(e a&d ua!itati(e.easure.e&t of the differe&ce +etwee& theco.pa&"5s perfor.a&ce of a& acti(it" a&d theperfor.a&ce +" a +est-i&-c!ass orga&i/atio&# The+e&ch.ari&g orga&i/atio& agai&st which a fir. isco.pari&g itse!f &eed &ot +e a direct co.petitor# Thei.porta&t co&sideratio& is that the +e&ch.ari&gorga&i/atio& +e a& outsta&di&g perfor.er i& itsi&dustr"#

[64] Source: CA 1197 -12

A&swer A is correct# T=M is a& i&tegrated s"ste.that a&ticipates' .eets' a&d e%ceeds custo.ers5&eeds' wa&ts' a&d e%pectatio&s#

A&swer ) is i&correct +ecause reduced de!i(er"ti.e a&d reduced de!i(er" charges are two of .a&"pote&tia! acti(ities that &eed i.pro(e.e&t#

A&swer C is i&correct +ecause reduced de!i(er"ti.e a&d reduced de!i(er" charges are two of .a&"pote&tia! acti(ities that &eed i.pro(e.e&t#

A&swer , is i&correct +ecause i&creased e.p!o"eeparticipatio& is &ecessar" to achie(e T=M' +ut it is&ot the pri.ar" purpose for esta+!ishi&g the progra.#

[6;] Source: CA 1197 -13

A&swer A is i&correct +ecause pre(e&tio& isordi&ari!" !ess cost!" tha& the co.+i&ed costs ofappraisa!' i&ter&a! fai!ure' a&d e%ter&a! fai!ure#

A&swer ) is correct# re(e&tio& atte.pts to a(oiddefecti(e output# re(e&tio& costs i&c!ude pre(e&ti(e.ai&te&a&ce' e.p!o"ee trai&i&g' re(iew of euip.e&tdesig&' a&d e(a!uatio& of supp!iers# re(e&tio& is !esscost!" tha& detectio& a&d correctio& of defecti(eoutput#

A&swer C is i&correct +ecause pre(e&tio& isordi&ari!" !ess cost!" tha& the co.+i&ed costs of

appraisa!' i&ter&a! fai!ure' a&d e%ter&a! fai!ure#

A&swer , is i&correct +ecause pre(e&tio& isordi&ari!" !ess cost!" tha& the co.+i&ed costs ofappraisa!' i&ter&a! fai!ure' a&d e%ter&a! fai!ure#

[69] Source: CA 1197 -2;

A&swer A is i&correct +ecause other ua!it" co&tro!processes ca& a!so +e e%pe&si(e#

A&swer ) is i&correct +ecause rewori&g defecti(eite.s .a" +e possi+!e a!though cost!"#

A&swer C is i&correct +ecause &o ua!it" co&tro!

s"ste. wi!! +e 1008 effecti(e#

A&swer , is correct# The process used to producethe goods is &ot thorough!" re(iewed a&d e(a!uatedfor efficie&c" a&d effecti(e&ess# re(e&ti&g defectsa&d i&creasi&g efficie&c" +" i.pro(i&g the productio&process raises ua!it" sta&dards a&d decreases costs#

[40] Source: CA 079 -76

A&swer A is i&correct +ecause the perce&tage ofship.e&ts retur&ed .easures ua!it" +" the &u.+er ofdefecti(e u&its#

A&swer ) is correct# The &u.+er of parts shipped

per da" wou!d .ost !ie!" +e used as a .easure ofthe effecti(e&ess a&d efficie&c" of shippi&gprocedures' &ot the ua!it" of the product# This.easure does &ot co&sider how .a&" of the parts aredefecti(e#

A&swer C is i&correct +ecause the &u.+er ofdefecti(e parts per .i!!io& .easures ua!it" +" the&u.+er of defecti(e u&its#

A&swer , is i&correct +ecause the perce&tage ofproducts passi&g ua!it" tests the first ti.e .easuresua!it" +" the &u.+er of &o&defecti(e products#

[41] Source: CA 1197 -9;

A&swer A is correct# The i&de% for Ma" was 08['000 N 6'000 N 12'000 N 1'000 ・

90'000]' a&d the i&de% for Hu&e was 368 [7'000



N 7'000 N 17'000 N 11'000 ・100'000]#

A&swer ) is i&correct +ecause the i&de% decreased#

A&swer C is i&correct +ecause the i&crease i&pre(e&tio& costs was 108 of the i&crease i& !a+or

costs#

A&swer , is i&correct +ecause the decrease i&appraisa! costs was 108 of the i&crease i& !a+orcosts#

[42] Source: CA 1196 -2

A&swer A is correct# Tota! ua!it" .a&age.e&te.phasi/es ua!it" as a +asic orga&i/atio&a! fu&ctio&#T=M is the co&ti&uous pursuit of ua!it" i& e(er"aspect of orga&i/atio&a! acti(ities# &e of the +asicte&ets of T=M is doi&g it right the first ti.e# Thus'errors shou!d +e caught a&d corrected at the source#

A&swer ) is i&correct +ecause tota! ua!it".a&age.e&t e.phasi/es disco(eri&g errors

throughout the process' &ot i&spectio& of fi&ishedgoods#

A&swer C is i&correct +ecause a!! .e.+ers of theorga&i/atio& assu.e respo&si+i!it" for ua!it" of theproducts a&d ser(ices#

A&swer , is i&correct +ecause the tota! ua!it".a&age.e&t phi!osoph" reco..e&ds !i.iti&g the&u.+er of supp!iers to create a stro&g re!atio&ship#

[43] Source: CA 0796 -29

A&swer A is i&correct +ecause o&e of the 1 poi&tsreco..e&ds e!i.i&atio& of &u.erica! uotas# M)

causes aggressi(e pursuit of &u.erica! uotas#

A&swer ) is i&correct +ecause i&for.a! !ear&i&gfro. coworers ser(es to e&tre&ch +ad wor ha+its#&e of the 1 poi&ts stresses proper trai&i&g ofe(er"o&e#

A&swer C is i&correct +ecause a&other of the 1poi&ts states that ua!it" +" fi&a! i&spectio& isu&&ecessar" if ua!it" is +ui!t i& fro. the start#

A&swer , is correct# Accordi&g to .a&age.e&ttheorist *# $dwards ,e.i&g5s we!!-&ow& 1poi&ts' educatio& a&d se!f-i.pro(e.e&t are esse&tia!#I&ow!edge is opportu&it"# e&ce' co&ti&uousi.pro(e.e&t shou!d +e e(er"o&e5s pri.ar" career

o+>ecti(e#

[4] Source: CA 0796 -30

A&swer A is i&correct +ecause hierarcha!orga&i/atio& stif!es T=M#

A&swer ) is i&correct +ecause T=M wors +estwith tea.s of peop!e fro. differe&t specia!ties#

A&swer C is correct# T=M ad(ocates rep!ace.e&tof the traditio&a! hierarcha! structure with tea.s ofpeop!e fro. differe&t specia!ities# This cha&ge fo!!owsfro. T=M5s e.phasis o& e.poweri&g e.p!o"eesa&d tea.wor# $.p!o"ees shou!d ha(e proper

trai&i&g' &ecessar" i&for.atio&' a&d the +est too!s< +efu!!" e&gaged i& the decisio& process< a&d recei(e fairco.pe&satio&# f such e.powered e.p!o"ees areasse.+!ed i& tea.s of i&di(idua!s with the reuired

si!!s' T=M theorists +e!ie(e the" wi!! +e .oreeffecti(e tha& peop!e perfor.i&g their tassseparate!" i& a rigid structure#

A&swer , is i&correct +ecause tea.wor isesse&tia! for T=M#

[47] Source: CA 0796 -32

A&swer A is i&correct +ecause custo.ers arei&ter&a! as we!! as e%ter&a!#

A&swer ) is i&correct +ecause custo.ers arei&ter&a! as we!! as e%ter&a!#

A&swer C is correct# &e of the te&ets of T=M iscusto.er orie&tatio&' whether the custo.er is i&ter&a!or e%ter&a!# A& i&ter&a! custo.er is a .e.+er of theorga&i/atio& who re!ies o& a&other .e.+er5s wor toacco.p!ish hisEher tas#

A&swer , is i&correct +ecause custo.ers arei&ter&a! as we!! as e%ter&a!#

[46] Source: CA 1196 -23

A&swer A is correct# The i&te&t of ua!it" co&tro! isto e&sure that goods a&d ser(ices co&for. to thedesig& specificatio&s# *hether the focus is o&feedforward' feed+ac' or co&curre&t co&tro!' thee.phasis is o& e&suri&g product or ser(iceco&for.it"#

A&swer ) is i&correct +ecause ua!it" co&tro! isgeared towards satisf"i&g the custo.er' &ot upper.a&age.e&t#

A&swer C is i&correct +ecause e&suri&g the

co&for.a&ce with S-9000 specificatio&s is aco.po&e&t of a co.p!ia&ce audit' &ot ua!it" co&tro!#

A&swer , is i&correct +ecause deter.i&i&g theappropriate ti.i&g of i&spectio&s is o&!" o&e steptowards approachi&g ua!it" co&tro!# Co&seue&t!"' itis &ot the pri.ar" co.po&e&t of the ua!it" co&tro!fu&ctio&#

[44] Source: CA 0796 -20

A&swer A is i&correct +ecause co&ti&uousi.pro(e.e&t is i.porta&t for achie(i&g a&d.ai&tai&i&g high !e(e!s of perfor.a&ce#

A&swer ) is i&correct +ecause .ore a&d .ore.a&ufacturers are auto.ati&g to achie(e high ua!it"'de!i(er custo.i/ed products o& ti.e' .i&i.i/ei&(e&tor"' a&d i&crease f!e%i+i!it"#

A&swer C is correct# &&o(ati(e co.pa&ies arecusto.er dri(e&# )ecause custo.ers de.a&d e(er+etter ua!it" a&d co.petitors are atte.pti&g topro(ide that ua!it"' co&ti&uous i.pro(e.e&t ca!!edai/e& +" the Hapa&ese is esse&tia! for suchco.pa&ies# Thus' the f!ow of i&&o(ati(e products a&dser(ices .ust +e co&ti&uous# Si.p!" e.phasi/i&ge%isti&g products is &ot a& effecti(e strateg" for .ostorga&i/atio&s#

A&swer , is i&correct +ecause custo.er

satisfactio& is the highest priorit" accordi&g to .oder&.a&age.e&t practice#



[4;] Source: CA 1197 -66

A&swer A is i&correct +ecause +udgetar"co.pariso& is a t"pica! e%a.p!e of a .o&itori&gco&tro!#

A&swer ) is i&correct +ecause i&(estigatio& ofe%ceptio&s is a .o&itori&g co&tro! used +"!ower-!e(e! .a&age.e&t to deter.i&e whe& theiroperatio&s .a" +e out of co&tro!#

A&swer C is correct# Mo&itori&g assesses theua!it" of i&ter&a! co&tro! o(er ti.e# Ma&age.e&tco&siders whether i&ter&a! co&tro! is proper!"desig&ed a&d operati&g as i&te&ded a&d .odifies it toref!ect cha&gi&g co&ditio&s# Mo&itori&g .a" +e i& thefor. of separate' periodic e(a!uatio&s or of o&goi&g.o&itori&g# &goi&g .o&itori&g occurs as part ofrouti&e operatio&s# t i&c!udes .a&age.e&t a&dsuper(isor" re(iew' co.pariso&s' reco&ci!iatio&s' a&dother actio&s +" perso&&e! as part of their regu!aracti(ities# owe(er' reco&ci!i&g +atch co&tro! tota!s isa processi&g co&tro!#

A&swer , is i&correct +ecause i&ter&a! auditi&g is a

for. of .o&itori&g# t ser(es to e(a!uate.a&age.e&t5s other co&tro!s#


A&swer A is correct# &e of the .a>ordisad(a&tages of trait-t"pe perfor.a&ce appraisa!ssu+>ecti(e appraisa!s' or o&es that re!" o& a &u.+erof !ess precise .easures is their i&a+i!it" to .easureperfor.a&ce accurate!"# Correcti(e actio& istherefore difficu!t# f su+>ecti(e factors are i.porta&t'correctio& .a" &eed to +e .ore gradua!#

A&swer ) is i&correct +ecause the" are truestate.e&ts#

A&swer C is i&correct +ecause the" are truestate.e&ts#

A&swer , is i&correct +ecause the" are truestate.e&ts#

[;0] Source: CMA 1290 -4

A&swer A is i&correct +ecause the e%pected ti.e ofthe critica! path is 13#0 da"s#

A&swer ) is correct# The critica! path is the !o&gestpath# The !o&gest path i& the diagra. is A-,-$'which reuires 13 da"s 7#7 N 4#7 +ased o&

e%pected ti.es#

A&swer C is i&correct +ecause the e%pected ti.e ofthe critica! path is 13#0 da"s#

A&swer , is i&correct +ecause the e%pected ti.e ofthe critica! path is 13#0 da"s#

[;1] Source: CMA 1290 -;

A&swer A is correct# The critica! !o&gest path is A-,-$' which has a& e%pected ti.e of 13 da"s seeprecedi&g uestio&# owe(er' to decrease thepro>ect5s co.p!etio& ti.e +" 1#7 da"s' paths A-)-C-$ #7 N 1#0 N 6#7 O 12 da"s a&d A-)-,-$

#7 N #7 N 4#7 O 12#7 da"s as we!! as A-,-$ .usta!so +e shorte&ed# e&ce' A-,-$ .ust +e reduced+" 1#7 da"s' A-)-C-$ +" #7 da"' a&d A-)-,-$ +"1#0 da"# The o&!" wa" to decrease A-,-$ +" 1#7

da"s is to crash acti(it" A, 7#7 e%pected ti.e - #0crash ti.e O 1#7 da"s# Crashi&g ,$ resu!ts i& a1#0-da" sa(i&g 4#7 - 6#7 o&!"# Crashi&g A) is theefficie&t wa" to reduce +oth A-)-C-$ a&d A-)-,-$+" the desired a.ou&t of ti.e +ecause it is part of+oth paths# The i&cre.e&ta! cost of crashi&g A) is1'000 '000 crash cost - 3'000 &or.a! cost toshorte& the co.p!etio& ti.e +" 1#0 da" #7 - 3#7#The a!ter&ati(es for decreasi&g +oth A-)-C-$ a&d

A-)- ,-$ are .ore cost!"#

A&swer ) is i&correct +ecause crashi&g acti(it" ,$sa(es o&!" 1#0 da" 4#7 - 6#7 o& the critica! path a&ddoes &ot reduce the ti.e &eeded for A-)-C-$#

A&swer C is i&correct +ecause crashi&g A, does&ot reduce the ti.e &ecessar" to co.p!ete A-)-C-$or A-)-,-$#

A&swer , is i&correct +ecause A) a&d C$ are &oto& the critica! path#

[;2] Source: CA 07;6 -23

A&swer A is i&correct +ecause the pro>ect is aheadof schedu!e' +ut acti(it" , has &ot "et +ee& started'.uch !ess co.p!eted#

A&swer ) is correct# Assu.i&g that each of the+ars represe&ts the e%pected ti.e &ecessar" toco.p!ete a& acti(it" a&d that the shaded regio&sreprese&t the portio&s co.p!eted' it ca& +e see& thatacti(it" A has +ee& co.p!eted as schedu!ed a&dacti(ities ) a&d C are ahead of schedu!e# Therefore'the pro>ect is ahead of schedu!e#

A&swer C is i&correct +ecause the pro>ect is ahead

of schedu!e' +ut acti(it" , has &ot "et +ee& started'

.uch !ess co.p!eted#

A&swer , is i&correct +ecause the pro>ect is aheadof schedu!e' +ut acti(it" , has &ot "et +ee& started'.uch !ess co.p!eted#

[;3] Source: CMA 12;9 -3

A&swer A is i&correct +ecause the (o!u.e (aria&ceis &ot re!ated to direct !a+or#

A&swer ) is correct# The fi%ed o(erhead (o!u.e(aria&ce .easures the effect of &ot operati&g at the+udgeted de&o.i&ator acti(it" !e(e!# t is thediffere&ce +etwee& +udgeted fi%ed costs a&d the

product of the sta&dard fi%ed o(erhead app!icatio&rate a&d the sta&dard acti(it" !e(e! for the actua!output# A fa(ora+!e (aria&ce .ea&s that acti(it" wasgreater tha& e%pected a&d that fi%ed o(erhead waso(erapp!ied# t .ight +e caused +"' for e%a.p!e'hiri&g .ore worers to pro(ide a& e%tra shift# A&u&fa(ora+!e (o!u.e (aria&ce .ea&s that acti(it" was!ess tha& +udgeted o(erhead was u&derapp!ied' fore%a.p!e' +ecause of i&sufficie&t sa!es or a !a+orstrie# Accordi&g!"' the (o!u.e (aria&ce is usua!!"outside the co&tro! of productio& .a&age.e&t#Moreo(er' u&!ie other (aria&ces' it does &ot direct!"ref!ect a differe&ce +etwee& actua! a&d +udgetede%pe&diture of resources#

A&swer C is i&correct +ecause the (o!u.e (aria&ce

is &ot re!ated to o(erhead efficie&c"#

A&swer , is i&correct +ecause the (o!u.e (aria&ceis &ot re!ated to o(erhead use#



[;] Source: CMA 12;9 -6

A&swer A is correct# The (aria+!e o(erheadefficie&c" (aria&ce eua!s the product of the (aria+!eo(erhead app!icatio& rate a&d the differe&ce +etwee&the sta&dard i&put for the actua! output a&d the actua!i&put# e&ce' the (aria&ce wi!! +e /ero if (aria+!eo(erhead is app!ied o& the +asis of u&its of output+ecause the differe&ce +etwee& actua! a&d sta&dardi&put ca&&ot +e recog&i/ed#

A&swer ) is i&correct +ecause the (aria&ce wou!d+e /ero#

A&swer C is i&correct +ecause the (aria&ce wou!d+e /ero#

A&swer , is i&correct +ecause the corre!atio&+etwee& the (aria+!e o(erhead a&d direct !a+orefficie&c" (aria&ces occurs o&!" whe& o(erhead isapp!ied o& the +asis of direct !a+or#

[;7] Source: CA 1192 F-14

A&swer A is i&correct +ecause roduct A has thegreatest co&tri+utio& .argi& ratio 738' +ut a !owerCM per hour tha& )#

A&swer ) is correct# *he& resources are !i.ited'.a%i.u. profits are achie(ed +" .a%i.i/i&g thedo!!ar co&tri+utio& .argi& per !i.ited or co&strai&i&gfactor# & this situatio&' .achi&e hours are theco&strai&i&g factor# roduct ) has a co&tri+utio&.argi& per .achi&e hour of 2; [ % 1; - 11]'which is greater tha& that of roduct A [3 % 17 -4 O 2]' roduct C [2 % 20 - 10 O 20]' orroduct , [3 % 27 - 16 O 24]#

A&swer C is i&correct +ecause roduct C has agreater do!!ar u&it co&tri+utio& .argi& 10' +ut a!ower CM per hour tha& )#

A&swer , is i&correct +ecause roduct , has thegreatest se!!i&g price per u&it 27' +ut a !ower CMper hour tha& )#

[;6] Source: CMA 1292 3-17

A&swer A is i&correct +ecause 7 is the fi%edo(erhead app!icatio& rate#

A&swer ) is i&correct +ecause 27 is the fi%ed

o(erhead per !a+or hour#

A&swer C is i&correct +ecause 10 is the (aria+!eportio& of the o(erhead app!icatio& rate#

A&swer , is correct# The predeter.i&ed o(erheadapp!icatio& rate is 17 [1'200'000 B N2'00'000 F ・20'000 .achi&e hours]#

[;4] Source: CMA 1292 3-16

A&swer A is i&correct +ecause the tota! o(erheadapp!ied was 317'000 +ased o& 21'000 hours at17 per hour#

A&swer ) is correct# (erhead is app!ied o& the+asis of p!a&&ed .achi&e hours# The predeter.i&edo(erhead app!icatio& rate is 17 [1'200'000 BN 2'00'000 F ・20'000 .achi&e hours]#

Thus' tota! o(erhead app!ied was 317'000 17 %21'000 p!a&&ed .achi&e hours +ased o& output#

A&swer C is i&correct +ecause the tota! o(erheadapp!ied was 317'000 +ased o& 21'000 hours at17 per hour#

A&swer , is i&correct +ecause 300'000 is +asedo& p!a&&ed direct !a+or hours at 47 per hour#

[;;] Source: CMA 1292 3-14

A&swer A is i&correct +ecause the o(erhead wasu&derapp!ied#

A&swer ) is correct# Faria+!e o(erhead app!ied i&Do(e.+er was 210'000 [21'000 p!a&&ed .achi&ehours +ased o& output % 2'00'000 p!a&&ed a&&ua!F ・20'000 p!a&&ed .achi&e hours]# )ecausethe app!ied o(erhead was !ess tha& actua!21'000' u&derapp!ied (aria+!e o(erhead eua!ed'000#

A&swer C is i&correct +ecause the o(erhead was

u&derapp!ied#

A&swer , is i&correct +ecause 6'000 is +ased o&the 22'000 .achi&e hours p!a&&ed for Do(e.+errather tha& the p!a&&ed hours for actua! output#

[;9] Source: CMA 1292 3-1;

A&swer A is correct# The (aria+!e o(erheadspe&di&g (aria&ce eua!s the differe&ce +etwee&actua! (aria+!e o(erhead a&d the product of the actua!i&put a&d the +udgeted app!icatio& rate# At a (aria+!eo(erhead app!icatio& rate sta&dard cost of 10 per.achi&e hour 2'00'000 ・20'000 hours' thetota! sta&dard cost for the 21'600 actua! hours was

216'000# Gi(e& actua! costs of 21'000' thefa(ora+!e (aria&ce is 2'000#

A&swer ) is i&correct +ecause 6'000 is +ased o&p!a&&ed .achi&e hours of 22'000#

A&swer C is i&correct +ecause the (aria&ce isfa(ora+!e#

A&swer , is i&correct +ecause the (aria&ce isfa(ora+!e#

[90] Source: CMA 1292 3-19

A&swer A is i&correct +ecause the (aria&ce was

fa(ora+!e#

A&swer ) is i&correct +ecause the (aria&ce wasfa(ora+!e#

A&swer C is i&correct +ecause 10'000 is +asedo& 22'000 p!a&&ed .achi&e hours#

A&swer , is correct# The fi%ed o(erhead (o!u.eid!e capacit" (aria&ce is the differe&ce +etwee&+udgeted fi%ed costs a&d the product of the sta&dardfi%ed o(erhead cost per u&it of i&put a&d the sta&dardu&its of i&put a!!owed for the actua! output# )udgetedfi%ed costs for the .o&th were 100'000# Thesta&dard cost of actua! output was 107'000[21'000 .achi&e hours p!a&&ed for actua! output %

1'200'000 p!a&&ed a&&ua! B ・20'000p!a&&ed a&&ua! .achi&e hours B app!icatio&rate]# e&ce' the fi%ed o(erhead (o!u.e (aria&cewas 7'000 fa(ora+!e# t was fa(ora+!e +ecause the



+udget for fi%ed o(erhead was !ess tha& the a.ou&tapp!ied to >o+s# A& o(erapp!icatio& of fi%ed o(erheadsuggests that output e%ceeded e%pectatio&s#

[91] Source: CMA 0693 3-17

A&swer A is i&correct +ecause there is &o .ateria!s(aria&ce< the actua! cost was eua! to the +udgetedcost for .ateria!s#

A&swer ) is i&correct +ecause &o !a+or efficie&c"(aria&ce occurred# )udgeted hours were ide&tica! toactua! hours for ;'700 u&its#

A&swer C is i&correct +ecause &o !a+or efficie&c"(aria&ce occurred# )udgeted hours were ide&tica! toactua! hours for ;'700 u&its#

A&swer , is correct# The sta&dard cost of .ateria!sfor ;'700 u&its is 124'700 ;'700 % 17# Thus' &o(aria&ce arose with respect to .ateria!s# )ecause!a+or for 9'000 u&its was +udgeted at ;1'000' theu&it !a+or cost is 9# Thus' the !a+or +udget for ;'700u&its is 46'700' a&d the tota! !a+or (aria&ce is

1'247 44'447 - 46'700# )ecause the actua!cost is greater tha& the +udgeted a.ou&ts' the1'247 (aria&ce is u&fa(ora+!e# Gi(e& that the actua!ti.e per u&it 7 .i&utes was the sa.e as that+udgeted' &o !a+or efficie&c" (aria&ce was i&curred#e&ce' the e&tire 1'247 u&fa(ora+!e (aria&ce .ust+e attri+uta+!e to the !a+or rate or price (aria&ce#

[92] Source: CMA 0693 3-16

A&swer A is i&correct +ecause the tota! f!e%i+!e+udget (aria&ce i&c!udes ite.s other tha& re(e&ue#

A&swer ) is i&correct +ecause the sa!es (o!u.e(aria&ce represe&ts the cha&ge i& co&tri+utio& .argi&

caused +" a differe&ce +etwee& actua! a&d +udgetedu&its so!d# owe(er' gi(e& a f!e%i+!e +udget' there is&o differe&ce +etwee& +udgeted a&d actua! u&its so!d#)" defi&itio&' a f!e%i+!e +udget5s (o!u.e is ide&tica! toactua! (o!u.e#

A&swer C is i&correct +ecause the tota! static+udget (aria&ce i&c!udes .a&" ite.s other tha&re(e&ue#

A&swer , is correct# Faria&ce a&a!"sis ca& +e usedto >udge the effecti(e&ess of se!!i&g depart.e&ts# f afir.5s sa!es differ fro. the a.ou&t +udgeted' thediffere&ce .a" +e attri+uta+!e to either the sa!es price(aria&ce or the sa!es (o!u.e ua&tit" (aria&ce#Cha&ges i& u&it se!!i&g prices .a" accou&t for the

e&tire (aria&ce if the actua! ua&tit" so!d is eua! tothe ua&tit" +udgeted# Do&e of the re(e&ue (aria&ceis attri+uted to the sa!es (o!u.e (aria&ce +ecause &osuch (aria&ce e%ists whe& a f!e%i+!e +udget is used#The f!e%i+!e +udget is +ased o& the !e(e! of sa!es atactua! (o!u.e#

[93] Source: CMA 0693 3-19

A&swer A is i&correct +ecause the (aria&ces arefa(ora+!e#

A&swer ) is i&correct +ecause 100 direct !a+orhours are eui(a!e&t to the spe&di&g (aria&ce 20 %100 hours O 2'000#

A&swer C is i&correct +ecause the (aria&ces arefa(ora+!e#

A&swer , is correct# The (aria+!e o(erheadspe&di&g a&d efficie&c" (aria&ces are the co.po&e&tsof the tota! (aria+!e o(erhead (aria&ce# Gi(e& thatactua! (aria+!e o(erhead was ;0'000 a&d thef!e%i+!e +udget a.ou&t was 90'000' the tota!(aria&ce is 10'000 fa(ora+!e# f the o(erheadspe&di&g (aria&ce is 2'000 fa(ora+!e the efficie&c"(aria&ce .ust +e ;'000 fa(ora+!e 10'000 tota! -2'000 spe&di&g# At a rate of 20 per hour' this(aria&ce is eui(a!e&t to 00 direct !a+or hours;'000 ・20#

[9] Source: CMA 0693 3-20

A&swer A is i&correct +ecause efficie&c" (aria&cesare app!ica+!e to (aria+!e costs#

A&swer ) is i&correct +ecause efficie&c" (aria&cesare app!ica+!e to (aria+!e costs#

A&swer C is i&correct +ecause efficie&c" (aria&cesare app!ica+!e to (aria+!e costs#

A&swer , is correct# Faria+!e o(erhead (aria&ces

ca& +e su+di(ided i&to spe&di&g a&d efficie&c"co.po&e&ts# owe(er' fi%ed o(erhead (aria&ces do&ot ha(e a& efficie&c" co.po&e&t +ecause fi%edcosts' +" defi&itio&' are &ot re!ated to cha&gi&g !e(e!sof output# Co&seue&t!"' there is &o co&cept ofefficie&c" with respect to the i&curre&ce of fi%edcosts# Bi%ed o(erhead (aria&ces are t"pica!!"su+di(ided i&to a +udget or fi%ed o(erheadspe&di&g (aria&ce a&d a (o!u.e (aria&ce#

[97] Source: CMA 0693 3-26

A&swer A is i&correct +ecause a& u&fa(ora+!e.ateria!s ua&tit" (aria&ce affects productio&.a&age.e&t a&d possi+!" the purchasi&g fu&ctio&# t

.a" i&dicate a& i&efficie&t use of .ateria!s or the useof poor ua!it" .ateria!s#

A&swer ) is i&correct +ecause a& u&fa(ora+!e !a+orefficie&c" (aria&ce ref!ects upo& productio& worerswho ha(e used too .a&" hours#

A&swer C is i&correct +ecause a fa(ora+!e !a+orrate (aria&ce re!ated to hiri&g is a co&cer& of theperso&&e! fu&ctio&# The fa(ora+!e rate (aria&ce .ight+e .ore tha& offset +" a& u&fa(ora+!e !a+or efficie&c"(aria&ce or a .ateria!s ua&tit" (aria&ce if wasteoccurred#

A&swer , is correct# Most (aria&ces are ofsig&ifica&ce to so.eo&e who is respo&si+!e for that

(aria&ce# owe(er' a fi%ed o(erhead (o!u.e(aria&ce is ofte& &ot the respo&si+i!it" of a&"o&e othertha& top .a&age.e&t# The fi%ed o(erhead (o!u.e(aria&ce eua!s the differe&ce +etwee& +udgetedfi%ed o(erhead a&d the a.ou&t app!ied sta&dard rate% sta&dard i&put a!!owed for the actua! output# t ca&+e caused +" eco&o.ic dow&tur&s' !a+or strife' +adweather' or a cha&ge i& p!a&&ed output# Thus' a fi%edo(erhead (o!u.e (aria&ce resu!ti&g fro. a top.a&age.e&t decisio& to reduce output has fewer+eha(iora! i.p!icatio&s tha& other (aria&ces#

[96] Source: CMA 1293 3-22

A&swer A is i&correct +ecause the u&it sta&dard

cost is 2#70#

A&swer ) is correct# Gi(e& that the co.pa&"produced 12'000 u&its with a tota! sta&dard cost for



.ateria!s of 60'000' the sta&dard cost .ust +e7#00 60'000 ・12'000 u&its per u&it of fi&ishedproduct# )ecause each u&it of fi&ished productreuires two u&its of raw .ateria!s' the sta&dard u&itcost for raw .ateria!s .ust +e 2#70#

A&swer C is i&correct +ecause 3 is the actua! costper u&it of raw .ateria!s#

A&swer , is i&correct +ecause 7 is the tota!sta&dard cost of raw .ateria!s for each u&it offi&ished product#

[94] Source: CMA 1293 3-23

A&swer A is i&correct +ecause 12'000 u&its is the&u.+er of u&its of fi&ished product#

A&swer ) is i&correct +ecause 12'700 u&itsassu.es that each u&it of fi&ished product i&c!udeso&!" o&e u&it of raw .ateria!s#

A&swer C is i&correct +ecause 23'000 u&itsassu.es a fa(ora+!e ua&tit" (aria&ce#

A&swer , is correct# The co.pa&" produced12'000 u&its of output' each of which reuired twou&its of raw .ateria!s# Thus' the sta&dard i&puta!!owed for raw .ateria!s was 2'000 u&its at asta&dard cost of 2#70 each# A& u&fa(ora+!e ua&tit"(aria&ce sig&ifies that the actua! ua&tit" used wasgreater tha& the sta&dard i&put a!!owed# The .ateria!sua&tit" (aria&ce eua!s the differe&ce +etwee& actua!a&d sta&dard ua&tities' ti.es the sta&dard price peru&it# Co&seue&t!"' si&ce 1'000 2'700@ ・2#70additio&a! u&its were used' the actua! tota! ua&tit".ust ha(e +ee& 27'000 u&its 2'000 sta&dard N1'000#

[9;] Source: CMA 1293 3-2

A&swer A is i&correct +ecause 2'700 u&fa(ora+!eis the .ateria!s ua&tit" (aria&ce#

A&swer ) is i&correct +ecause the price (aria&ce is12'700' or #70 per u&it#

A&swer C is correct# The price (aria&ce eua!sactua! ua&tit" ti.es the differe&ce +etwee& the actua!a&d sta&dard prices# Actua! usage a&d the sta&dardprice were 27'000 u&its a&d 2#70' respecti(e!"# Actua! price was 3#00 107'000 tota! cost ・

37'000 u&its purchased# Co&seue&t!"' the .ateria!sprice (aria&ce is 12'700 u&fa(ora+!e [3#00 -2#70 % 27'000 u&its]#

A&swer , is i&correct +ecause the price (aria&ce is12'700' or #70 per u&it#

[99] Source: CMA 1293 3-27

A&swer A is i&correct +ecause ;7'000 fa(ora+!eis +ased o& a productio& !e(e! of 100'000 u&its#

A&swer ) is i&correct +ecause the (aria&ce isfa(ora+!e#

A&swer C is correct# The co.pa&" p!a&&ed toproduce 100'000 u&its at 6 each (aria+!e N 2fi%ed cost' or a tota! of 600'000' co&sisti&g of

00'000 of (aria+!e costs a&d 200'000 of fi%edcosts# Tota! productio& was o&!" ;0'000 u&its at atota! cost of 717'000# The f!e%i+!e +udget for aproductio& !e(e! of ;0'000 u&its i&c!udes (aria+!e

costs of 320'000 % ;0'000 u&its# Bi%ed costswou!d re.ai& at 200'000# Thus' the tota! f!e%i+!e+udget costs are 720'000# Gi(e& that actua! costswere o&!" 717'000' the (aria&ce is 7'000fa(ora+!e#

A&swer , is i&correct +ecause the (aria&ce isfa(ora+!e#

[100] Source: CA 0792 F-1;

A&swer A is i&correct +ecause the direct !a+or rate(aria&ce is 100 B ;'700 - ;'600#

A&swer ) is correct# The tota! f!e%i+!e +udget direct!a+or (aria&ce eua!s the differe&ce +etwee& tota!actua! direct !a+or cost a&d sta&dard direct !a+or coststa&dard rate % sta&dard hours a!!owed for theactua! output# t co.+i&es the direct !a+or rate a&defficie&c" (aria&ces# Bor this co.pa&"' the (aria&ce is1'900 @ ;'700 actua! wages at actua! hours -6'600 sta&dard wages at sta&dard hours#

A&swer C is i&correct +ecause the tota! !a+or

(aria&ce is u&fa(ora+!e#

A&swer , is i&correct +ecause the direct !a+orefficie&c" (aria&ce is 2'000 @#

[101] Source: CA 0793 F-1

A&swer A is i&correct +ecause +udgeted' &otactua!' @CM is used to ca!cu!ate this (aria&ce#

A&swer ) is i&correct +ecause the f!e%i+!e +udget(o!u.e is the actua! (o!u.e' resu!ti&g i& a /ero(aria&ce#

A&swer C is i&correct +ecause +udgeted' &ot

actua!' @CM is used to ca!cu!ate this (aria&ce#

A&swer , is correct# Bor a si&g!e-productco.pa&"' the sa!es (o!u.e (aria&ce is the differe&ce+etwee& the actua! a&d +udgeted sa!es ua&titiesti.es the +udgeted @CM# f the co.pa&" se!!s twoor .ore products' the differe&ce +etwee& the actua!a&d +udgeted product .i%es .ust +e co&sidered# &that case' the sa!es (o!u.e (aria&ce eua!s thediffere&ce +etwee& 1 actua! tota! u&it sa!es ti.es the+udgeted weighted-a(erage @CM for the actua! .i%a&d 2 +udgeted tota! u&it sa!es ti.es the +udgetedweighted-a(erage @CM for the p!a&&ed .i%#


A&swer A is i&correct +ecause 29 fa(ora+!e isthe .ateria!s ua&tit" (aria&ce#

A&swer ) is correct# The .ateria!s .i% (aria&ceeua!s the actua! tota! ua&tit" used ti.es thediffere&ce +etwee& the +udgeted weighted-a(eragesta&dard u&it cost for the +udgeted .i% a&d the+udgeted weighted-a(erage sta&dard u&it cost for theactua! .i%# This (aria&ce is fa(ora+!e if the sta&dardweighted-a(erage cost for the actua! .i% is !ess tha&the sta&dard weighted-a(erage cost for the +udgeted.i%# The sta&dard .i% weighted-a(erage sta&dardu&it cost is #227 per !iter 137 sta&dard tota! cost ・

600 !iters# The sta&dard cost of the actua! ua&tit"used was 1;'606 see +e!ow# Thus' the actua! .i%

weighted-a(erage sta&dard u&it cost was #22039;1;'606 ・;'20 !iters used' a&d the .i% (aria&cewas 3;;#70 fa(ora+!e [#22039; - #227 %;'20 !iters]#



#200 % 26'600 O 7'320#00 #27 % 12';;0 O 7'4#00 #170 % 34';00 O 7'640#00 #300 % 4'10 O 2'12#00 ---------- 1;'606#00 OOOOOOOOOO

A&swer C is i&correct +ecause 9#70 u&fa(ora+!eis the .ateria!s "ie!d (aria&ce#

A&swer , is i&correct +ecause 219#70 fa(ora+!eis +ased o& the actua! .i% of purchases#


A&swer A is i&correct +ecause 29#70 fa(ora+!eis the .ateria!s ua&tit" (aria&ce#

A&swer ) is i&correct +ecause 3;;#70 fa(ora+!eis the .ateria!s .i% (aria&ce#

A&swer C is correct# The .ateria!s "ie!d (aria&ce

eua!s the differe&ce +etwee& the actua! i&put a&d thesta&dard i&put a!!owed for the actua! output' ti.es the+udgeted weighted-a(erage sta&dard cost per i&putu&it at the sta&dard .i%# The sta&dard i&put for theactua! output was ;'000 !iters 10 +atches % 600!iters per +atch# The sta&dard .i% +udgetedweighted-a(erage sta&dard u&it cost is #227 per !iter137 tota! cost ・600 !iters# Thus' the "ie!d(aria&ce is 9#70 u&fa(ora+!e [;'20 !iters used -;'000 !iters a!!owed % #227]#

A&swer , is i&correct +ecause 219#70 fa(ora+!eis +ased o& the actua! .i% of purchases#


A&swer A is i&correct +ecause this euatio& defi&esthe sa!es .i% (aria&ce#

A&swer ) is correct# The sa!es (o!u.e (aria&ceeua!s the differe&ce +etwee& the f!e%i+!e +udgetco&tri+utio& .argi& for the actua! (o!u.e a&d thati&c!uded i& the .aster +udget# ts co.po&e&ts are thesa!es ua&tit" a&d sa!es .i% (aria&ces# The sa!esua&tit" (aria&ce focuses o& the fir.5s aggregateresu!ts# t assu.es a co&sta&t product .i% a&d a&a(erage co&tri+utio& .argi& for the co.posite u&it# teua!s the differe&ce +etwee& actua! a&d +udgetedu&it tota! sa!es' ti.es the +udgeted weighted-a(erage@CM for the p!a&&ed .i%#

A&swer C is i&correct +ecause this euatio& defi&esthe .aret si/e (aria&ce#

A&swer , is i&correct +ecause this euatio& defi&esthe .aret share (aria&ce#


A&swer A is correct# The sa!es .i% (aria&ce .a"+e (iewed as a su. of (aria&ces# Bor each product i&the .i%' the differe&ce +etwee& actua! u&its so!d a&dits +udgeted perce&tage of the actua! tota! u&it sa!es is.u!tip!ied +" the +udgeted @CM for the product#The resu!ts are added to deter.i&e the .i% (aria&ce# A& a!ter&ati(e is to .u!tip!" tota! actua! u&its so!d +"

the differe&ce +etwee& the +udgetedweighted-a(erage @CM for the p!a&&ed .i% a&d thatfor the actua! .i%#

A&swer ) is i&correct +ecause this euatio& defi&esthe sa!es ua&tit" (aria&ce#





A&swer ) is i&correct +ecause this euatio& defi&esthe sa!es ua&tit" (aria&ce#

A&swer C is correct# The co.po&e&ts of the sa!esua&tit" (aria&ce are the .aret si/e (aria&ce a&d the.aret share (aria&ce# The .aret si/e (aria&cegi(es a& i&dicatio& of the cha&ge i& co&tri+utio&.argi& caused +" a cha&ge i& the .aret si/e# The.aret si/e a&d .aret share (aria&ces are re!e(a&tto i&dustries i& which tota! !e(e! of sa!es a&d .aret

share are &ow&' e#g#' the auto.o+i!e i&dustr"# The.aret si/e (aria&ce .easures the effect of cha&gesi& a& i&dustr"5s sa!es o& a& i&di(idua! co.pa&"' a&dthe .aret share (aria&ce a&a!"/es the i.pact of acha&ge i& .aret share#




A&swer ) is i&correct +ecause this euatio& defi&es

the sa!es ua&tit" (aria&ce#


A&swer , is correct# The .aret share (aria&cegi(es a& i&dicatio& of the a.ou&t of co&tri+utio&.argi& gai&ed forgo&e +ecause of a cha&ge i& the.aret share#


A&swer A is i&correct +ecause the u&fa(ora+!e ,Mua&tit" (aria&ce shou!d +e a de+it#

A&swer ) is i&correct +ecause the u&fa(ora+!e ,Mprice a&d ua&tit" (aria&ces shou!d +e de+its#

A&swer C is correct# The e&tr" to record direct.ateria!s used is to de+it * at sta&dard prices a&dsta&dard ua&tities 70 u&its % 9 O '070# & thisuestio&' a!! direct .ateria!s (aria&ces are recordedat the ti.e * is charged# The .ateria!s price(aria&ce a&d the .ateria!s ua&tit" (aria&ce .ust +eca!cu!ated# The pro>ect used .ore u&its at a higherprice tha& esti.ated' so +oth (aria&ces wi!! +eu&fa(ora+!e de+its# The .ateria!s ua&tit" (aria&ceis 70 @ [700 - 70 % 9]# The .ateria!s price(aria&ce is 700 @ [700 u&its % 10 - 9]#&(e&tor" is credited for the actua! prices a&d actua!ua&tities 700 % 10 O 7'000#

A&swer , is i&correct +ecause this e&tr" fai!s torecord the (aria&ces#




A&swer A is correct# The e&tr" to record accruedpa"ro!! is to charge * at the sta&dard wage rateti.es the sta&dard &u.+er of hours a&d to creditaccrued pa"ro!! for the actua! pa"ro!! do!!ar a.ou&t#The pro>ect reuired .ore hours +ut a !ower wagerate tha& esti.ated# e&ce' the !a+or efficie&c"(aria&ce wi!! +e u&fa(ora+!e a de+it< the !a+or price(aria&ce wi!! +e fa(ora+!e a credit#

Ka+or eff# (ar# 70 - 7 % 12 O 60 @ Ka+or price (ar# 12 - 10 % 70 O 100 B

A&swer ) is i&correct +ecause this e&tr" o.its theprice (aria&ce a&d fai!s to i&(e&tor" the !a+or costs#

A&swer C is i&correct +ecause this e&tr" wou!d +ethe proper e&tr" if the hour!" rate were greater tha&esti.ated' +ut hours wored were !ess#

A&swer , is i&correct +ecause the !a+or (aria&ces.ust +e recog&i/ed#


A&swer A is i&correct +ecause this e&tr" assu.esthe price (aria&ce is &ot recorded at ti.e ofpurchase#

A&swer ) is correct# The e&tr" at the ti.e ofpurchase is to charge i&(e&tor" for 720' which is theactua! ua&tit" purchased 670 ・7 per u&it O 130u&its ti.es the sta&dard u&it price # Accou&tspa"a+!e is credited for 670 actua! ua&tit" % actua!price# The differe&ce +etwee& the actua! a&dsta&dard prices is the price (aria&ce# )ecause theactua! price e%ceeded the sta&dard' the price

(aria&ce is de+ited for the differe&ce# The price(aria&ce is 130 [130 u&its % 7 - ] u&fa(ora+!e#

A&swer C is i&correct +ecause the (aria&ce shou!d+e charged to a separate accou&t' &ot *#

A&swer , is i&correct +ecause .ateria!s shou!d +ede+ited to i&(e&tor"#


A&swer A is i&correct +ecause actua! i&directproductio& costs are de+ited to E co&tro!#

A&swer ) is i&correct +ecause E app!icatio& is

usua!!" +ased o& sta&dard rates a&d a gi(e& acti(it"+ase' &ot a.ou&ts actua!!" i&curred# E is app!ied+" crediti&g E co&tro! or a separate app!ied Eaccou&t a&d de+iti&g *#

A&swer C is correct# The e&tr" to record actua!(aria+!e E i&curred 7 % 730 hours O 2'670 isto charge the (aria+!e E co&tro! accou&t# Acorrespo&di&g credit is .ade to accou&ts pa"a+!e ora&" other appropriate accou&t#

A&swer , is i&correct +ecause the (aria+!e E isde+ited to (aria+!e E co&tro!' &ot (aria+!e Eapp!ied#


A&swer A is correct# The e&tr" to record theapp!icatio& of (aria+!e E is to charge the *

accou&t a&d e&ter a correspo&di&g credit to the(aria+!e E app!ied accou&t for the a.ou&t of Eco.puted usi&g the predeter.i&ed E rate 730 %#70 O 2'3;7#

A&swer ) is i&correct +ecause E co&tro! isde+ited for E i&curred#

A&swer C is i&correct +ecause the E app!icatio&is at #70' &ot 7#00' per hour#

A&swer , is i&correct +ecause the goods to whichthese costs app!" are i& process#


A&swer A is i&correct +ecause the (aria&ce is ade+it to a spe&di&g (aria&ce accou&t' &ot a credit to a(aria&ce su..ar"#

A&swer ) is correct# The spe&di&g (aria&ce isrecog&i/ed +" a de+it' gi(e& that .ore was spe&t forthat acti(it" tha& was esti.ated# The e&tr" to recordthe u&fa(ora+!e (aria+!e E spe&di&g (aria&ce is to

charge the (aria+!e E spe&di&g (aria&ce accou&tfor the appropriate a.ou&t# The (aria+!e E app!iedaccou&t is charged for its +a!a&ce# The (aria+!e Eco&tro! accou&t is credited for its +a!a&ce# Thesee&tries wi!! resu!t i& a /ero +a!a&ce i& +oth the app!ieda&d the co&tro! accou&ts assu.i&g that &o (aria+!eE efficie&c" (aria&ce e%isted#

A&swer C is i&correct +ecause the (aria&ce is aspe&di&g (aria&ce resu!ti&g fro. the e%cess of a&actua! cost o(er a sta&dard cost' &ot a& efficie&c"(aria&ce#

A&swer , is i&correct +ecause (aria+!e Eapp!ied is de+ited a&d (aria+!e E co&tro! iscredited to c!ose out the accou&ts#


A&swer A is i&correct +ecause the &or.a! +a!a&cesi& the E app!ied a&d E co&tro! accou&ts are acredit a&d a de+it' respecti(e!"# e&ce' the c!osi&ge&tries .ust +e the re(erse#

A&swer ) is i&correct +ecause the fi%ed Eapp!ied accou&t .ust +e c!osed with a de+it e&tr"#

A&swer C is i&correct +ecause this e&tr" does &otc!ose the E accou&ts#

A&swer , is correct# The e&tr" is to de+it fi%ed

E app!ied a&d credit fi%ed E co&tro! for theirrespecti(e +a!a&ces# The differe&ce is attri+uta+!eso!e!" to the productio& (o!u.e (aria&ce +ecause the+udget spe&di&g (aria&ce is /ero actua! fi%edfactor" E O the +udgeted a.ou&t# The (o!u.e(aria&ce is u&fa(ora+!e +ecause fi%ed E isu&derapp!ied# The u&derapp!icatio& the u&fa(ora+!e(o!u.e (aria&ce de+ited is 2'700 [32'700+udgeted fi%ed factor" E - 2'000 hours % 17 perhour]#

[117] Source: CMA 069 3-19

A&swer A is i&correct +ecause +udgetar"accou&ta&ts are i&(o!(ed i& the setti&g of sta&dard

costs#

A&swer ) is i&correct +ecause i&dustria! e&gi&eersare i&(o!(ed i& the setti&g of sta&dard costs#



A&swer C is correct# A sta&dard cost is a& esti.ateof what a cost shou!d +e u&der &or.a! operati&gco&ditio&s +ased o& studies +" accou&ta&ts a&de&gi&eers# & additio&' !i&e .a&age.e&t is usua!!"i&(o!(ed i& the setti&g of sta&dard costs as are ua!it"co&tro! perso&&e!# Top .a&age.e&t wou!d &ot +ei&(o!(ed +ecause cost esti.atio& is a !ower !e(e!operati&g acti(it"# articipatio& +" affectede.p!o"ees i& a!! co&tro! s"ste.s per.its a!!co&cer&ed to u&dersta&d +oth perfor.a&ce !e(e!sdesired a&d the .easure.e&t criteria +ei&g app!ied#

A&swer , is i&correct +ecause ua!it" co&tro!perso&&e! are i&(o!(ed i& the setti&g of sta&dardcosts#

[116] Source: CMA 069 3-21

A&swer A is correct# The .ateria!s efficie&c"(aria&ce is the differe&ce +etwee& actua! a&dsta&dard ua&tities used i& productio&' ti.es thesta&dard price# A& u&fa(ora+!e .ateria!s efficie&c"(aria&ce is usua!!" caused +" wastage' shri&age' or

theft# Thus' it .a" +e the respo&si+i!it" of theproductio& depart.e&t +ecause e%cess usage wou!doccur whi!e the .ateria!s are i& that depart.e&t#Si.i!ar!"' i&dustria! e&gi&eeri&g .a" p!a" a ro!e+ecause it is respo&si+!e for desig& of the productio&process#

A&swer ) is i&correct +ecause purchasi&g rare!"ca& co&tro! the .ateria!s efficie&c" (aria&ce#

A&swer C is i&correct +ecause sa!es has &o effecto& the .ateria!s efficie&c" (aria&ce#

A&swer , is i&correct +ecause sa!es has &o effecto& the .ateria!s efficie&c" (aria&ce#

[114] Source: CMA 069 3-22

A&swer A is correct# The !a+or price rate(aria&ce is the differe&ce +etwee& the actua! rate paida&d the sta&dard rate' ti.es the actua! hours# Thisdiffere&ce .a" +e attri+uta+!e to a cha&ge i& !a+orrates si&ce the esta+!ish.e&t of the sta&dards' usi&g asi&g!e a(erage sta&dard rate despite differe&t ratesear&ed a.o&g differe&t e.p!o"ees' assig&i&ghigher-paid worers to >o+s esti.ated to reuire!ower-paid worers or (ice (ersa' or pa"i&g hour!"rates' +ut +asi&g sta&dards o& piecewor rates or(ice (ersa# The differe&ce shou!d &ot +e caused +" au&io& co&tract appro(ed +efore the +udgeti&g c"c!e+ecause such rates wou!d ha(e +ee& i&corporated

i&to the sta&dards#

A&swer ) is i&correct +ecause predictio&s a+out!a+or rates .a" ha(e +ee& i&accurate#

A&swer C is i&correct +ecause usi&g a si&g!ea(erage sta&dard rate .a" !ead to (aria&ces if so.eworers are paid .ore tha& others a&d theproportio&s of hours wored differ fro. esti.ates#

A&swer , is i&correct +ecause assig&i&g higher paida&d higher si!!ed worers to >o+s &ot reuiri&gsuch si!!s wou!d !ead to a& u&fa(ora+!e (aria&ce#

[11;] Source: CMA 069 3-23

A&swer A is i&correct +ecause .achi&e efficie&c"pro+!e.s wou!d &ot e%p!ai& the price (aria&ce#

A&swer ) is i&correct +ecause a cha&ge i& product.i% wou!d &ot e%p!ai& the price (aria&ce#

A&swer C is i&correct +ecause .ateria!s of highertha& sta&dard ua!it" wou!d .ore !ie!" cause a&u&fa(ora+!e price (aria&ce a&d a fa(ora+!e ua&tit"(aria&ce#

A&swer , is correct# A fa(ora+!e .ateria!s price(aria&ce is the resu!t of pa"i&g !ess tha& the sta&dardprice for .ateria!s# A& u&fa(ora+!e .ateria!s usage(aria&ce is the resu!t of usi&g a& e%cessi(e ua&tit" of.ateria!s# f a purchasi&g .a&ager were to +u"su+sta&dard .ateria!s to achie(e a fa(ora+!e price(aria&ce' a& u&fa(ora+!e ua&tit" (aria&ce cou!dresu!t fro. usi&g a& e%cessi(e a.ou&t of poor ua!it".ateria!s#

[119] Source: CMA 129 3-2

A&swer A is i&correct +ecause &o (aria&ce re!atesua&tit" purchased to ua&tit" used#

A&swer ) is i&correct +ecause &o (aria&ce re!ates

ua&tit" purchased to ua&tit" used#

A&swer C is correct# The .ateria!s price (aria&ce.a" +e iso!ated at the ti.e of purchase or at the ti.eof tra&sfer to productio&# t eua!s the actua! ua&tit"of .ateria!s purchased or tra&sferred ti.es thediffere&ce +etwee& the actua! a&d sta&dard u&itprices# e&ce' a fa(ora+!e .ateria!s price (aria&ce.ea&s that .ateria!s were purchased at a price !esstha& the sta&dard price#

A&swer , is i&correct +ecause the u&fa(ora+!eua&tit" (aria&ce i&dicates that .ore .ateria!s wereused tha& a!!owed +" the sta&dards# The .ateria!sua&tit" (aria&ce eua!s the sta&dard u&it price ti.esthe differe&ce +etwee& the actua! ua&tit" used a&d

the sta&dard ua&tit" a!!owed for the actua! output#

[120] Source: CMA 129 3-27

A&swer A is i&correct +ecause the (aria+!eo(erhead spe&di&g (aria&ce .a" +e affected +"' +utdoes &ot affect' a direct !a+or efficie&c" (aria&ce# teua!s the differe&ce +etwee& actua! (aria+!eo(erhead' which i&c!udes i&direct +ut &ot direct !a+or'a&d the (aria+!e o(erhead app!ied +ased o& thesta&dard rate a&d the actua! acti(it" !e(e!' which .a"or .a" &ot +e .easured i& direct !a+or hours# Thus'the effect of a& u&fa(ora+!e direct !a+or efficie&c"(aria&ce is to decrease a& u&fa(ora+!e (aria+!eo(erhead spe&di&g (aria&ce or to i&crease a

fa(ora+!e (aria+!e o(erhead spe&di&g (aria&ce#

A&swer ) is correct# A& u&fa(ora+!e direct !a+orefficie&c" (aria&ce i&dicates that actua! hourse%ceeded sta&dard hours# Too .a&" hours .a" ha(e+ee& used +ecause of i&efficie&c" o& the part ofe.p!o"ees' e%cessi(e coffee +reas' .achi&edow&-ti.e' i&adeuate raw .ateria!s' or .ateria!s ofpoor ua!it" that reuired e%cessi(e rewor# A&u&fa(ora+!e .ateria!s usage (aria&ce .ight +e re!atedto a& u&fa(ora+!e !a+or efficie&c" (aria&ce# *ori&go& a greater ua&tit" of raw .ateria!s .a" reuire.ore direct !a+or ti.e#

A&swer C is i&correct +ecause the fi%ed o(erhead(o!u.e (aria&ce does &ot affect' a&d is &ot affected

+"' a direct !a+or efficie&c" (aria&ce# t eua!s thediffere&ce +etwee& +udgeted fi%ed o(erhead a&d thefi%ed o(erhead app!ied +ased o& the sta&dard ratea&d the sta&dard i&put e#g#' direct !a+or a!!owed for



the actua! output#

A&swer , is i&correct +ecause the (aria+!eo(erhead spe&di&g (aria&ce .a" +e affected +"' +utdoes &ot affect' a direct !a+or efficie&c" (aria&ce# teua!s the differe&ce +etwee& actua! (aria+!eo(erhead' which i&c!udes i&direct +ut &ot direct !a+or'a&d the (aria+!e o(erhead app!ied +ased o& thesta&dard rate a&d the actua! acti(it" !e(e!' which .a"or .a" &ot +e .easured i& direct !a+or hours# Thus'the effect of a& u&fa(ora+!e direct !a+or efficie&c"(aria&ce is to decrease a& u&fa(ora+!e (aria+!eo(erhead spe&di&g (aria&ce or to i&crease afa(ora+!e (aria+!e o(erhead spe&di&g (aria&ce#

[121] Source: CMA 129 3-26

A&swer A is correct# The fi%ed o(erhead spe&di&g+udget (aria&ce is the differe&ce +etwee& actua!a&d +udgeted fi%ed factor" o(erhead# Actua! fi%edo(erhead was 70'000# )udgeted fi%ed o(erheadwas 7 per hour +ased o& a capacit" of 100'000direct !a+or hours per .o&th' or 700'000# )ecause

these costs are fi%ed' the +udgeted fi%ed o(erhead isthe sa.e at a&" !e(e! of productio&# e&ce' the(aria&ce is 0'000 u&fa(ora+!e 70'000 -700'000#

A&swer ) is i&correct +ecause 40'000u&fa(ora+!e is the differe&ce +etwee& actua! fi%edo(erhead a&d the product of the sta&dard rate a&dthe actua! direct !a+or hours#

A&swer C is i&correct +ecause 60'000u&fa(ora+!e is the (o!u.e (aria&ce#

A&swer , is i&correct +ecause 20'000u&fa(ora+!e is the differe&ce +etwee& actua! (aria+!eo(erhead a&d +udgeted fi%ed o(erhead#

[122] Source: CMA 129 3-24

A&swer A is i&correct +ecause 60'000 fa(ora+!eis +ased o& 100'000 hours' &ot the actua! hours of9'000#

A&swer ) is correct# The (aria+!e o(erheadspe&di&g (aria&ce is the differe&ce +etwee& actua!(aria+!e o(erhead a&d the (aria+!e o(erhead +asedo& the sta&dard rate a&d the actua! acti(it" !e(e!#Thus' the (aria+!e o(erhead spe&di&g (aria&ce was12'000 fa(ora+!e [40'000 actua! cost - ;sta&dard rate % 9'000 actua! hours]# )ecause actua!is !ess tha& sta&dard' the (aria&ce was fa(ora+!e#

A&swer C is i&correct +ecause ;'000u&fa(ora+!e is the (aria+!e o(erhead efficie&c"(aria&ce#

A&swer , is i&correct +ecause 0'000u&fa(ora+!e is the fi%ed o(erhead spe&di&g (aria&ce#

[123] Source: CMA 129 3-2;

A&swer A is correct# The (aria+!e o(erheadefficie&c" (aria&ce eua!s the sta&dard price ; a&hour ti.es the differe&ce +etwee& the actua! hoursa&d the sta&dard hours a!!owed for the actua! output#

Thus' the (aria&ce is ;'000 U; % [9'000 actua!hours - sta&dard hours per u&it % 22'000 u&itsproduced]V# The (aria&ce is u&fa(ora+!e +ecauseactua! hours e%ceeded sta&dard hours#

A&swer ) is i&correct +ecause 60'000 fa(ora+!eis the (aria+!e o(erhead spe&di&g (aria&ce ca!cu!ated+ased o& capacit"' &ot actua! hours#

A&swer C is i&correct +ecause 96'000u&fa(ora+!e is +ased o& the differe&ce +etwee&sta&dard hours a!!owed for the actua! output a&dcapacit" hours#

A&swer , is i&correct +ecause 200'000u&fa(ora+!e is the e%cess of actua! direct !a+or costso(er actua! (aria+!e o(erhead costs#

[12] Source: CMA 129 3-29

A&swer A is i&correct +ecause 7'000u&fa(ora+!e is the direct !a+or efficie&c" (aria&ce#

A&swer ) is correct# The direct !a+or price(aria&ce eua!s actua! !a+or hours ti.es thediffere&ce +etwee& sta&dard a&d actua! !a+or rates#The actua! !a+or cost was 90'000 for 9'000hours' or 10 per hour# The sta&dard rate was 9

per hour# Thus' the (aria&ce is 9'000 [9'000hours % 10 - 9]# The (aria&ce is u&fa(ora+!e+ecause the actua! rate paid was higher tha& thesta&dard rate#

A&swer C is i&correct +ecause 60'000 fa(ora+!eeua!s the actua! rate ti.es the differe&ce +etwee&capacit" a&d actua! hours#

A&swer , is i&correct +ecause 1;'000u&fa(ora+!e is the tota! direct !a+or (aria&ce#

[127] Source: CMA 129 3-30

A&swer A is i&correct +ecause 10;'000 fa(ora+!e

is +ased o& the differe&ce +etwee& sta&dard a&dcapacit" hours#

A&swer ) is i&correct +ecause 120'000 fa(ora+!eis +ased o& the actua! rate a&d the differe&ce +etwee&sta&dard hours a&d capacit"#

A&swer C is i&correct +ecause 60'000 fa(ora+!eis +ased o& the actua! rate a&d the differe&ce +etwee&actua! hours a&d capacit"#

A&swer , is correct# The direct !a+or efficie&c"(aria&ce eua!s the sta&dard rate ti.es the differe&ce+etwee& actua! a&d sta&dard hours# e&ce' the(aria&ce is 7'000 U9 % [9'000 hours - sta&dard hours per u&it % 22'000 u&its]V# The

(aria&ce is u&fa(ora+!e +ecause the actua! hourse%ceeded the sta&dard hours#

[126] Source: CMA 0697 3-10

A&swer A is i&correct +ecause M) is a+eha(iora!' co..u&icatio&-orie&ted' respo&si+i!it"approach to e.p!o"ee se!f-directio&< a!though M)ca& +e used with sta&dard costs' the two are &ot&ecessari!" re!ated#

A&swer ) is i&correct +ecause rates of retur& re!ateto re(e&ues as we!! as costs' whereas a sta&dardcosti&g s"ste. co&cer&s costs o&!"#

A&swer C is i&correct +ecause participati(e.a&age.e&t stresses .u!tidirectio&a! co..u&icatio&<it has &o re!atio&ship to sta&dard costs#



A&swer , is correct# A sta&dard cost is a& esti.ateof what a cost shou!d +e u&der &or.a! operati&gco&ditio&s +ased o& accou&ti&g a&d e&gi&eeri&gstudies# Co.pari&g actua! a&d sta&dard costs per.itsa& e(a!uatio& of the effecti(e&ess of .a&ageria!perfor.a&ce# )ecause of the i.pact of fi%ed costs i&.ost +usi&esses' a sta&dard costi&g s"ste. is usua!!"&ot effecti(e u&!ess the co.pa&" a!so has a f!e%i+!e+udgeti&g s"ste.# B!e%i+!e +udgeti&g uses sta&dardcosts to prepare +udgets for .u!tip!e acti(it" !e(e!s#

[124] Source: CMA 0697 3-23

A&swer A is i&correct +ecause 70 u&fa(ora+!eeua!s the sta&dard ua&tit" &eeded for the actua!output ti.es the #07 u&fa(ora+!e price (aria&ce perpart#

A&swer ) is i&correct +ecause the (aria&ce isu&fa(ora+!e' a&d 70 is the a.ou&t of the (aria&cethat re!ates o&!" to the sta&dard i&put for the actua!output#

A&swer C is i&correct +ecause the (aria&ce is

u&fa(ora+!e# Burther.ore' the (aria&ce is +ased o&the ua&tit" purchased' &ot the ua&tit" co&su.ed#[Dote: The .ateria!s price (aria&ce is so.eti.esiso!ated at the ti.e of tra&sfer to productio&#]

A&swer , is correct# The sta&dard cost per part is1#7# The actua! cost was 1;'000 for 12'000parts' or 1#70 each# Thus' the price (aria&ce is600 u&fa(ora+!e [12'000 parts % 1#70 - 1#7]#The (aria&ce is u&fa(ora+!e +ecause the actua! costwas higher tha& the sta&dard cost#

[12;] Source: CMA 0697 3-2

A&swer A is correct# Sta&dard usage was three

parts per radio at 1#7 each# Bor a productio& !e(e!of 3'000 u&its' the tota! .ateria!s &eeded eua!ed9'000 parts' +ut .ateria!s actua!!" used tota!ed10'000 parts# Thus' the (aria&ce is 1'70u&fa(ora+!e [1#7 sta&dard cost per part % 10'000used - 9'000 sta&dard usage]#

A&swer ) is i&correct +ecause the (aria&ce isu&fa(ora+!e# The actua! ua&tit" used e%ceeded thesta&dard i&put a!!owed#

A&swer C is i&correct +ecause '370 u&fa(ora+!eassu.es that 12'000 parts were co&su.ed#

A&swer , is i&correct +ecause '370 fa(ora+!eassu.es that 12'000 parts were co&su.ed a&d that

the (aria&ce is fa(ora+!e#

[129] Source: CMA 0697 3-27

A&swer A is i&correct +ecause worerperfor.a&ce is a possi+!e cause of a .ateria!sefficie&c" (aria&ce#

A&swer ) is i&correct +ecause purchasi&gdepart.e&t actio&s are possi+!e causes of a .ateria!sefficie&c" (aria&ce#

A&swer C is i&correct +ecause product desig& is apossi+!e cause of a .ateria!s efficie&c" (aria&ce#

A&swer , is correct# A& u&fa(ora+!e .ateria!sua&tit" or usage efficie&c" (aria&ce ca& +e caused+" a &u.+er of factors' i&c!udi&g waste' shri&age'theft' poor perfor.a&ce +" productio& worers'

&o&si!!ed worers' or the purchase of+e!ow-sta&dard-ua!it" .ateria!s +" the purchasi&gdepart.e&t# Cha&ges i& product desig& ca& a!soaffect the ua&tit" of .ateria!s used# Sa!es (o!u.e ofthe product shou!d &ot +e a co&tri+uti&g factor to a.ateria!s efficie&c" (aria&ce#

[130] Source: CMA 0697 3-29

A&swer A is i&correct +ecause the sa!es price(aria&ce is a separate (aria&ce a&d is &ot aco.po&e&t of the sa!es (o!u.e (aria&ce#

A&swer ) is i&correct +ecause the sa!es price(aria&ce is a separate (aria&ce a&d is &ot aco.po&e&t of the sa!es (o!u.e (aria&ce#

A&swer C is correct# The sa!es (o!u.e (aria&ce ca&+e di(ided i&to the sa!es ua&tit" (aria&ce a&d thesa!es .i% (aria&ce# The sa!es ua&tit" (aria&ce is thecha&ge i& co&tri+utio& .argi& caused +" thediffere&ce +etwee& actua! a&d +udgeted (o!u.e'assu.i&g that +udgeted sa!es .i%' u&it (aria+!e costs'a&d u&it sa!es prices are co&sta&t# Thus' it eua!s the

sa!es (o!u.e (aria&ce whe& the sa!es .i% (aria&ce is/ero# & a .u!tiproduct fir.' the sa!es .i% (aria&ce isa (aria&ce caused +" a sa!es .i% that differs fro. that+udgeted# Bor e%a.p!e' e(e& whe& the sa!es ua&tit"is e%act!" as +udgeted' a& u&fa(ora+!e sa!es .i%(aria&ce ca& +e caused +" greater sa!es of a!ow-co&tri+utio& product at the e%pe&se of !owersa!es of a high-co&tri+utio& product#

A&swer , is i&correct +ecause the productio&(o!u.e (aria&ce is a fi%ed o(erhead (aria&ce# t is &otre!ated to the sa!es (o!u.e (aria&ce#

[131] Source: CMA 0697 3-30

A&swer A is i&correct +ecause the direct !a+orefficie&c" (aria&ce re!ates to i&efficie&t or efficie&t useof direct !a+or hours#

A&swer ) is i&correct +ecause the (aria+!eo(erhead efficie&c" (aria&ce re!ates to efficie&t ori&efficie&t use of (aria+!e o(erhead#

A&swer C is correct# The productio& (o!u.e(aria&ce a!so ca!!ed a& id!e capacit" (aria&ce is aco.po&e&t of the tota! factor" o(erhead (aria&ce# tis the differe&ce +etwee& +udgeted fi%ed costs a&dthe product of the sta&dard fi%ed cost per u&it ofi&put ti.es the sta&dard u&its of i&put a!!owed for theactua! output# Thus' the productio& (o!u.e (aria&ceeua!s u&der- or o(erapp!ied fi%ed factor" o(erhead#

This (aria&ce resu!ts whe& actua! acti(it" differs fro.the acti(it" +ase used to ca!cu!ate the fi%ed factor"o(erhead app!icatio& rate#

A&swer , is i&correct +ecause the (o!u.e (aria&ceis re!ated to o(erhead app!icatio&' &ot direct !a+or#

[132] Source: CMA 1297 3-3

A&swer A is i&correct +ecause a static +udget(aria&ce is the differe&ce +etwee& actua! costs orre(e&ues a&d those +udgeted o& a static +udget#

A&swer ) is i&correct +ecause a .aster +udgeti&cre.e&t is a& i&crease i& a +udgeted figure o& the

fir.5s .aster +udget#

A&swer C is i&correct +ecause the sa!es .i%(aria&ce is caused whe& a co.pa&"5s actua! sa!es .i%



is differe&t fro. the +udgeted sa!es .i%#

A&swer , is correct# f a fir.5s sa!es differ fro. thea.ou&t +udgeted' the differe&ce cou!d +e attri+uta+!eeither to the sa!es price (aria&ce or the sa!es (o!u.e(aria&ce# The sa!es (o!u.e (aria&ce is the cha&ge i&co&tri+utio& .argi& caused +" the differe&ce +etwee&the actua! a&d +udgeted sa!es (o!u.es#

[133] Source: CMA 1297 3-

A&swer A is i&correct +ecause +oth efficie&c"(aria&ces are +ased o& the sa.e &u.+er of hourswored# Therefore' if o&e is u&fa(ora+!e' the otherwi!! a!so +e u&fa(ora+!e#

A&swer ) is correct# f (aria+!e o(erhead is app!iedto productio& o& the +asis of direct !a+or hours' the&+oth the (aria+!e o(erhead efficie&c" (aria&ce a&d thedirect !a+or efficie&c" (aria&ce wi!! +e ca!cu!ated o&the +asis of the sa.e &u.+er of hours# f the !a+orefficie&c" (aria&ce is u&fa(ora+!e' the& the o(erheadefficie&c" (aria&ce wi!! a!so +e u&fa(ora+!e +ecause+oth (aria&ces are +ased o& the differe&ce +etwee&

sta&dard a&d actua! !a+or hours wored#

A&swer C is i&correct +ecause +oth efficie&c"(aria&ces are +ased o& the sa.e &u.+er of hourswored# Therefore' if o&e is u&fa(ora+!e' the otherwi!! a!so +e u&fa(ora+!e#

A&swer , is i&correct +ecause the a.ou&t of the(aria&ces wi!! +e differe&t depe&di&g o& the a.ou&tof the costs a&ticipated a&d actua!!" paid#

[13] Source: CMA 1297 3-4

A&swer A is i&correct +ecause the fi%ed o(erheadspe&di&g (aria&ce is the differe&ce +etwee& actua!

fi%ed costs a&d +udgeted costs#

A&swer ) is i&correct +ecause the efficie&c"(aria&ce is app!ica+!e to (aria+!e o(erhead#

A&swer C is correct# A de&o.i&ator !e(e! ofacti(it" .ust +e used to esta+!ish the sta&dard costapp!icatio& rate for fi%ed factor" o(erhead# Theproductio& (o!u.e (aria&ce is the differe&ce +etwee&+udgeted fi%ed costs a&d the sta&dard cost per u&it ofi&put ti.es the sta&dard u&its of i&put a!!owed for theactua! productio&#

A&swer , is i&correct +ecause the f!e%i+!e +udget(aria&ce is the differe&ce +etwee& actua! a&d+udgeted figures o& a f!e%i+!e +udget#

[137] Source: CMA 1297 3-;

A&swer A is i&correct +ecause a spe&di&g (aria&ceis &ot the sa.e as a& efficie&c" (aria&ce#

A&swer ) is i&correct +ecause a price (aria&ce is&ot the sa.e as a& efficie&c" (aria&ce#

A&swer C is i&correct +ecause a (o!u.e (aria&ce is+ased o& fi%ed costs' whi!e a& efficie&c" (aria&ce is+ased o& (aria+!e costs#

A&swer , is correct# A& efficie&c" (aria&ce isca!cu!ated +" .u!tip!"i&g the differe&ce +etwee&

sta&dard a&d actua! usage ti.es the sta&dard cost peru&it of i&put# The efficie&c" (aria&ces ca& +e di(idedi&to "ie!d a&d .i% (aria&ces# These (aria&ces areca!cu!ated o&!" whe& the productio& process i&(o!(es

co.+i&i&g se(era! .ateria!s or c!asses of !a+or i&(ar"i&g proportio&s whe& su+stitutio&s are a!!owa+!ei& co.+i&i&g resources#

[136] Source: CMA 1297 3-11

A&swer A is i&correct +ecause +oth the purchasi&g.a&ager a&d the productio& .a&ager cou!d +e atfau!t#

A&swer ) is i&correct +ecause the p!a&t co&tro!!eris at too high a !e(e! for a& i&(estigatio& of a .ateria!usage (aria&ce#

A&swer C is i&correct +ecause +oth the purchasi&g.a&ager a&d the productio& .a&ager cou!d +e atfau!t#

A&swer , is correct# A& u&fa(ora+!e .ateria!sua&tit" (aria&ce is usua!!" caused +" waste'shri&age' or theft# A!ter&ati(e!"' a& u&fa(ora+!e(aria&ce cou!d +e attri+uta+!e to the purchasi&gdepart.e&t5s &ot +u"i&g the proper ua!it" of.ateria!s i& a& atte.pt to achie(e a fa(ora+!e .ateria!

price (aria&ce# Thus' either the productio& .a&ageror the purchasi&g .a&ager cou!d +e respo&si+!e for a.ateria! usage (aria&ce#

[134] Source: CMA 1297 3-27

A&swer A is i&correct +ecause the .ateria! price(aria&ce ca& +e great!" i&f!ue&ced +" the purchasi&g.a&ager#

A&swer ) is correct# The productio& co&tro!super(isor has the .ost co&tro! o(er the .ateria!usage (aria&ce# The .ateria! usage (aria&ce .easuresthe e%cess a.ou&t of .ateria!s used o(er the a.ou&t

specified i& the sta&dards# The .ateria! usage or.ateria! ua&tit" (aria&ce' whe& u&fa(ora+!e' is ofte&attri+uta+!e to waste' shri&age' or theft i& theproductio& areas# The e%cess usage occurs u&der thesuper(isio& of the productio& depart.e&t#

A&swer C is i&correct +ecause the (aria+!eo(erhead spe&di&g (aria&ce is +oth a ua&tit" a&d aprice (aria&ce# rices paid are &ot co&tro!!a+!e +" theproductio& co&tro! super(isor#

A&swer , is i&correct +ecause fi%ed o(erhead(aria&ces usua!!" ca&&ot +e co&tro!!ed +" the.a&ufacturi&g depart.e&ts#

[13;] Source: CMA 12;9 -2

A&swer A is i&correct +ecause the o(erhead(aria&ces wou!d &ot cause a cha&ge i& the direct!a+or efficie&c" (aria&ce#

A&swer ) is i&correct +ecause the o(erhead(aria&ces wou!d &ot cause a cha&ge i& the direct!a+or efficie&c" (aria&ce#

A&swer C is correct# A& u&fa(ora+!e direct !a+orefficie&c" (aria&ce resu!ts whe& productio& reuires.ore !a+or hours tha& e%pected' for e%a.p!e'+ecause e.p!o"ees tae !o&ger coffee +reas a&dear!ier wash-up ti.es tha& a&ticipated whe& thesta&dards were esta+!ished# The (aria&ce ca& a!so +e

the resu!t of productio& de!a"s' such as those caused+" poor ua!it" .ateria!s or .ateria! shortages# Thus'a& u&fa(ora+!e .ateria! usage (aria&ce cou!d i&dicatethat e%cessi(e .ateria!s were used# The e%cessi(e use



of .ateria!s wou!d reuire .ore !a+or ti.e#

A&swer , is i&correct +ecause the o(erhead(aria&ces wou!d &ot cause a cha&ge i& the direct!a+or efficie&c" (aria&ce#

[139] Source: CMA 0692 3-17

A&swer A is i&correct +ecause 9'700'000 eua!s(aria+!e !a+or costs o&!"#

A&swer ) is i&correct +ecause addi&g the600'000 of fi%ed costs to the 9'700'000 of(aria+!e !a+or costs produces a tota! cost of10'100'000#

A&swer C is correct# The f!e%i+!e +udget pro(idesfor a cost of 1'000 per artic!e 10'000'000 ・

10'000 artic!es# $ach artic!e shou!d reuire 20 hoursof !a+or 200 hours ・10 artic!es# Thus' the sta&dard!a+or rate is 70 per hour 1'000 ・20 hours' a&dtota! sta&dard (aria+!e !a+or cost is 9'700'0009'700 artic!es % 20 hours % 70 per hour# Accordi&g!"' tota! e%pected costs are 10'100'000

9'700'000 N 600'000 BC#

A&swer , is i&correct +ecause !a+or costs wi!!dec!i&e as productio& dec!i&es' +ut fi%ed costs wi!!&ot#

[10] Source: CMA 0692 3-16

A&swer A is correct# )udgeted fi%ed costs are600'000# The actua! fi%ed costs were 61;'0009'43;'000 tota! costs - 9'120'000 f!e%i+!e costs#)ecause actua! costs were 1;'000 higher tha& the+udget' the (aria&ce is u&fa(ora+!e#

A&swer ) is i&correct +ecause the (aria&ce was

u&fa(ora+!e#

A&swer C is i&correct +ecause ;'000 is +asedo& a fa!se presu.ptio& that fi%ed costs wi!! +e !ess ata 9'700 productio& !e(e! tha& a 10'000 !e(e!#

A&swer , is i&correct +ecause the (aria&ce wasu&fa(ora+!e#

[11] Source: CMA 0692 3-14

A&swer A is correct# The !a+or efficie&c" (aria&ceis the differe&ce +etwee& sta&dard a&d actua! hours'.u!tip!ied +" the sta&dard cost per hour# Thesta&dard !a+or rate is 70 per hour' a&d the sta&dard

ti.e a!!owed for 9'700 artic!es is 190'000 hours9'700 % 20# Actua! hours wored tota!ed 192'000#Thus' a& u&fa(ora+!e (aria&ce of 2'000 hoursoccurred# The u&fa(ora+!e !a+or efficie&c" (aria&cewas therefore 100'000 70 % 2'000 hours#

A&swer ) is i&correct +ecause 23;'000 is thediffere&ce +etwee& tota! fi%ed N (aria+!e sta&dard!a+or cost 9'700'000 a&d tota! actua! cost9'43;'000#

A&swer C is i&correct +ecause the (aria&ce isu&fa(ora+!e#

A&swer , is i&correct +ecause the efficie&c"(aria&ce is +ased o& sta&dard hours for actua!

productio& !e(e!s--i& this case 190'000 hours#

[12] Source: CMA 0692 3-1;

A&swer A is i&correct +ecause the (aria&ce isu&fa(ora+!e# The purchase price e%ceeded sta&dardcost#

A&swer ) is correct# The .ateria!s price (aria&ceeua!s the actua! ua&tit" purchased ti.es thediffere&ce +etwee& actua! a&d sta&dard u&it prices# Actua! cost was 47'000' or 3#;0 per pou&d#e&ce' the (aria&ce is 27'000 u&fa(ora+!e[127'000 pou&ds % 3#;0 - 3#60]#

A&swer C is i&correct +ecause the (aria&ce isu&fa(ora+!e# The purchase price e%ceeded sta&dardcost#

A&swer , is i&correct +ecause the price (aria&ce isco.puted o& the actua! ua&tit" purchased' &ot theua&tit" used#

[13] Source: CMA 0692 3-19

A&swer A is i&correct +ecause the (aria&ce isfa(ora+!e# Actua! usage was !ess tha& the sta&dard#

A&swer ) is i&correct +ecause the (aria&ce isca!cu!ated +" .u!tip!"i&g the ua&tit" differe&ce ti.esthe sta&dard u&it cost of 3#60' &ot the actua! u&itcost#

A&swer C is i&correct +ecause the (aria&ce isfa(ora+!e# Actua! usage was !ess tha& the sta&dard#

A&swer , is correct# This (aria&ce eua!s thesta&dard u&it cost ti.es the differe&ce +etwee& theactua! ua&tit" used a&d the sta&dard ua&tit" forgood productio&# Co&seue&t!"' the (aria&ce is4'200 fa(ora+!e U3#60 % [7 pou&ds % 22'000u&its - 10;'000 pou&ds used]V#

[1] Source: CMA 0692 3-20

A&swer A is correct# The direct !a+or rate (aria&ceeua!s the actua! ua&tit" of hours wored ti.es thediffere&ce +etwee& the sta&dard a&d actua! !a+orrates# Tota! direct !a+or cost was 324'600 908 %36'000' a&d the actua! u&it direct !a+or cost was

11#40 324'600 ・2;'000 hours# Thus' the(aria&ce is ;'00 fa(ora+!e [2;'000 hours % 12 -11#40]#

A&swer ) is i&correct +ecause the (aria&ce isfa(ora+!e# The actua! !a+or rate was !ess tha& thesta&dard rate#

A&swer C is i&correct +ecause the (aria&ce isfa(ora+!e# The actua! !a+or rate was !ess tha& thesta&dard rate#

A&swer , is i&correct +ecause 6'000 is the !a+orefficie&c" (aria&ce' &ot the !a+or rate (aria&ce#

[17] Source: CMA 0692 3-21

A&swer A is i&correct +ecause the (aria&ce isu&fa(ora+!e# More hours were wored tha& a!!owed+" the sta&dards#

A&swer ) is correct# The direct !a+or efficie&c"

(aria&ce eua!s the sta&dard u&it cost ti.es thediffere&ce +etwee& actua! hours a&d sta&dard hours# Accordi&g!"' the (aria&ce is 6'000 u&fa(ora+!eU12 % [2;'000 hours - 1#27 hours % 22'000



u&its]V#

A&swer C is i&correct +ecause the !a+or efficie&c"(aria&ce is 6'000 u&fa(ora+!e#

A&swer , is i&correct +ecause the (aria&ce isu&fa(ora+!e# More hours were wored tha& a!!owed+" the sta&dards#

[16] Source: CMA 1249 -10

A&swer A is i&correct +ecause the fi%ed o(erhead(o!u.e (aria&ce co&cer&s the app!icatio& of fi%edcost to product a&d does &ot e&co.pass re(e&ue orsa!es co&cepts i& a&" wa"#

A&swer ) is correct# The fi%ed o(erhead (o!u.e(aria&ce is the differe&ce +etwee& +udgeted fi%edcosts a&d actua! o(erhead app!ied' which eua!s the+udgeted fi%ed o(erhead rate ti.es the sta&dard i&puta!!owed for the actua! output# t is so!e!" a .easure ofcapacit" usage a&d does &ot sig&if" that fi%ed costswere .ore or !ess tha& +udgeted#

A&swer C is i&correct +ecause the fi%ed o(erhead(o!u.e (aria&ce is ca!cu!ated o& the assu.ptio& thatfi%ed costs are co&sta&t#

A&swer , is i&correct +ecause the (o!u.e (aria&ceco&cer&s output !e(e!s rather tha& the efficie&c" ofproductio&#

[14] Source: CMA 1249 -11

A&swer A is i&correct +ecause idea! capacit"sta&dards are h"pothetica!< the" do &ot co&sider thepractica! rea!ities of operatio&s such as +readow&s'e.p!o"ee i!!&ess' &or.a! waste' etc#

A&swer ) is i&correct +ecause cost sta&dardsshou!d &ot +e +ased o& &or.a! or a(erage historica!perfor.a&ce co&cepts# ?ather' the" shou!d +e +asedupo& what is attai&a+!e accordi&g to a tech&ica!'scie&tific' or e&gi&eeri&g approach#

A&swer C is i&correct +ecause cost sta&dardsshou!d &ot +e +ased o& &or.a! or a(erage historica!perfor.a&ce co&cepts# ?ather' the" shou!d +e +asedupo& what is attai&a+!e accordi&g to a tech&ica!'scie&tific' or e&gi&eeri&g approach#

A&swer , is correct# $&gi&eered costs are thoseha(i&g a re!ati(e!" .easura+!e a&d co&sta&tre!atio&ship +etwee& i&put a&d output# Most !a+ora&d direct .ateria!s costs are e&gi&eered# The" are

deter.i&ed +" wor .easure.e&t# B!e%i+!e +udgetsa&d sta&dard cost s"ste.s are .ea&s of co&tro!!i&ge&gi&eered costs#

[1;] Source: CMA 06; -26

A&swer A is i&correct +ecause 21#00 e%c!udese.p!o"ee +e&efits#

A&swer ) is correct# The sta&dard direct !a+or u&itcost eua!s 3 hours ti.es the cost per ,K# Thisa.ou&t is deter.i&ed +" addi&g e.p!o"ee +e&efits towee!" wages a&d di(idi&g +" hours per wee#

*ee!" wages 27#00

!us +e&efits #27 % 27 61#27 ------- 306#27 ,i(ided +" hoursEwee ・ 37

------- CostE,K ;#47 ,KEu&it % 3 ------- @&it ,K cost 26#27 OOOOOOO

A&swer C is i&correct +ecause the sta&dard direct!a+or u&it cost eua!s 3 hours ti.es the cost per,K# The cost per ,K eua!s wee!" wages p!use.p!o"ee +e&efits' di(ided +" producti(e hours perwee' or ;#47 [27#00 N 61#27 ・37]# Thesta&dard direct !a+or cost per u&it is 26#27 ;#47 %3 hours#

A&swer , is i&correct +ecause 36#47 resu!ts fro.di(idi&g wee!" wages p!us +e&efits +" 27 e.p!o"eesi&stead of 37 wee!" producti(e hours per e.p!o"ee#

[19] Source: CMA 06;4 -16

A&swer A is i&correct +ecause 00 is thediffere&ce +etwee& +udgeted a&d actua! (aria+!ese!!i&g a&d ad.i&istrati(e costs#

A&swer ) is correct# The (o!u.e (aria&ce iso!atesthe effect of se!!i&g .ore or !ess u&its tha& +udgeted#t eua!s +udgeted u&it co&tri+utio& .argi& @CMti.es the differe&ce +etwee& +udgeted a&d actua!u&its so!d# Gi(e& e%pected sa!es of '000 u&its a&dre(e&ue of 60'000' u&it price is 17# Faria+!e costsare 16'000 for .a&ufacturi&g a&d ;'000 for se!!i&g'a&d u&it (aria+!e cost is 6 2'000 ・'000 u&its#The @CM is 9 17 - 6# Si&ce actua! sa!es were200 u&its !ess tha& +udgeted '000 - 3';00' the !ostco&tri+utio& .argi& was 1';00 9 % 200# This(aria&ce is u&fa(ora+!e +ecause actua! sa!es were !esstha& +udgeted#

A&swer C is i&correct +ecause 200 u&its is the

differe&ce +etwee& +udgeted a&d actua! u&its# Thisdiffere&ce' .u!tip!ied +" the @CM of 9 17 - 6eua!s the 1;00 u&fa(ora+!e co&tri+utio& .argi&(o!u.e (aria&ce#

A&swer , is i&correct +ecause 6';00 is thediffere&ce +etwee& +udgeted a&d actua! re(e&ue#

[170] Source: CMA 12;4 -30

A&swer A is i&correct +ecause the ua&tit" of.ateria!s purchased ca&&ot +e deter.i&ed fro. thei&for.atio& gi(e&#

A&swer ) is i&correct +ecause the ua&tit" of

.ateria!s purchased ca&&ot +e deter.i&ed fro. thei&for.atio& gi(e&#

A&swer C is correct# A fa(ora+!e price (aria&cei&dicates that the .ateria!s were purchased at a price!ess tha& sta&dard# The u&fa(ora+!e ua&tit" (aria&cei&dicates that the ua&tit" of .ateria!s used for actua!productio& e%ceeded the sta&dard ua&tit" for thegood u&its produced#

A&swer , is i&correct +ecause the actua! usage wasgreater tha& sta&dard#

[171] Source: CMA 12;9 -1

A&swer A is i&correct +ecause the efficie&c"(aria&ces are direct!" corre!ated#

A&swer ) is correct# The ca!cu!atio& of the (aria+!e



o(erhead efficie&c" (aria&ce is si.i!ar to that of thedirect !a+or efficie&c" (aria&ce i& that +oth .easurethe effect of the differe&ce +etwee& actua! a&dsta&dard hours# Assu.i&g o(erhead is app!ied o& the+asis of direct !a+or hours' +oth (aria&ce ca!cu!atio&swi!! +e +ased o& the sa.e &u.+er of hours# Thus' ifthe direct !a+or efficie&c" (aria&ce is u&fa(ora+!e' the(aria+!e o(erhead efficie&c" (aria&ce wi!! a!so +eu&fa(ora+!e#

A&swer C is i&correct +ecause the a.ou&t of the(aria&ce is depe&de&t upo& the actua! costs i&curred#

A&swer , is i&correct +ecause the efficie&c"(aria&ces are direct!" corre!ated#

[172] Source: CMA 12;9 -

A&swer A is i&correct +ecause the efficie&c"(aria&ces wou!d &ot cause the fa(ora+!e price(aria&ce#

A&swer ) is i&correct +ecause the purchase of

higher tha& sta&dard .ateria!s wou!d !ead to a&u&fa(ora+!e price (aria&ce#

A&swer C is correct# A fa(ora+!e price (aria&ce.ight i&dicate that cheaper .ateria!s of !ower ua!it"were purchased a&d that greater usage was&ecessar"#

A&swer , is i&correct +ecause !a+or .i% pro+!e.swou!d cause !a+or (aria&ces' &ot .ateria! (aria&ce#

[173] Source: CMA 12;9 -7

A&swer A is i&correct +ecause the purchasi&gdepart.e&t has .ore co&tro! o(er the price (aria&ce

tha& does the productio& depart.e&t#

A&swer ) is correct# The productio& co&tro!super(isor wou!d ha(e the .ost co&tro! o(er the.ateria! usage (aria&ce +ecause it is t"pica!!"i&f!ue&ced .ost +" acti(ities withi& the productio&depart.e&t#

A&swer C is i&correct +ecause it is &ot asco&tro!!a+!e as the .ateria! usage (aria&ce#

A&swer , is i&correct +ecause the fi%ed o(erhead(aria&ces are outside the co&tro! of productio&#

[17] Source: CMA 1290 3-7

A&swer A is i&correct +ecause tota! sta&dard hoursa!!owed eua! 396'000#

A&swer ) is correct# Two sta&dard hours area!!owed for each u&it of productio&# Gi(e& actua!productio& of 19;'000 u&its' tota! sta&dard hoursa!!owed eua! 396'000 2 % 19;'000#

A&swer C is i&correct +ecause tota! sta&dard hoursa!!owed eua! 396'000#

A&swer , is i&correct +ecause tota! sta&dard hoursa!!owed eua! 396'000#

[177] Source: CMA 1290 3-6

A&swer A is correct# The (aria+!e o(erheadefficie&c" (aria&ce eua!s the differe&ce +etwee&

actua! a&d sta&dard direct !a+or hours ti.es thesta&dard cost per hour# Bi%ed o(erhead was+udgeted at 600'000 3 % 200'000 e%pectedu&its# Thus' tota! (aria+!e o(erhead was esti.ated to+e 300'000 900'000 tota! - 600'000' a&dthe (aria+!e o(erhead app!icatio& rate was #47 perhour [300'000 ・2 hours % 200'000 u&its]#Sta&dard hours for actua! productio& are 396'00019;'000 u&its % 2# Actua! hours wored were0'000# e&ce' the (aria+!e o(erhead efficie&c"(aria&ce is 33'000 [#47 % 0'000 actua! hours -396'000 sta&dard hours for actua! output]# The(aria&ce is u&fa(ora+!e +ecause actua! hourse%ceeded +udgeted hours#

A&swer ) is i&correct +ecause the (aria+!eo(erhead efficie&c" (aria&ce is 33'000@#

A&swer C is i&correct +ecause the (aria+!eo(erhead efficie&c" (aria&ce is 33'000@#

A&swer , is i&correct +ecause the (aria+!eo(erhead efficie&c" (aria&ce is 33'000@#

[176] Source: CMA 1290 3-4

A&swer A is i&correct +ecause the (aria+!eo(erhead spe&di&g (aria&ce is 22'000@#

A&swer ) is i&correct +ecause the (aria+!eo(erhead spe&di&g (aria&ce is 22'000@#

A&swer C is correct# )ased o& the 0'000 hoursactua!!" wored a&d the #47 per hour (aria+!eo(erhead rate' the tota! sta&dard cost for (aria+!eo(erhead is 330'000# The actua! (aria+!e o(erheadtota!ed 372'000# The 22'000 (aria+!e o(erheadspe&di&g (aria&ce is u&fa(ora+!e +ecause the actua!cost was higher tha& the sta&dard#

A&swer , is i&correct +ecause the (aria+!eo(erhead spe&di&g (aria&ce is 22'000@#

[174] Source: CMA 1290 3-;

A&swer A is i&correct +ecause the fi%ed o(erheadspe&di&g (aria&ce is 27'000B#

A&swer ) is correct# Actua! fi%ed o(erhead was747'000# )udgeted fi%ed o(erhead was 3 per u&itat a& esti.ated productio& of 200'000 u&its< a tota!of 600'000# The differe&ce of 27'000 is afa(ora+!e (aria&ce +ecause the actua! a.ou&t was!ess tha& that +udgeted#

A&swer C is i&correct +ecause the fi%ed o(erheadspe&di&g (aria&ce is 27'000B#

A&swer , is i&correct +ecause the fi%ed o(erheadspe&di&g (aria&ce is 27'000B#

[17;] Source: CMA 1290 3-9

A&swer A is i&correct +ecause the fi%ed o(erheadapp!ied is 79'000#

A&swer ) is i&correct +ecause the fi%ed o(erheadapp!ied is 79'000#

A&swer C is correct# Bi%ed o(erhead is app!ied at

the rate of 3 per u&it# The a.ou&t app!ied gi(e&actua! productio& is 79'000 3 % 19;'000 u&its#

A&swer , is i&correct +ecause the fi%ed o(erhead



app!ied is 79'000#

[179] Source: CMA 1290 3-10

A&swer A is correct# The fi%ed o(erhead (o!u.e(aria&ce resu!ts whe& productio& (aries fro. thede&o.i&ator a.ou&t# The de&o.i&ator a.ou&t is the!e(e! of productio& used to deter.i&e the sta&dardcost per u&it# )ecause productio& was e%pected to+e 200'000 u&its the de&o.i&ator !e(e!' +ut actua!productio& was o&!" 19;'000 u&its' a& u&fa(ora+!e(o!u.e (aria&ce of 2'000 u&its occurred# Thus'2'000 u&its were &ot charged with 3 per u&it ofo(erhead' a&d the (o!u.e (aria&ce i& do!!ars was6'000@ 2'000 u&its % 3# This u&derapp!icatio& offi%ed o(erhead is u&fa(ora+!e +ecause it i&dicates a&u&deruse of faci!ities< that is' acti(it" was !ess tha&+udgeted# @&!ie other (aria&ces' this (aria&ce does&ot .easure de(iatio&s fro. e%pected costs +utrather the departure fro. the e%pected use ofproducti(e capacit"#

A&swer ) is i&correct +ecause the fi%ed o(erhead(o!u.e (aria&ce is 6'000@#

A&swer C is i&correct +ecause the fi%ed o(erhead(o!u.e (aria&ce is 6'000@#

A&swer , is i&correct +ecause the fi%ed o(erhead(o!u.e (aria&ce is 6'000@#

[160] Source: CMA 1291 3-1

A&swer A is i&correct +ecause the price (aria&ce is16'000@#

A&swer ) is correct# The direct .ateria!s price(aria&ce eua!s the actua! ua&tit" purchased ti.esthe differe&ce +etwee& the actua! a&d sta&dard u&it

costs# The sta&dard u&it cost for direct .ateria!s is1#;0 per pou&d# The actua! cost for 160'000pou&ds was 30'000' or 1#90 per pou&d# The(aria&ce is u&fa(ora+!e +ecause the actua! pricee%ceeded the sta&dard price# Thus' the (aria&ce is16'000@ #10 % 160'000 !+s##

A&swer C is i&correct +ecause the price (aria&ce is16'000@#

A&swer , is i&correct +ecause the price (aria&ce is16'000@#

[161] Source: CMA 1291 3-2

A&swer A is i&correct +ecause the direct .ateria!sua&tit" (aria&ce is 14'100B#

A&swer ) is i&correct +ecause the direct .ateria!sua&tit" (aria&ce is 14'100B#

A&swer C is i&correct +ecause the direct .ateria!sua&tit" (aria&ce is 14'100B#

A&swer , is correct# The direct .ateria!s ua&tit"(aria&ce eua!s the sta&dard price 1#;0 per pou&dti.es the differe&ce +etwee& the actua! a&d sta&dardua&tities# The actua! ua&tit" used was 12'700pou&ds# The sta&dard ua&tit" is ; pou&ds per u&it ofproduct# Gi(e& that 19'000 u&its were produced' thesta&dard ua&tit" for the actua! output was 172'000

pou&ds ; !+s# % 19'000 u&its# e&ce' the direct.ateria!s ua&tit" (aria&ce is 14'100 [1#;0 %172'000 - 12'700]# Si&ce the actua! ua&tit" usedwas !ess tha& the sta&dard ua&tit"' the (aria&ce is

fa(ora+!e#

[162] Source: CMA 1291 3-3

A&swer A is correct# The direct !a+or rate (aria&ceeua!s the actua! ua&tit" of !a+or used ti.es thediffere&ce +etwee& the actua! a&d sta&dard prices for!a+or# The actua! tota! price of !a+or was 2'000'908 of which was for direct !a+or# Thus' the price ofdirect !a+or was 34';00# A tota! of 7'000 hours ofdirect !a+or was wored# Thus' the actua! hour!" ratewas 4#76 34';00 ・7'000 hrs#' a&d the (aria&ceis 2'200 [7'000 hrs# % ;#00 - 4#76]# The actua!rate was !ess tha& sta&dard' so the (aria&ce isfa(ora+!e#

A&swer ) is i&correct +ecause the !a+or rate(aria&ce is 2'200B#

A&swer C is i&correct +ecause the !a+or rate(aria&ce is 2'200B#

A&swer , is i&correct +ecause the !a+or rate(aria&ce is 2'200B#

[163] Source: CMA 1291 3-

A&swer A is i&correct +ecause the direct !a+orefficie&c" (aria&ce is 2'000@#

A&swer ) is i&correct +ecause the direct !a+orefficie&c" (aria&ce is 2'000@#

A&swer C is correct# The direct !a+or efficie&c"(aria&ce eua!s the sta&dard !a+or rate ti.es thediffere&ce +etwee& actua! a&d sta&dard hours#)ecause each u&it reuires #27 hours of !a+or' thesta&dard hours a!!owed for Do(e.+er wou!d ha(e+ee& '470 #27 % 19'000 u&its of output#

Accordi&g!"' the (aria&ce is 2'000 [;#00 sta&dardrate % 7'000 actua! hrs# - '470 sta&dard hrs#]# This(aria&ce is u&fa(ora+!e +ecause the actua! hourse%ceeded the sta&dard hours#

A&swer , is i&correct +ecause the direct !a+orefficie&c" (aria&ce is 2'000@#

[16] Source: CMA 1291 3-1

A&swer A is i&correct +ecause 30'000 is thediffere&ce +etwee& the actua! a&d +udgetedco&tri+utio& .argi&s#

A&swer ) is i&correct +ecause 1;'000 eua!s the

differe&ce +etwee& actua! a&d +udgeted u&it sa!esti.es the actua! @CM#

A&swer C is correct# The sa!es ua&tit" (aria&ce isthe differe&ce +etwee& the actua! a&d +udgeted u&its'ti.es the +udgeted @CM#

120'000 7'000 - 6'000 % --------- O 20'000 @ 6'000

A&swer , is i&correct +ecause 17'000 is the sa!esprice (aria&ce#

[167] Source: CMA 1291 3-17

A&swer A is i&correct +ecause 30'000 is thediffere&ce +etwee& the actua! a&d +udgetedco&tri+utio& .argi&s#



A&swer ) is i&correct +ecause 1;'000 eua!s thediffere&ce +etwee& actua! a&d +udgeted u&it sa!esti.es the actua! @CM#

A&swer C is i&correct +ecause 20'000 is the sa!esua&tit" (aria&ce#

A&swer , is correct# The sa!es price (aria&ce is theactua! &u.+er of u&its so!d 7'000' ti.es thediffere&ce +etwee& +udgeted se!!i&g price 300'000・6'000 a&d actua! se!!i&g price 237'000 ・7'000#

70 - 4 % 7'000 O 17'000 @

[166] Source: CMA 1291 3-16

A&swer A is correct# The (aria+!e cost f!e%i+!e+udget (aria&ce is eua! to the differe&ce +etwee&actua! (aria+!e costs a&d the product of the actua!ua&tit" so!d a&d the +udgeted u&it (aria+!e cost1;0'000 ・6'000 O 30#

30 % 7'000 - 17'000 O 7'000 B

A&swer ) is i&correct +ecause the (aria&ce isfa(ora+!e#

A&swer C is i&correct +ecause '000 is thea.ou&t of the fi%ed cost (aria&ce#

A&swer , is i&correct +ecause '000 is thea.ou&t of the fi%ed cost (aria&ce#

[164] Source: CMA 1291 3-14

A&swer A is i&correct +ecause 7'000 is the(aria+!e cost (aria&ce#

A&swer ) is i&correct +ecause 7'000 is the(aria+!e cost (aria&ce#


A&swer , is correct# The fi%ed cost (aria&ce eua!sthe differe&ce +etwee& actua! fi%ed costs a&d+udgeted fi%ed costs#

;'000 - ;0'000 O '000 @

[16;] Source: CMA 1291 3-1;

A&swer A is i&correct +ecause Bo!so. wi!! &eed to

&ow the actua! tota! .aret si/e#

A&swer ) is i&correct +ecause Bo!so. wi!! &eed to&ow the actua! tota! .aret si/e#

A&swer C is correct# A cha&ge i& .aret shareref!ects a cha&ge i& re!ati(e co.petiti(e&ess# Toiso!ate the effect o& operati&g i&co.e of a& i&creaseor a decrease i& .aret share' the co.pa&" .ust&ow its +udgeted a&d actua! .aret shares' theactua! si/e of the .aret for Do(e.+er' a&d the+udgeted weighted-a(erage u&it co&tri+utio& .argi&#Such co.putatio&s .a" he!p Bo!so. to deter.i&ewhether its dec!i&e i& sa!es resu!ted fro. a !oss ofco.petiti(e&ess or a shri&age of the .aret#

A&swer , is i&correct +ecause Bo!so. wi!! &eed to&ow the +udgeted .aret share#

[169] Source: CA 1192 F-20

A&swer A is i&correct +ecause 1'127 fa(ora+!eresu!ts fro. .u!tip!"i&g the sta&dard direct .ateria!sthat shou!d ha(e +ee& used i& productio& [3 %4'700 O 22'700 !+s#] ti.es the differe&ce +etwee&sta&dard price a&d actua! price [1#60 - 1#77 O#07]#

A&swer ) is i&correct +ecause 1'170 fa(ora+!eresu!ts fro. .u!tip!"i&g the direct .ateria!s issued toproductio& 23'000 !+s# ti.es the differe&ce+etwee& sta&dard price a&d actua! price [1#60 -1#77 O #07]#

A&swer C is i&correct +ecause 1'200 fa(ora+!eresu!ts fro. .u!tip!"i&g the direct .ateria!s thatshou!d ha(e +ee& used for +udgeted productio& [3 %;'000 O 2'000 !+s#] ti.es the differe&ce +etwee&sta&dard price a&d actua! price [1#60 - 1#77 O#07]#

A&swer , is correct# The .ateria!s price (aria&ce.easures the differe&ce +etwee& what was actua!!"paid for the goods purchased a&d the sta&dard

a.ou&t a!!owed for the goods purchased# Thus' iteua!s the differe&ce +etwee& actua! price a&dsta&dard price' .u!tip!ied +" the actua! ua&tit"purchased# This uestio& assu.es that price(aria&ces are iso!ated at the ti.e of purchase# f the"are iso!ated whe& the .ateria!s are used' the (aria&ceis the differe&ce +etwee& sta&dard a&d actua! price'ti.es the a.ou&t used &ot a.ou&t purchased# Accordi&g!"' the direct .ateria!s purchase price(aria&ce is 1'270 B U[3;'470 TC ・27'000 !+s# -1#60 per !+#] % 27'000 !+s#V# The (aria&ce isfa(ora+!e +ecause actua! price was !ess tha& sta&dardprice#

[140] Source: CA 1192 F-21

A&swer A is i&correct +ecause 447 u&fa(ora+!eresu!ts fro. .u!tip!"i&g the differe&ce +etwee&sta&dard ua&tit" [3 % 4'700 O 22'700] a&d actua!ua&tit" used 23'000 ti.es the actua! price 1#77#

A&swer ) is correct# The efficie&c" ua&tit" orusage (aria&ce for direct .ateria!s eua!s sta&dardu&it price ti.es the differe&ce +etwee& actua! usagea&d the sta&dard usage for the actua! output# Accordi&g!"' the direct .ateria!s efficie&c" (aria&ce is;00 @ U[23'000 !+s# issued - 3 !+s# % 4'700 u&its]% 1#60V# The (aria&ce is u&fa(ora+!e +ecause actua!usage e%ceeded sta&dard usage#

A&swer C is i&correct +ecause 1'600 resu!ts fro.

.u!tip!"i&g the differe&ce +etwee& sta&dard ua&tit"that shou!d ha(e +ee& used for +udgeted productio&[3 % ;'000 O 2'000] a&d actua! ua&tit" used23'000 ti.es the sta&dard price 1#60#

A&swer , is i&correct +ecause 3'200 fa(ora+!eresu!ts fro. .u!tip!"i&g the differe&ce +etwee& theactua! ua&tit" purchased 27'000 a&d actua!ua&tit" used 23'000 ti.es the sta&dard price1#60#

[141] Source: CA 079 -42

A&swer A is i&correct +ecause the (aria&ce isu&fa(ora+!e#

A&swer ) is correct# The direct .ateria!s price(aria&ce eua!s the actua! price .i&us the sta&dardprice' ti.es the actua! ua&tit" used i& productio&#



The (aria&ce is 460'000 u&fa(ora+!e [2; - 2 %190'000]# The (aria&ce is u&fa(ora+!e +ecause theactua! price e%ceeded the sta&dard price#

A&swer C is i&correct +ecause 20'000 is thedirect .ateria!s efficie&c" (aria&ce#

A&swer , is i&correct +ecause 176'000 is thedirect !a+or rate (aria&ce#

[142] Source: CA 079 -43

A&swer A is i&correct +ecause 176'000 fa(ora+!eis the direct !a+or rate (aria&ce#

A&swer ) is correct# The direct .ateria!s efficie&c"(aria&ce eua!s the actua! ua&tit" .i&us the sta&dardua&tit"' ti.es sta&dard price# The (aria&ce is20'000 fa(ora+!e U[190'000 - 10 % 20'000] %2V# The (aria&ce is fa(ora+!e +ecause the actua!ua&tit" was !ess tha& the sta&dard ua&tit" a!!owedfor the actua! output#

A&swer C is i&correct +ecause the (aria&ce is

fa(ora+!e#

A&swer , is i&correct +ecause 460'000 is thedirect .ateria!s price (aria&ce#

[143] Source: CA 079 -4

A&swer A is i&correct +ecause 20'000 fa(ora+!eis the direct .ateria!s efficie&c" (aria&ce#

A&swer ) is i&correct +ecause the (aria&ce wasfa(ora+!e#

A&swer C is correct# The direct !a+or rate (aria&ceeua!s the actua! rate .i&us the sta&dard rate' ti.es

the actua! a.ou&t of !a+or used# The (aria&ce is176'000 fa(ora+!e [1; - 20 % 4;'000]# The(aria&ce is fa(ora+!e +ecause the actua! rate was !esstha& the sta&dard rate#

A&swer , is i&correct +ecause 0'000 resu!tsfro. .u!tip!"i&g the actua! u&its of output +" thediffere&ce +etwee& the actua! rate a&d sta&dard rate#

[14] Source: CA 11;9 F-14

A&swer A is i&correct +ecause the (aria&ce isu&fa(ora+!e#

A&swer ) is correct# The tota! direct !a+or (aria&ce

ca& +e iso!ated i&to the price (aria&ce a&d theefficie&c" (aria&ce# The !a+or price (aria&ce eua!sthe actua! price .i&us the sta&dard price' ti.es theactua! ua&tit"# Actua! price is ;#40 24';0 ・

3'200 hours# e&ce' the (aria&ce is 2'20 @[;#40 - ;#00 % 3'200]#

A&swer C is i&correct +ecause 3';0 eua!sactua! direct !a+or cost 24';0 .i&us the sta&darddirect !a+or cost of the +udgeted productio& 1'200 %2#7 hours % ;#

A&swer , is i&correct +ecause 7'600 u&fa(ora+!eis the direct !a+or efficie&c" (aria&ce#

[147] Source: CA 11;9 F-1;

A&swer A is i&correct +ecause 2'20 u&fa(ora+!eis the direct !a+or rate (aria&ce#

A&swer ) is i&correct +ecause the (aria&ce isu&fa(ora+!e#

A&swer C is correct# The direct !a+or efficie&c"(aria&ce eua!s actua! ua&tit" .i&us sta&dardua&tit"' ti.es the sta&dard price# The sta&dardua&tit" is the a.ou&t of sta&dard !a+or hoursreuired for the actua! good output achie(ed# Actua!!a+or hours eua!ed 3'200' sta&dard hours were2'700 1'000 u&its of output % 2#7 hours' a&d thesta&dard direct !a+or price was ;# e&ce' the !a+orefficie&c" (aria&ce was 7'600 @ [3'200 actua!hours - 2'700 sta&dard hours % ;]#

A&swer , is i&correct +ecause 6'090 eua!s thediffere&ce +etwee& actua! hours a&d sta&dard hoursfor the actua! output 3'200 - 2'700 O 400' ti.es theactua! direct !a+or cost per hour ;#40#

[146] Source: CA 0790 F-17

A&swer A is correct# The !a+or efficie&c" (aria&ceis 9;0 9';00 - ;';20# t is the differe&ce

+etwee& actua! a&d sta&dard hours .u!tip!ied +" thesta&dard !a+or rate#

A&swer ) is i&correct +ecause the !a+or rate(aria&ce is 200# t is the differe&ce +etwee& theactua! a&d sta&dard rates ti.e the actua! hours#

A&swer C is i&correct +ecause the (o!u.e (aria&ceis the differe&ce +etwee& +udgeted fi%ed o(erheada&d the a.ou&t app!ied +ased o& the sta&dard i&puta!!owed for the actua! output#

A&swer , is i&correct +ecause the ter. Lspe&di&g(aria&ceL is usua!!" app!ied to o(erhead (aria&ces#

[144] Source: CA 1190 F-7

A&swer A is i&correct +ecause .achi&e repairs i&a& auto.o+i!e factor" are usua!!" a& o(erheadi&direct cost#

A&swer ) is i&correct +ecause e!ectricit" i& a&e!ectro&ics p!a&t is usua!!" a& o(erhead i&directcost#

A&swer C is correct# ,irect costs are readi!"ide&tifia+!e with a&d attri+uta+!e to specific u&its ofproductio&# *ood is a raw .ateria! a direct cost offur&iture#

A&swer , is i&correct +ecause sa!es co..issio&s

are period costs# The" are &either direct &or i&directcosts of products#

[14;] Source: CA 1190 F-6

A&swer A is i&correct +ecause a+&or.a! spoi!age is&ot charged to o(erhead +ut is e%pe&sed#

A&swer ) is correct# Bactor" o(erhead co&sists ofa!! costs other tha& direct .ateria!s a&d direct !a+orthat are associated with the .a&ufacturi&g process#(erti.e pre.iu.s a.ou&ts i& e%cess of regu!arhour!" rates are usua!!" co&sidered a part ofo(erhead#

A&swer C is i&correct +ecause pri.e costs i&c!udedirect !a+or a&d direct .ateria!s' which are &ot partof o(erhead#



A&swer , is i&correct +ecause (aria&ces are usua!!"c!osed to cost of goods so!d or prorated at the e&d ofthe period to cost of goods so!d a&d i&(e&tor"#

[149] Source: CA 1191 F-17

A&swer A is i&correct +ecause '200 eua!s 12ti.es the differe&ce +etwee& actua! hours 6'600a&d the hours +udgeted for p!a&&ed output 7'000 %1#27 O 6'270#

A&swer ) is i&correct +ecause 3'000 eua!s 12ti.es 6'700 sta&dard hours for the actua! output.i&us 6'270 sta&dard hours for the +udgeted output#

A&swer C is i&correct +ecause 2'220 eua!sactua! cost .i&us +udgeted cost#

A&swer , is correct# The direct !a+or efficie&c"ua&tit" (aria&ce eua!s sta&dard price ti.es thediffere&ce +etwee& actua! a&d sta&dard a.ou&ts of!a+or hours# The sta&dard a.ou&t for the actua!output is 6'700 direct !a+or hours 1#27 ,K %7'200 u&its# The (aria&ce is 1'200 @ [6'700

sta&dard hours - 6'600 actua! hours % 12]#

[1;0] Source: CA 1191 F-16

A&swer A is i&correct +ecause the price (aria&ce is3'000 B a&d the ua&tit" (aria&ce is '000 @#

A&swer ) is i&correct +ecause the ua&tit" (aria&ceis '000 @#

A&swer C is correct# The direct .ateria!s purchaseprice (aria&ce is the differe&ce +etwee& the sta&dardprice per pou&d #00 a&d actua! price per pou&d294'000 ・47'000 O 3#96 ti.es the pou&ds ofdirect .ateria!s purchased for the .o&th# e&ce' the

price (aria&ce is 3'000 B [#00 - 3#96 % 47'000pou&ds]# The ua&tit" (aria&ce is the differe&ce+etwee& actua! usage of direct .ateria!s 40'000pou&ds a&d sta&dard usage of direct .ateria!s foractua! output 23'000 actua! u&its produced % 3pou&ds O 69'000 pou&ds (a!ued at the sta&dardprice per pou&d #00# The ua&tit" (aria&ce istherefore '000 @ [40'000 - 69'000 % ]#

A&swer , is i&correct +ecause the price (aria&ce is3'000 B#

[1;1] Source: CMA 06;3 -7

A&swer A is correct# & the !o&g ru&' these costs

shou!d +e the sa.e# & the short ru&' howe(er' the".a" differ +ecause sta&dard costs represe&t whatcosts shou!d +e' whereas +udgeted costs aree%pected actua! costs# )udgeted costs .a" (ar"wide!" fro. sta&dard costs i& certai& .o&ths' +ut' fora& a&&ua! +udget period' the a.ou&ts shou!d +esi.i!ar#

A&swer ) is i&correct +ecause sta&dard costs are&ot &ecessari!" deter.i&ed +" e&gi&eeri&g studies#

A&swer C is i&correct +ecause sta&dard costs areusua!!" +ased o& curre&t!" attai&a+!e sta&dardsapp!ica+!e whe& a process is u&der co&tro!# The" areset without regard to (aria&ces or s!ac#

A&swer , is i&correct +ecause +udgeted costsi&c!ude e%pected de(iatio&s fro. the sta&dards#

[1;2] Source: CA 0749 F-2

A&swer A is i&correct +ecause o&!" sig&ifica&t(aria&ces shou!d +e i&(estigated# A!so' the +e&efits ofeach step i& the e&tire sta&dard-cost process .ust +ecost effecti(e# )e&efits shou!d e%ceed costs#

A&swer ) is i&correct +ecause the tre&d of(aria&ces o(er ti.e shou!d +e co&sidered# A &egati(e(aria&ce that has +ee& getti&g progressi(e!" s.a!!er.a" &ot &eed i&(estigati&g' whereas a (aria&ce that isi&creasi&g shou!d +e i&(estigated pro.pt!"#

A&swer C is i&correct +ecause the o+>ecti(e of(aria&ce i&(estigatio& is pi&poi&ti&g respo&si+i!it" a&dtai&g correcti(e actio& toward e!i.i&ati&g (aria&ces#

A&swer , is correct# A (aria&ce shows a de(iatio&of actua! resu!ts fro. the e%pected or +udgetedresu!ts# A!! sig&ifica&t (aria&ces shou!d +ei&(estigated' whether fa(ora+!e or u&fa(ora+!e#

[1;3] Source: CA 11;4 -10

A&swer A is i&correct +ecause accou&ta+i!it" isadeuate!" esta+!ished +" the i&(e&tor" e&tries#

A&swer ) is i&correct +ecause (aria&ce e&triesca&&ot safeguard assets' the" ca& o&!" pro(idei&for.atio& for use i& co&tro!!i&g the cost ofproductio&#

A&swer C is i&correct +ecause i&ter&a! costaccou&ti&g i&for.atio& &eed &ot co.p!" with GAA#

A&swer , is correct# &e step i& the co&tro!process is .easure.e&t of actua! resu!ts agai&ststa&dards# Bor e%a.p!e' the sta&dard ua&tit" of.ateria!s for a gi(e& output is esta+!ished prior toproductio&# f the actua! .ateria!s usage e%ceeds the

sta&dard' the (aria&ce is u&fa(ora+!e a&d correcti(eactio& .a" +e &eeded#

[1;] Source: CA 07;2 F-22

A&swer A is i&correct +ecause' if .ateria!s do &ot.eet specificatio&s' .ore wi!! +e used a&d a&u&fa(ora+!e ua&tit" usage (aria&ce wi!! resu!t#

A&swer ) is i&correct +ecause .achi&er" that has&ot +ee& .ai&tai&ed proper!" is .ore !ie!" to rui&u&its of productio& a&d therefore reuire .ore.ateria!s to co.p!ete productio&#

A&swer C is correct# A& efficie&c"' or usage'

(aria&ce for .ateria!s occurs whe& usage differs fro.the sta&dard# @&fa(ora+!e (aria&ces occur whe&actua! usage is greater tha& sta&dard# Ka+or whosesi!! is co..e&surate with .ateria!s usage sta&dardsshou!d achie(e sta&dard .ateria!s usage< that is' !itt!eor &o (aria&ce shou!d arise#

A&swer , is i&correct +ecause schedu!i&g ofsu+sta&tia! o(erti.e ca& !ead to reduced ua!it" a&dthe &eed for .ore .ateria! to produce u&its torep!ace those u&its of u&accepta+!e ua!it"#


A&swer A is i&correct +ecause it states the

defi&itio& of the .ateria!s "ie!d (aria&ce#

A&swer ) is i&correct +ecause it defi&es the !a+or"ie!d (aria&ce#



A&swer C is correct# Materia!s "ie!d a&d .i%(aria&ces are the co.po&e&ts of the .ateria!s usage(aria&ce# The" are usefu! o&!" if certai& c!asses ort"pes of .ateria!s ca& +e su+stituted for each other#The .ateria!s .i% (aria&ce is ca!cu!ated to iso!ate theeffects of the cha&ge i& the .i% of .ateria!s used#Thus' it eua!s the su. of the products of thediffere&ce +etwee& the a.ou&t of each c!ass of.ateria!s actua!!" used a&d the sta&dard a.ou&ta!!owed ti.es the differe&ce +etwee& the +udgetedprice for that c!ass a&d the +udgetedweighted-a(erage .ateria!s cost for a!! .ateria!s i&the .i%# )ecause su+stituta+i!it" of .ateria!s .a" &ot+e possi+!e i& e(er" situatio&' the .ateria!s .i%(aria&ce is suita+!e for a&a!"sis o&!" whe& the.a&ager has so.e co&tro! o(er the co.positio& ofthe .i%#

A&swer , is i&correct +ecause the .i% (aria&ce is+ased o& +udgeted prices#


A&swer A is correct# The .ateria!s "ie!d (aria&ce isthe differe&ce +etwee& actua! i&put a&d the sta&dardi&put a!!owed' ti.es the +udgeted a(erage u&it price#The .ateria!s "ie!d (aria&ce is a ca!cu!atio& +ased o&the assu.ptio& that the sta&dard .i% was .ai&tai&edi& produci&g a gi(e& output#

A&swer ) is i&correct +ecause it states thedefi&itio& of the !a+or .i% (aria&ce#

A&swer C is i&correct +ecause it descri+es the!a+or "ie!d (aria&ce#

A&swer , is i&correct +ecause it defi&es the.ateria!s .i% (aria&ce#


A&swer A is i&correct +ecause the +udgetedweighted-a(erage !a+or rate .ust +e used' &ot the

+udgeted weighted-a(erage .ateria!s price#

A&swer ) is i&correct +ecause this for.u!a defi&esthe !a+or .i% (aria&ce#

A&swer C is correct# The !a+or "ie!d a&d !a+or .i%(aria&ces are the co.po&e&ts of the !a+or efficie&c"(aria&ce a!! price (aria&ces are e%c!uded# The !a+or"ie!d (aria&ce iso!ates the effect of usi&g .ore orfewer tota! u&its of !a+or# The sta&dard

weighted-a(erage !a+or rate is used# Ka+or "ie!d(aria&ces are +ased o& the assu.ptio&s that (ariousc!asses of !a+or are used ha(i&g differe&t !a+or ratesa&d that the" are partia!!" su+stituta+!e# The e" toa&a!"/i&g !a+or "ie!d (aria&ces is that the !a+or ratea&d the .i% of !a+or i&puts are he!d co&sta&t# The!a+or "ie!d (aria&ce eua!s the differe&ce +etwee& theactua! u&its of !a+or used a&d the sta&dard u&itsa!!owed for the actua! output' ti.es the sta&dardweighted-a(erage !a+or rate#

A&swer , is i&correct +ecause the !a+or "ie!d(aria&ce eua!s the differe&ce +etwee& the actua!u&its of !a+or used a&d the sta&dard u&its a!!owed forthe actua! output' ti.es the sta&dardweighted-a(erage !a+or rate#

[1;;] Source: u+!isher

A&swer A is i&correct +ecause this for.u!a defi&esthe .ateria!s "ie!d (aria&ce#

A&swer ) is correct# The !a+or .i% (aria&ce is thesu. of the products of the differe&ce +etwee& actua!a&d sta&dard hours for each c!ass of !a+or ti.es thediffere&ce +etwee& the +udgeted sta&dard for thatc!ass of !a+or a&d the weighted-a(erage sta&dard!a+or rate#

A&swer C is i&correct +ecause this is the euatio&for the !a+or "ie!d (aria&ce#

A&swer , is i&correct +ecause the !a+or .i%(aria&ce is +ased o& +udgeted rates#


A&swer A is correct# The !a+or "ie!d (aria&ce is theportio& of the !a+or efficie&c" (aria&ce attri+uta+!e tothe differe&ce +etwee& actua! hours a&d the sta&dardhours a!!owed# Tota! hours wored were 1'747 770N 670 N 347' a&d sta&dard hours a!!owed eua!ed1'700 700 N 700 N 700# The 47-hour differe&ce is

.u!tip!ied +" the weighted-a(erage sta&dard !a+orrate' which eua!s 6#64 U[700 % ; N 700 % 4N 700 % 7] ・1'700 sta&dard ,KV# Thus' the(aria&ce is 700 u&fa(ora+!e 6#64 % 47#

A&swer ) is i&correct +ecause the !a+or "ie!d(aria&ce is 700#

A&swer C is i&correct +ecause the differe&ce+etwee& the 1'747 A 770 N 670 N 347 a&d the1'700 S 700 N 700 N 700 .ust +e .u!tip!ied +"the 6#64 weighted-a(erage S? U[700 % ; N 700% 4 N 700 % 7] ・1'700 sta&dard ,KV#

A&swer , is i&correct +ecause 1'700 is threeti.es the actua! !a+or "ie!d (aria&ce of 700#


A&swer A is correct# The !a+or .i% (aria&ce is thesu. of the products of the differe&ce +etwee& actua!a&d sta&dard hours for each c!ass of !a+or ti.es the

differe&ce +etwee& the +udgeted sta&dard rate forthat c!ass of !a+or a&d the weighted-a(erage sta&dard!a+or rate#

Sta&dard Actua! )ud# Std#- C!ass ours ours Faria&ce *#A# Std# roduct ----- -------- ------ -------- ---------- --------- 700 770 - 70 N1#33 66#64 @

700 670 - 170 N #33 70#00 @ 700 347 N 127 -1#64 20;#33 @ --------- 327#00 @ OOOOOOOOO

A&swer ) is i&correct +ecause 66#64 is the !a+or(aria&ce for !a+or C!ass o&!"#

A&swer C is i&correct +ecause the !a+or .i%(aria&ce is the su. of the products of the differe&ce+etwee& actua! a&d sta&dard hours for each c!ass of!a+or ti.es the differe&ce +etwee& the a(eragesta&dard !a+or rate for that c!ass of !a+or#

A&swer , is i&correct +ecause 70#00 is the !a+or

(aria&ce for !a+or C!ass o&!"#




A&swer A is i&correct +ecause the tota! !a+or(aria&ce eua!s the !a+or efficie&c" a&d the !a+or rate(aria&ces#

A&swer ) is i&correct +ecause the !a+or rate(aria&ce is the (aria&ce of price of the !a+or#

A&swer C is correct# Ka+or .i% a&d !a+or "ie!d(aria&ces are the co.po&e&ts of the tota! !a+orefficie&c" (aria&ce# Bor e%a.p!e' if the !a+or "ie!d(aria&ce was 700 @ a&d the !a+or .i% (aria&ce was320 @' the tota! !a+or efficie&c" (aria&ce wou!d +e;20 @#

A&swer , is i&correct +ecause the efficie&c"(aria&ce is &ot !a+or (aria&ces#

[192] Source: CMA 12; -1

A&swer A is i&correct +ecause' +" defi&itio&' thetota! (aria+!e factor" E (aries with the acti(it"!e(e!' +ut tota! fi%ed E a&d u&it (aria+!e E do&ot#

A&swer ) is correct# The use of a productio&(o!u.e as the de&o.i&ator i& ca!cu!ati&g the factor"E rate has &o effect o& the fi%ed factor" E+udget (aria&ce# This (aria&ce is the differe&ce+etwee& actua! fi%ed costs a&d +udgeted !u.p su.fi%ed costs#

A&swer C is i&correct +ecause the fi%ed factor"E productio& (o!u.e (aria&ce is the differe&ce+etwee& +udgeted fi%ed E a&d fi%ed E app!ied+ased o& the predeter.i&ed rate# The o(era!! &etfi%ed factor" E (aria&ce is the differe&ce +etwee&the actua! fi%ed E a&d the fi%ed E app!ied +asedo& the predeter.i&ed rate#

A&swer , is i&correct +ecause the fi%ed factor"E productio& (o!u.e (aria&ce is the differe&ce+etwee& +udgeted fi%ed E a&d fi%ed E app!ied+ased o& the predeter.i&ed rate# The o(era!! &etfi%ed factor" E (aria&ce is the differe&ce +etwee&the actua! fi%ed E a&d the fi%ed E app!ied +asedo& the predeter.i&ed rate#

[193] Source: CMA 12; -2

A&swer A is i&correct +ecause sa!es (o!u.e isirre!e(a&t#

A&swer ) is i&correct +ecause the differe&ce+etwee& actua! direct !a+or hours a&d sta&dard direct

!a+or hours a!!owed is the +asis of the (aria+!e Eefficie&c" (aria&ce#

A&swer C is i&correct +ecause the differe&ce+etwee& fi%ed factor" E app!ied o& the +asis ofsta&dard a!!owed direct !a+or hours a&d the +udgetedfi%ed factor" E defi&es the tota! fi%ed E(aria&ce#

A&swer , is correct# A fi%ed E productio&(o!u.e (aria&ce is the differe&ce +etwee& the+udgeted fi%ed factor" E a&d the E app!ied+ased o& a predeter.i&ed rate a&d sta&dard direct!a+or hours a!!owed for the actua! output#

[19] Source: CMA 12; -

A&swer A is i&correct +ecause the sta&dard hours

a!!owed for the actua! u&its of fi&ished output is used'&ot the A#

A&swer ) is correct# Bi%ed factor" E i& asta&dard costi&g s"ste. is app!ied to the product+ased o& the predeter.i&ed E rate .u!tip!ied +"the sta&dard hours a!!owed for the actua! output#Thus' the app!ied fi%ed factor" E is !i.ited to thesta&dard a.ou&t#

A&swer C is i&correct +ecause the E app!icatio&is &ot +ased o& u&its of productio& for the A#

A&swer , is i&correct +ecause the app!ied fi%edfactor" E is !i.ited to the sta&dard a.ou&tdeter.i&ed usi&g the sta&dard E rate per ,K hour'&ot the actua! E cost per ,K hour#

[197] Source: CMA 1243 -13

A&swer A is i&correct +ecause a !a+or price(aria&ce ref!ects a differe&ce +etwee& the actua! priceof !a+or a&d the +udgeted price of !a+or' which isusefu! i&for.atio& for cost co&tro!#

A&swer ) is i&correct +ecause the .ateria!sua&tit" (aria&ce is the differe&ce +etwee& +udgeteda&d actua! .ateria!s used duri&g productio&# This isa& i.porta&t (aria&ce for cost co&tro!#

A&swer C is correct# The fi%ed E (o!u.e(aria&ce occurs whe& actua! acti(it" !e(e!s differ fro.a&ticipated !e(e!s# t is a& e%ce!!e&t e%a.p!e of costa!!ocatio& as opposed to cost co&tro!# @&!ie other(aria&ces' the (o!u.e (aria&ce does &ot direct!"ref!ect a differe&ce +etwee& actua! a&d +udgetede%pe&ditures# The eco&o.ic su+sta&ce of this(aria&ce !ies i& the costs or +e&efits of capacit" usageor &o&usage# Bor e%a.p!e' id!e capacit" resu!ts i& the!oss of the co&tri+utio& .argi& fro. u&its &ot

produced a&d so!d#

A&swer , is i&correct +ecause the differe&ce+etwee& actua! (aria+!e E a&d the product of theactua! i&put a&d the +udgeted (aria+!e E rate isusefu! i&for.atio& for cost co&tro!#

[196] Source: H#)# ?o.a!

A&swer A is i&correct +ecause 32'27 assu.es the(o!u.e (aria+!e was fa(ora+!e#

A&swer ) is i&correct +ecause the actua! .achi&ehours ca& +e fou&d +" usi&g the fo!!owi&g euatio&:Fo!u.e Faria&ce O )udgeted Bi%ed E - App!ied

Bi%ed E# The app!ied fi%ed E is eua! to theE rate .u!tip!ied +" the actua! hours# The E rateis fou&d +" di(idi&g the +udgeted E ;0'000 +"the +udgeted hours 32'000# Actua! .achi&e hoursare 31'746#

A&swer C is i&correct +ecause 32'000 eua!s the+udgeted .achi&e hours#

A&swer , is correct# The (o!u.e (aria&ce FFarises fro. the differe&ce +etwee& +udgeted fi%edE a&d the fi%ed E app!ied at the sta&dard rate+ased o& the sta&dard i&put a!!owed for actua!output# The E rate is 17 per .achi&e hour;0'000 ・32'000#

FF O )udgeted Bi%ed E - App!ied Bi%ed E 6'360 O ;0'000 - 17 % A 17 % A O ;0'000 - 6'360 A O 43'60 ・17



A O 31'746#

[194] Source: CMA 06;4 -14

A&swer A is i&correct +ecause super(isor sa!ariesare e%pected to +e i&curred u&ifor.!" through the"ear< thus' super(isor sa!aries are +ased o& ti.e' &otu&its produced#

A&swer ) is i&correct +ecause super(isor sa!ariesare e%pected to +e i&curred u&ifor.!" through the"ear< thus' super(isor sa!aries are +ased o& ti.e' &otu&its produced#

A&swer C is correct# The +udget spe&di&g(aria&ce for fi%ed E eua!s actua! .i&us +udgetedfi%ed E# The 32'000 cost of super(isor" sa!ariesis fi%ed a&d is i&curred at 24'000 per .o&th# Thus'the (aria&ce is the differe&ce +etwee& actua! costs of2;'000 a&d the +udgeted costs of 24'000' or1'000 u&fa(ora+!e#

A&swer , is i&correct +ecause the actua! E2;'000 was greater tha& the +udgeted E

32'000 ・12 .o&ths O 24'000< therefore' the(aria&ce is u&fa(ora+!e#

[19;] Source: K#H# McCarth"

A&swer A is i&correct +ecause 13#00 per ,M isthe (aria+!e E rate per .achi&e hour# The sta&dardE rate a!so i&c!udes the fi%ed E rate#

A&swer ) is i&correct +ecause 1#32 per ,M isthe fi%ed E rate per .achi&e hour# The sta&dardE rate per .achi&e hour i&c!udes the (aria+!e rateper ,M#

A&swer C is correct# The tota! E euatio& is

" O 132'000 N 13,M This euatio& is deri(ed +" su..i&g i&di(idua! E

ite.s# The fi%ed portio& &eeds to +e co&(erted to arate +" di(idi&g it +" &or.a! capacit"# Thus' the fi%edE rate is 1#32 132'000 ・100'000# Toca!cu!ate the tota! E rate' the fi%ed rate is added tothe (aria+!e rate# e&ce' the tota! E rate per ,Mis 1#32 1#32 N 13#00#

A&swer , is i&correct +ecause 13#46 per ,M isthe actua! tota! E rate tota! actua! cost ・actua!hours#

[199] Source: K#H# McCarth"

A&swer A is i&correct +ecause the sta&dard Erate is .u!tip!ied +" the 9'000 ,M a!!owed &ot9;'400 actua! ,M for the 23'700 eui(a!e&t u&itsof productio&#

A&swer ) is i&correct +ecause 1'32'000 is forthe origi&a! 100'000 ,M +udgeted' &ot the 9'000,M +udgeted for the productio& of 23'700 u&its#

A&swer C is i&correct +ecause 1'37;'270 is thetota! actua! E#

A&swer , is correct# & a sta&dard-cost s"ste.'E is app!ied usi&g the sta&dard acti(it" a!!owed foractua! productio&# The sta&dard acti(it" a!!owed is

the sta&dard acti(it" per eui(a!e&t u&it ti.es theactua! productio&' or 9'000 hours ,M %23'700# The E app!ied is 1'36'0;0 9'000 %

1#32#

[200] Source: K#H# McCarth"

A&swer A is correct# The tota! E (aria&ce is theo(er- or u&derapp!ied E' that is' the differe&ce+etwee& app!ied E a&d the actua! E# Theapp!ied E was deter.i&ed to +e 1'36'0;0# Theactua! E is 1'37;'270 133'270 N 1'227'000#Co&seue&t!"' the a.ou&t of u&derapp!ied E is12'140 @ 1'37;'270 - 1'36'0;0#

A&swer ) is i&correct +ecause the app!ied E is1'36'0;0' which is +ased o& the +udgeted ,Mfor the eui(a!e&t u&its of productio&' &ot o& theactua! ,M#

A&swer C is i&correct +ecause the app!ied E is1'36'0;0' which is +ased o& the +udgeted ,Mfor the eui(a!e&t u&its of productio&' &ot o& theactua! ,M# Burther.ore' +ecause the actua! E isgreater tha& the E app!ied' the u&derapp!ied Eresu!ts i& a& u&fa(ora+!e (aria&ce#

A&swer , is i&correct +ecause 43'470 fa(ora+!eassu.es that sta&dard i&put for the actua! output was100'000 ,M a&d that o(erhead app!ied wastherefore 1'32'000#

[201] Source: CA 11;6 F-12

A&swer A is i&correct +ecause the sa!es .i%(aria&ce is u&affected +" a cha&ge i& o(era!! sa!es(o!u.e' assu.i&g the proportio&s of products so!dre.ai& co&sta&t# owe(er' a& u&fa(ora+!e sa!esua&tit" (aria&ce wi!! arise gi(e& a 78 decrease i&o(era!! sa!es (o!u.e +ecause a 78 decrease i&co&tri+utio& .argi& wi!! occur# This (aria&ce isco.puted +" ho!di&g the sa!es .i%' +udgeted prices'

a&d +udgeted costs co&sta&t# t .easures the cha&gei& co&tri+utio& .argi& caused +" a cha&ge i& o(era!!(o!u.e#

A&swer ) is i&correct +ecause the (aria&ce wi!! +eu&fa(ora+!e#

A&swer C is correct# The sa!es .i% (aria&ce is asu. of (aria&ces# Bor each product i& the .i%' thediffere&ce +etwee& u&its so!d a&d e%pected to +eso!d is .u!tip!ied +" the differe&ce +etwee& the+udgeted @CM for the product a&d the +udgetedweighted-a(erage @CM for a!! products# The resu!tsof these co.putatio&s are the& added to deter.i&ethe .i% (aria&ce# This (aria&ce .easures the effect ofthe cha&ge i& the weighted-a(erage @CM associated

with the cha&ges i& the ua&tities of ite.s i& the .i%#The sa!es .i% (aria&ce is fa(ora+!e whe& .ore u&itswith a higher tha& a(erage @CM are so!d or whe&fewer u&its with a !ower tha& a(erage @CM are so!d#

A&swer , is i&correct +ecause this euatio& defi&esthe .ateria!s .i% (aria&ce#

[202] Source: CA 11;7 F-12

A&swer A is correct# The sa!es price (aria&ce is thediffere&ce +etwee& actua! price a&d +udgeted price'ti.es actua! u&its# Actua! price was 11#70 92'000・;'000# )udgeted price was 10#70 107'000 ・

10'000# Sa!es price (aria&ce is therefore ;'000

[11#70 - 10#70 % ;'000 actua! u&its]# The(aria&ce is fa(ora+!e +ecause actua! sa!es price wasgreater tha& +udgeted sa!es price#



A&swer ) is i&correct +ecause the sa!es price(aria&ce is +ased o& the actua! u&its so!d rather tha&the +udgeted sa!es#

A&swer C is i&correct +ecause the sa!es price(aria&ce is the differe&ce +etwee& the 11#70 actua!sa!es price 92'000 ・;'000 a&d the 10#70+udgeted sa!es price 107'000 ・10'000' ti.es the;'000 u&its so!d#

A&swer , is i&correct +ecause the sa!es price(aria&ce is the differe&ce +etwee& the 11#70 actua!sa!es price 92'000 ・;'000 a&d the 10#70+udgeted sa!es price 107'000 ・10'000' ti.es the;'000 u&its so!d#

[203] Source: CA 1190 F-1;

A&swer A is i&correct +ecause the sa!es-(o!u.e(aria&ce is the differe&ce +etwee& the f!e%i+!e-+udgetco&tri+utio& .argi& 110'000 a&d the.aster-+udget a.ou&t 120'000# The 10'000(aria&ce is u&fa(ora+!e +ecause the f!e%i+!e-+udgeta.ou&t is !ess tha& the .aster-+udget co&tri+utio&

.argi&#

A&swer ) is correct# The sa!es-(o!u.e (aria&ce isthe differe&ce +etwee& the f!e%i+!e-+udgetco&tri+utio& .argi& a&d the static .aster +udgetco&tri+utio& .argi&# ts co.po&e&ts are the sa!esua&tit" a&d sa!es .i% (aria&ces# The co&tri+utio&.argi& is used rather tha& operati&g i&co.e +ecausefi%ed costs are the sa.e i& +oth +udgets# @&it sa!esprice a&d (aria+!e cost are he!d co&sta&t so as toiso!ate the effect of the differe&ce i& u&it sa!es (o!u.e#)ecause the f!e%i+!e-+udget co&tri+utio& .argi&110'000 is !ess tha& the .aster-+udget a.ou&t120'000' the (aria&ce 10'000 is u&fa(ora+!e#

A&swer C is i&correct +ecause 11'000 is the

differe&ce +etwee& actua! a&d f!e%i+!e (aria+!e costs#The sa!es-(o!u.e (aria&ce is the differe&ce +etwee&the f!e%i+!e-+udget co&tri+utio& .argi& 110'000a&d the .aster-+udget a.ou&t 120'000# The10'000 (aria&ce is u&fa(ora+!e +ecause thef!e%i+!e-+udget a.ou&t is !ess tha& the .aster-+udgetco&tri+utio& .argi&#

A&swer , is i&correct +ecause 12'000 is thediffere&ce +etwee& the f!e%i+!e-+udget re(e&ue220'000 a&d the actua! re(e&ue 20;'000# Thesa!es-(o!u.e (aria&ce is .easured as the differe&ce+etwee& the f!e%i+!e-+udget co&tri+utio& .argi& a&dthe .aster-+udget co&tri+utio& .argi&#

[20] Source: CA 07;9 F-1

A&swer A is correct# The sa!es ua&tit" (aria&ce isthe differe&ce +etwee& the actua! (o!u.e a&d the+udgeted (o!u.e i& u&its' ti.es the +udgetedweighted-a(erage co&tri+utio& .argi& for a!! u&its#

ﾚｿ

ｳ Actua! )udgeted ｳ )udgeted *t#-A(g# Sa!es ｳ - ｳ Q Co&tri+utio& O =ua&tit" ｳ Fo!u.e Fo!u.e ｳ Margi& Faria&ce ﾀﾙ

2'000 - 0'000 Q 6 - 3#70 O 7'000 B

A&swer ) is i&correct +ecause the +udgeted se!!i&g

price a&d +udgeted (aria+!e cost .ust +e used todeter.i&e the sa!es ua&tit" (aria&ce' &ot the actua!se!!i&g price a&d actua! (aria+!e cost#

A&swer C is i&correct +ecause the +udgeted(aria+!e cost .ust +e su+tracted fro. the se!!i&g price+efore .u!tip!"i&g +" the 2'000 differe&ce i& u&itsactua!!" so!d fro. +udgeted sa!es#

A&swer , is i&correct +ecause the sa!es ua&tit"(aria&ce is fou&d +" .u!tip!"i&g the 2'000 u&itdiffere&ce +etwee& actua! a&d +udgeted sa!es +" the2#70 +udgeted co&tri+utio& .argi&#


A&swer A is i&correct +ecause a ua&tit" &otprice (aria&ce shou!d +e de+ited &ot credited#

A&swer ) is i&correct +ecause this e&tr" records a&u&fa(ora+!e price' &ot ua&tit"' (aria&ce#

A&swer C is correct# The e&tr" to record direct.ateria!s used is to charge * for the sta&dardua&tit" reuisitio&ed ti.es the sta&dard u&it price100 u&its % Eu&it O 00# &(e&tor" wi!! +ecredited for the actua! ua&tit" reuisitio&ed ti.es thesta&dard u&it price' or 720 130 % # *he& actua!

ua&tit" used e%ceeds sta&dard ua&tit" a!!owed' a&u&fa(ora+!e direct .ateria!s ua&tit" (aria&ce resu!ts#The (aria&ce accou&t shou!d +e charged de+ited forthe 120 differe&ce 30 e%tra u&its % sta&dard u&itcost#

A&swer , is i&correct +ecause the (aria&ce isu&fa(ora+!e a&d shou!d +e de+ited#


A&swer A is correct# The >our&a! e&tr" to recordthe ad>ust.e&t of BG i&(e&tor" for e%ter&a! reporti&gpurposes is to charge the BG i&(e&tor" ad>ust.e&taccou&t for the desired a.ou&t a&d to credit fi%ed

E# To a(oid a!teratio& of the i&(e&tor" accou&ts'the ad>ust.e&t is tae& to a& ad>ust.e&t accou&t#

A&swer ) is i&correct +ecause costs are &ottra&sferred fro. * to E#

A&swer C is i&correct +ecause de+iti&g a&ad>ust.e&t accou&t a(oids a!teratio& of the i&(e&tor"accou&ts#

A&swer , is i&correct +ecause this e&tr" represe&tsthe tra&sfer of co.p!eted u&its to BG#


A&swer A is i&correct +ecause the &et (aria&ce isfa(ora+!e a&d shou!d +e credited to i&co.e su..ar"#

A&swer ) is i&correct +ecause this e&tr" does &otc!ose the (aria&ce accou&t# Moreo(er' the &et(aria&ce is 1'337#

A&swer C is correct# The e&tr" to record thec!osi&g of a& u&fa(ora+!e (aria+!e E spe&di&g(aria&ce a&d a fa(ora+!e (aria+!e E efficie&c"(aria&ce is to de+it the !atter a&d credit the for.er#The differe&ce +etwee& the two accou&ts ca& +echarged or credited to CGS or to i&co.e su..ar"# A fa(ora+!e &et (aria&ce of 1'337 is the resu!t1'600 B - 267 @ O 1'337 B# The &et fa(ora+!e(aria&ce is credited to i&co.e su..ar" or a!!ocated

a.o&g CGS a&d the i&(e&tories#

A&swer , is i&correct +ecause the spe&di&g(aria&ce is u&fa(ora+!e a&d was i&itia!!" de+ited#



C!osi&g the accou&t therefore reuires a credit#


A&swer A is i&correct +ecause o&!" the wages paidto the .achi&e operator are direct!" ide&tifia+!e withthe productio& of specific fi&ished goods#

A&swer ) is correct# ,irect !a+or costs are wagespaid to !a+or that ca& +e specifica!!" ide&tified withthe productio& of fi&ished goods# )ecause the wagesof a factor" .achi&e operator are ide&tifia+!e with afi&ished product' the wages are a direct !a+or cost#)ecause a super(isor5s or (ice-preside&t5s sa!ar" is&ot ide&tifia+!e with the productio& of specific fi&ishedgoods' it is a part of factor" o(erhead a&d &ot adirect !a+or cost#

A&swer C is i&correct +ecause o&!" the wages paidto the .achi&e operator are direct!" ide&tifia+!e withthe productio& of specific fi&ished goods#

A&swer , is i&correct +ecause o&!" the wages paidto the .achi&e operator are direct!" ide&tifia+!e with

the productio& of specific fi&ished goods#


A&swer A is i&correct +ecause 230'000 i&c!udesthe sa!aries of .achi&er" .echa&ics a&d factor"super(isors#

A&swer ) is i&correct +ecause 207'000 i&c!udesthe sa!aries of factor" super(isors#

A&swer C is i&correct +ecause 140'000 i&c!udesthe sa!aries of .achi&er" .echa&ics#

A&swer , is correct# ,irect !a+or costs are wages

paid to !a+or that ca& feasi+!" +e specifica!!"ide&tified with the productio& of fi&ished goods#)ecause the wages of .achi&e operators areide&tifia+!e with the productio& of fi&ished goods'their 17'000 of sa!aries are a direct !a+or cost#owe(er' +ecause the sa!aries a&d wages of thefactor" super(isors a&d .achi&er" .echa&ics are &otide&tifia+!e with the productio& of fi&ished goods'their 60'000 a&d 27'000 of sa!aries are &ot direct!a+or costs#


A&swer A is i&correct +ecause 23'000 i&c!udesfactor" o(erhead#

A&swer ) is correct# roduct costs ca& +eassociated with a specific product# roduct costsi&c!ude direct .ateria!s a&d direct !a+or# Bactor"o(erhead ca&&ot +e traced to specific products a&dtherefore is a!!ocated to a!! products produced# Thus'the a.ou&t of costs tracea+!e to specific products i&the productio& process is 22;'000 120'000 N10;'000#

A&swer C is i&correct +ecause 120'000 e%c!udesdirect !a+or#

A&swer , is i&correct +ecause 10;'000 e%c!udesdirect .ateria!s#


A&swer A is i&correct +ecause 30'000 represe&ts

the i&crease i& Hu&e5s i&(e&tor" a&d does &ot i&c!udethe 200'000 used i& productio&#

A&swer ) is i&correct +ecause 140'000 su+tractsthe i&crease i& direct .ateria!s i&(e&tor"#

A&swer C is i&correct +ecause 200'000 e%c!udesthe i&crease i& direct .ateria!s i&(e&tor"#

A&swer , is correct# ,irect .ateria!s costs are thecosts of &ew .ateria!s i&c!uded i& fi&ished goods thatca& +e feasi+!" traced to those goods# The +egi&&i&gdirect .ateria!s i&(e&tor"' p!us the direct .ateria!spurchases' .i&us e&di&g direct .ateria!s i&(e&tor"eua!s the direct .ateria!s cost# )ecause the direct.ateria!s i&(e&tor" i&creased duri&g the .o&th' thei&crease ca& +e added to the direct .ateria!s used todeter.i&e the a.ou&t of purchases# Thus' the direct.ateria!s purchases for the .o&th were 230'000200'000 N 30'000#


A&swer A is i&correct +ecause fi%ed .a&ufacturi&g

o(erhead is treated as a period cost u&der directcosti&g# Se!!i&g costs are period costs u&der +othdirect a&d a+sorptio& costi&g#

A&swer ) is i&correct +ecause fi%ed .a&ufacturi&go(erhead is treated as a period cost u&der directcosti&g# Se!!i&g costs are period costs u&der +othdirect a&d a+sorptio& costi&g#

A&swer C is i&correct +ecause fi%ed .a&ufacturi&go(erhead is treated as a period cost u&der directcosti&g# Se!!i&g costs are period costs u&der +othdirect a&d a+sorptio& costi&g#

A&swer , is correct# roduct costs are i&curred to

produce u&its of output# The" are e%pe&sed whe& theproduct is so!d# Such costs i&c!ude direct .ateria!s'direct !a+or' a&d factor" &ot ge&era! a&dad.i&istrati(e o(erhead# eriod costs are charged toe%pe&se as i&curred +ecause the" are &ot ide&tifia+!ewith a product# Faria+!e costi&g co&siders o&!"(aria+!e .a&ufacturi&g costs to +e product costs#Bi%ed .a&ufacturi&g costs are co&sidered periodcosts a&d are e%pe&sed as i&curred# Se!!i&g costs are

period costs u&der +oth direct a&d a+sorptio&costi&g# Thus' the e&tire 227'000 170'000 N47'000 is c!assified as period costs#


A&swer A is i&correct +ecause the spe&di&g(aria&ce' &ot the (o!u.e (aria&ce' is usefu! i&detecti&g short-ter. pro+!e.s i& the co&tro! ofo(erhead costs#

A&swer ) is i&correct +ecause the spe&di&g(aria&ce' &ot the (o!u.e (aria&ce' is usefu! i&detecti&g short-ter. pro+!e.s i& the co&tro! ofo(erhead costs#

A&swer C is correct# The (o!u.e (aria&ce is thediffere&ce +etwee& tota! +udgeted fi%ed o(erheada&d tota! fi%ed o(erhead a+sor+ed app!ied# t is a.easure of the use of capacit"' &ot of the differe&ce+etwee& +udgeted a&d actua! costs# owe(er' the

spe&di&g (aria&ce is the differe&ce +etwee& actua!o(erhead i&curred a&d the f!e%i+!e +udget a.ou&t forthe actua! i&put# & four-wa" a&a!"sis of o(erhead(aria&ces' the spe&di&g (aria&ce is di(ided i&to fi%ed



a&d (aria+!e co.po&e&ts# Co&seue&t!"' theco.po&e&ts of the spe&di&g (aria&ce' &ot the (o!u.e(aria&ce' are usefu! i& detecti&g short-ter. pro+!e.si& the co&tro! of o(erhead costs#

A&swer , is i&correct +ecause the spe&di&g(aria&ce' &ot the (o!u.e (aria&ce' is usefu! i&detecti&g short-ter. pro+!e.s i& the co&tro! ofo(erhead costs#


A&swer A is i&correct +ecause o(erhead (aria&cesare +" defi&itio& affected +" acti(ities outside theproductio& area#

A&swer ) is i&correct +ecause the efficie&c" ofe.p!o"ees affects the !a+or efficie&c" (aria&ce#

A&swer C is correct# The .ateria!s usage (aria&ceis t"pica!!" i&f!ue&ced .ost +" acti(ities withi& theproductio& depart.e&t# t is the (aria&ce .ostco&tro!!a+!e +" a productio& .a&ager#

A&swer , is i&correct +ecause the o(erhead(o!u.e (aria&ce .easures the effect of &ot operati&gat the +udgeted acti(it" !e(e!# t is the !eastco&tro!!a+!e +" a productio& .a&ager#


A&swer A is correct# The spe&di&g (aria&ce is thediffere&ce +etwee& the actua! tota! o(erhead a&d thesu. of +udgeted fi%ed o(erhead a&d the (aria+!eo(erhead +udgeted for the actua! i&put# The tota!actua! o(erhead is 10'000 106'270 N 33'470#The su. of +udgeted fi%ed o(erhead a&d (aria+!eo(erhead +udgeted for the actua! i&put is 131'270100'000 N 31'270# Thus' the tota! spe&di&g

(aria&ce is ;'470 10'000 - 131'270# The(aria&ce is u&fa(ora+!e +ecause the actua! o(erheade%ceeds the +udgeted o(erhead#

A&swer ) is i&correct +ecause 6'270 is thediffere&ce +etwee& the actua! a&d +udgeted (aria+!eo(erhead#

A&swer C is i&correct +ecause 3'470 is thediffere&ce +etwee& the fi%ed a&d (aria+!eco.po&e&ts of the (aria&ce#

A&swer , is i&correct +ecause 2'700 is thediffere&ce +etwee& the actua! a&d +udgeted fi%edo(erhead#


A&swer A is i&correct +ecause 2'070 uses theactua! !a+or price#

A&swer ) is correct# The direct !a+or efficie&c"ua&tit" (aria&ce eua!s sta&dard price ti.es thediffere&ce +etwee& actua! a&d sta&dard a.ou&ts of!a+or hours# The sta&dard price is 10 per hour# Theactua! a.ou&t of !a+or hours is 3'200 hours# Thesta&dard a.ou&t of !a+or hours is 3'000 2 hours %1'700 u&its# Thus' the direct !a+or efficie&c" (aria&ceis 2'000 [10 % 3'200 - 3'000]# The (aria&ce isu&fa(ora+!e +ecause .ore !a+or hours were usedtha& the sta&dard#

A&swer C is i&correct +ecause 1'270 is thediffere&ce +etwee& the direct !a+or efficie&c"(aria&ce a&d the product of the cost differe&ce #27

a&d the sta&dard hours a!!owed#

A&swer , is i&correct +ecause 1'200 is thediffere&ce +etwee& the !a+or efficie&c" a&d rate(aria&ces#


A&swer A is i&correct +ecause a& u&fa(ora+!e(aria+!e o(erhead efficie&c" (aria&ce e%ists#

A&swer ) is correct# The (aria+!e o(erheadefficie&c" (aria&ce eua!s the sta&dard (aria+!eo(erhead rate ti.es the differe&ce +etwee& the actua!i&put a&d the sta&dard i&put a!!owed for the actua!output# The sta&dard rate for (aria+!e o(erhead is 2per direct !a+or hour# Actua! direct !a+or hours are2'700# Sta&dard !a+or hours are 2'000 ;'000u&its % 3 hours per u&it# Thus' the (aria+!e o(erheadefficie&c" (aria&ce is 1'000 [2 % 2'700 -2'000]# The (aria&ce is u&fa(ora+!e +ecause actua!hours e%ceeded sta&dard hours#

A&swer C is i&correct +ecause 2'000 is the tota!

(aria+!e o(erhead (aria&ce actua! o(erhead .i&usthe o(erhead rate app!ied to the sta&dard hours#

A&swer , is i&correct +ecause 3'000 is thediffere&ce +etwee& actua! (aria+!e o(erhead a&d theproduct of the sta&dard rate a&d the actua! i&put the(aria+!e o(erhead spe&di&g (aria&ce# This (aria&ceis fa(ora+!e#


A&swer A is correct# A sta&dard-cost s"ste.records the product at sta&dard predeter.i&edcosts a&d co.pares e%pected with actua! cost# Thisco.pariso& a!!ows de(iatio&s (aria&ces fro.

e%pected resu!ts to +e ide&tified a&d i&(estigated# Asta&dard-cost s"ste. ca& +e used i& >o+-order'process-costi&g' a&d acti(it"-+ased s"ste.s to iso!ate(aria&ces#

A&swer ) is i&correct +ecause sta&dard costs .a"+e used i& a&" product costi&g s"ste.#

A&swer C is i&correct +ecause sta&dard costs .a"+e used i& a&" product costi&g s"ste.#

A&swer , is i&correct +ecause sta&dard costs .a"+e used i& a&" product costi&g s"ste.#


A&swer A is correct# A f!e%i+!e +udget is a set ofstatic +udgets prepared i& a&ticipatio& of (ar"i&g!e(e!s of acti(it"# @&!ie a static +udget' the use of af!e%i+!e +udget per.its effecti(e e(a!uatio& of actua!resu!ts whe& actua! a&d e%pected productio& differ#Setti&g cost sta&dards faci!itates preparatio& of af!e%i+!e +udget# Bor e%a.p!e' a sta&dard u&it (aria+!ecost is usefu! i& deter.i&i&g the tota! (aria+!e cost fora gi(e& output#

A&swer ) is i&correct +ecause sta&dard costi&g a&df!e%i+!e +udgeti&g are the .ost appropriatetech&iues#

A&swer C is i&correct +ecause sta&dard costi&g

a&d f!e%i+!e +udgeti&g are the .ost appropriatetech&iues#

A&swer , is i&correct +ecause sta&dard costi&g



a&d f!e%i+!e +udgeti&g are the .ost appropriatetech&iues#


A&swer A is i&correct +ecause a price (aria&ce isthe differe&ce +etwee& the e%pected a&d actua!out!a"s caused +" a (ariatio& i& price#

A&swer ) is i&correct +ecause the co.+i&edprice-ua&tit" (aria&ce is the tota! actua! out!a"

actua! ua&tit" % actua! price .i&us the +udgetedout!a" sta&dard price % sta&dard ua&tit"#

A&swer C is correct# The (o!u.e (aria&ce is thediffere&ce +etwee& +udgeted fi%ed o(erhead a&d thea.ou&t app!ied +ased o& the sta&dard o(erhead ratea&d sta&dard i&put for the actua! output#

A&swer , is i&correct +ecause a .i% (aria&ceresu!ts whe& the actua! sa!es or productio& .i% differsfro. the +udgeted .i%#


A&swer A is i&correct +ecause e&gi&eeri&g isrespo&si+!e for desig&' e&gi&eeri&g' a&d ua!it"sta&dards#

A&swer ) is i&correct +ecause productio& isrespo&si+!e for .ateria!s usage#

A&swer C is correct# ?espo&si+i!it" for (aria&cesshou!d +ear so.e re!atio&ship to the decisio& a&dco&tro! processes used# Materia!s price prices shou!d+e the respo&si+i!it" of purchasi&g .a&age.e&t#

A&swer , is i&correct +ecause sa!es has

respo&si+i!it" for .areti&g' &ot purchasi&g#


A&swer A is correct# The .ateria!s price (aria&ce isca!cu!ated +" .u!tip!"i&g the differe&ce +etwee&actua! price a&d sta&dard price +" the actua! u&itspurchased# The .ateria!s usage (aria&ce is ca!cu!ated+" .u!tip!"i&g the differe&ce +etwee& the actua! usagea&d the sta&dard usage +" the sta&dard price# Thus'the sta&dard u&it cost is used to co.pute +oth(aria&ces#

A&swer ) is i&correct +ecause direct .ateria!s a&ddirect !a+or (aria&ces are +ased o& sta&dard costs#

A&swer C is i&correct +ecause direct .ateria!s a&ddirect !a+or (aria&ces are +ased o& sta&dard costs#

A&swer , is i&correct +ecause direct .ateria!s a&ddirect !a+or (aria&ces are +ased o& sta&dard costs#


A&swer A is i&correct +ecause the direct .ateria!sprice (aria&ce is fou&d +" .u!tip!"i&g the actua!ua&tit" 2;'000 ti.es the differe&ce +etwee& the A 2#00 a&d the S 2#20#

A&swer ) is i&correct +ecause the direct .ateria!s

price (aria&ce is fou&d +" .u!tip!"i&g the actua!ua&tit" 2;'000 ti.es the differe&ce +etwee& the A 2#00 a&d the S 2#20#

A&swer C is correct# The direct .ateria!s price(aria&ce is fou&d +" .u!tip!"i&g the differe&ce+etwee& the actua! price A of direct .ateria!s a&dthe sta&dard price S per u&it +" the actua! ua&tit"A=#

A=A - S O MF 2;'0002#00 - 2#20 O 7'600 fa(ora+!e

A&swer , is i&correct +ecause 2'200 u&fa(ora+!eis the usage (aria&ce#


A&swer A is i&correct +ecause the 1#7 "ards ofgood output shou!d +e di(ided &ot .u!tip!ied +"478 to deter.i&e the sta&dard "ards of .ateria! peru&it#

A&swer ) is i&correct +ecause 3#00 is the cost peru&it e%c!udi&g spoi!age#

A&swer C is i&correct +ecause 3#47 is fou&d +"addi&g 278 of the .ateria!s of the fi&ished product

as spoi!age a&d the& .u!tip!"i&g +" the 2#00 cost per"ard [1#7 % 1#27 % 2]#

A&swer , is correct# f 1#7 "ards re.ai& i& eachu&it after spoi!age of 278 of the direct .ateria!si&put' the tota! per u&it i&put .ust ha(e +ee& 2 "ards1#7 ・478# The sta&dard u&it direct .ateria!s costis therefore #00 2 "ards % 2#


A&swer A is i&correct +ecause the ua&tit" usage(aria&ce is a direct .ateria!s (aria&ce that is &otaffected +" o(erti.e wages#

A&swer ) is correct# (erti.e pre.iu.s arisi&gfro. a hea(" o(era!! (o!u.e of wor rather tha& fro.the reuire.e&ts of a specific >o+ are dee.ed toapp!" to a!! productio&# e&ce' the" are treated asi&direct costs a&d assig&ed to o(erhead#

A&swer C is i&correct +ecause the !a+or efficie&c"(aria&ce co&cer&s a.ou&ts of !a+or' &ot rates#

A&swer , is i&correct +ecause o(erti.e wages do&ot affect the "ie!d (aria&ce#


A&swer A is i&correct +ecause '96 was

deter.i&ed usi&g a& actua! rate of 7#;;#

A&swer ) is correct# The direct !a+or rate (aria&ceis deter.i&ed +" .u!tip!"i&g the differe&ce +etwee&the actua! a&d sta&dard rates +" the actua! hours# Thesta&dard rate eua!s the direct !a+or efficie&c"(aria&ce di(ided +" the differe&ce +etwee& the actua!a&d sta&dard hours# The actua! rate eua!s the tota!direct !a+or pa"ro!! di(ided +" the actua! hours#

3';0 ・1'200 - 2'000 O #;0 S? 24'200 ・1'200 O 6#00 A? ----- 1#20 diff# %1'200 A -------

,K rate (aria&ce O 9'0 @ OOOOOOO




A&swer , is i&correct +ecause the 70'00 resu!tsfro. .u!tip!"i&g 1#20 +" sta&dard hours 2'000#


A&swer A is i&correct +ecause 4#69 resu!ts fro.treati&g the #76 (aria&ce per u&it as u&fa(ora+!e a&dsu+tracti&g it fro. the A? of ;#27#

A&swer ) is i&correct +ecause actua! hours' &otsta&dard hours' are used to deter.i&e the S?#Burther.ore' the fa(ora+!e (aria&ce shou!d +eadded' &ot su+tracted' i& ca!cu!ati&g the sta&dardrate#

A&swer C is i&correct +ecause ;#27 is the actua!rate#

A&swer , is correct# The direct !a+or rate (aria&ceeua!s actua! hours ti.es the differe&ce +etwee& theactua! a&d sta&dard rates# *he& the (aria&ce is

fa(ora+!e' the sta&dard rate e%ceeds the actua! ratea&d the fo!!owi&g euatio& is used:

AS? - A? O fa(ora+!e rate (aria&ce 10'000S? - ;#27 O 7'600 B S? - ;#27 O #76 S? O ;#;1


A&swer A is i&correct +ecause the 220 hourdiffere&ce +etwee& A a&d S shou!d &ot +esu+tracted fro. the sta&dard hours a!!owed#

A&swer ) is i&correct +ecause the e%cess hours

shou!d +e deter.i&ed usi&g the sta&dard' &ot theactua!' rate per hour' a&d the resu!t shou!d +e addedto' &ot i&correct!" su+tracted fro.' sta&dard hoursa!!owed#

A&swer C is i&correct +ecause e%cess hours shou!d+e deter.i&ed usi&g the sta&dard' &ot the actua!' rateper hour#

A&swer , is correct# The sta&dard hours a!!owedeua!ed 3'000' a&d the !a+or efficie&c" (aria&ce was1';40 u&fa(ora+!e< that is' actua! hours e%ceededsta&dard hours# The !a+or efficie&c" (aria&ce eua!sthe sta&dard rate ;#70 ti.es the e%cess hours#Gi(e& that the (aria&ce is 1';40' 220 e%cess hours1';40 ・;#70 .ust ha(e +ee& wored# Thus'

3'220 actua! hours 3'000 sta&dard N 220 e%cesswere wored#


A&swer A is correct# *he& the actua! direct !a+orrate is u&&ow&' the tota! direct !a+or pa"ro!! ca& +efou&d +" .u!tip!"i&g the actua! hours +" the sta&dardrate' the& su+tracti&g the fa(ora+!e !a+or (aria&ce#

32'000 % 7#0 - 6'420 O 17'760

A&swer ) is i&correct +ecause the tota! 6'420 ,Krate (aria&ce' &ot the ,K rate (aria&ce per sta&dardhour ti.es the actua! ,K hours' shou!d +e su+tracted

i& the ca!cu!atio&#

A&swer C is i&correct +ecause the tota! 6'420 ,Krate (aria&ce' &ot the ,K rate (aria&ce per sta&dard

hour ti.es the actua! ,K hours' shou!d +e used i&ca!cu!ati&g the pa"ro!!# Burther.ore' a fa(ora+!e ,Krate (aria&ce shou!d +e su+tracted fro.' &ot addedto' the sta&dard ,K costs a!!owed for hours wored#

A&swer , is i&correct +ecause the 6'420 ,K rate(aria&ce is fa(ora+!e' a&d shou!d therefore +esu+tracted fro.' &ot added to' the sta&dard pa"ro!!for the hours wored#


A&swer A is correct# The hour!" wage per woreris 17#00 600 ・0 hours# The direct !a+or costper hour is 1;#00 [17#00 % 1#0 N +e&efits eua! to208 of wages]# Co&seue&t!"' the sta&dard direct!a+or cost per u&it is 7 1; % 3 hours#

A&swer ) is i&correct +ecause the wee!" wagesa&d +e&efits per worer 600 % 1#2 shou!d +edi(ided +" 0 hours per wee' &ot +" 60 worers todeter.i&e the direct !a+or cost per hour#

A&swer C is i&correct +ecause 30 resu!ts fro.

o.itti&g the e.p!o"ee +e&efits 208 of wages fro.the ca!cu!atio&#

A&swer , is i&correct +ecause 1;#00 is the ,Kcost per hour#


A&swer A is i&correct +ecause the (o!u.e (aria&ceco&sists of fi%ed o(erhead o&!"' a&d the efficie&c"(aria&ce' which co&sists of (aria+!e o(erhead o&!"' is&ot iso!ated i& two-wa" a&a!"sis#

A&swer ) is i&correct +ecause the (o!u.e (aria&ceco&sists of fi%ed o(erhead o&!"' a&d the efficie&c"

(aria&ce' which co&sists of (aria+!e o(erhead o&!"' is&ot iso!ated i& two-wa" a&a!"sis#

A&swer C is correct# & two-wa" a&a!"sis' the tota!o(erhead (aria&ce fi%ed N (aria+!e is co.posed ofthe (o!u.e (aria&ce tota! fi%ed o(erhead cost+udgeted - fi%ed o(erhead app!ied +ased o& sta&dardi&put a!!owed for the actua! output a&d theco&tro!!a+!e +udget (aria&ce the differe&ce+etwee& the tota! actua! o(erhead a&d the (o!u.e(aria&ce# Co&seue&t!"' the co&tro!!a+!e +udget(aria&ce co&tai&s +oth fi%ed a&d (aria+!e e!e.e&ts#

A&swer , is i&correct +ecause the (o!u.e (aria&ceco&sists of fi%ed o(erhead o&!"' a&d the efficie&c"

(aria&ce' which co&sists of (aria+!e o(erhead o&!"' is&ot iso!ated i& two-wa" a&a!"sis#


A&swer A is i&correct +ecause a +udget a!!owa&ce+ased o& actua! i&put is &ot used i& the co.putatio&of the co&tro!!a+!e (aria&ce#

A&swer ) is i&correct +ecause a +udget a!!owa&ce+ased o& actua! i&put is &ot used i& the co.putatio&

of the co&tro!!a+!e (aria&ce#

A&swer C is correct# & two-wa" a&a!"sis' the tota!

o(erhead (aria&ce fi%ed N (aria+!e is co.posed ofthe (o!u.e (aria&ce tota! fi%ed o(erhead cost+udgeted - fi%ed o(erhead app!ied +ased o& sta&dardi&put a!!owed for the actua! output a&d the



co&tro!!a+!e +udget (aria&ce the differe&ce+etwee& the tota! actua! o(erhead a&d the (o!u.e(aria&ce# e&ce' the co&tro!!a+!e +udget (aria&ceis the su. of 1 the differe&ce +etwee& actua! a&d+udgeted fi%ed o(erhead a&d 2 the differe&ce+etwee& actua! (aria+!e o(erhead a&d the (aria+!eo(erhead +udgeted +ased o& the sta&dard i&puta!!owed for the actua! output#

A&swer , is i&correct +ecause a +udget a!!owa&ce+ased o& app!ied fi%ed o(erhead is used to deter.i&ethe (o!u.e (aria&ce#


A&swer A is correct# & three-wa" a&a!"sis' thespe&di&g (aria&ce is the differe&ce +etwee& actua!tota! o(erhead a&d the su. of the +udgeted!u.p-su. fi%ed o(erhead a&d the (aria+!e o(erhead+udgeted for the actua! i&put at the sta&dard rate# tco.+i&es the (aria+!e o(erhead spe&di&g a&d thefi%ed o(erhead +udget spe&di&g (aria&ces used i&four-wa" a&a!"sis#

A&swer ) is i&correct +ecause a +udget a!!owa&ce+ased o& actua! i&put a&d the actua! factor" o(erheadare used i& the co.putatio& of the spe&di&g (aria&ce# A +udget a!!owa&ce +ased o& sta&dard i&put is usedto ca!cu!ate the efficie&c" (aria&ce i& a three-wa"a&a!"sis#

A&swer C is i&correct +ecause a +udget a!!owa&ce+ased o& actua! i&put a&d the actua! factor" o(erheadare used i& the co.putatio& of the spe&di&g (aria&ce# A +udget a!!owa&ce +ased o& sta&dard i&put is usedto ca!cu!ate the efficie&c" (aria&ce i& a three-wa"a&a!"sis#

A&swer , is i&correct +ecause a +udget a!!owa&ce+ased o& actua! i&put a&d the actua! factor" o(erhead

are used i& the co.putatio& of the spe&di&g (aria&ce# A +udget a!!owa&ce +ased o& sta&dard i&put is usedto ca!cu!ate the efficie&c" (aria&ce i& a three-wa"a&a!"sis#


A&swer A is i&correct +ecause 134'700 eua!ssta&dard (aria+!e o(erhead app!ied#

A&swer ) is i&correct +ecause 146'270 resu!tsfro. su+tracti&g the 2'700 o(erhead (aria&ce#

A&swer C is correct# The app!ied factor" o(erheadeua!s the sta&dard i&put a!!owed for actua! output

.u!tip!ied +" the tota! sta&dard o(erhead rate perhour#

24'7007#00 F N 1#70 B O 14;'470

A&swer , is i&correct +ecause 1;2'000 is +asedo& the actua! ,K wored#


A&swer A is correct# (erhead was +udgeted at476'000 +ased o& a +udgeted !a+or cost of32'000 4#20 % 60'000 hours# Thus' 1#47 ofo(erhead was app!ied for each 1 of !a+or cost#Gi(e& actua! !a+or costs of 70'000' 4;4'700

1#47 % 70'000 of o(erhead was app!ied duri&gthe period# Actua! o(erhead was 447'000' so12'700 4;4'700 - 447'000 was o(erapp!ied#

A&swer ) is i&correct +ecause 1;'000 is thediffere&ce +etwee& +udgeted direct !a+or cost at60'000 direct !a+or hours a&d actua! direct !a+or cost70'000 - 32'000#

A&swer C is i&correct +ecause 19'000 is thediffere&ce +etwee& +udgeted o(erhead 476'000a&d the actua! o(erhead 447'000#

A&swer , is i&correct +ecause 34'000 is the su.of the differe&ce +etwee& +udgeted o(erhead476'000 a&d the actua! o(erhead 447'000 a&dthe differe&ce +etwee& the app!ied o(erhead4;4'700 a&d the +udgeted o(erhead 476'000#


A&swer A is i&correct +ecause 2;'700 assu.es afi%ed o(erhead app!icatio& rate of 7#47#

A&swer ) is i&correct +ecause 2;'700 assu.es afi%ed o(erhead app!icatio& rate of 7#47#

A&swer C is correct# The tota! o(erhead (aria&ce is

the differe&ce +etwee& the actua! o(erhead a&dapp!ied a+sor+ed o(erhead# Gi(e& that &either fi%ed&or (aria+!e o(erhead differed fro. +udgeteda.ou&ts' the o&!" (aria&ce was caused +" u&der- oro(era+sorptio& of fi%ed o(erhead# The (aria+!eo(erhead rate does &ot (ar" with the capacit"# Thefi%ed o(erhead rate at 908 capacit" is

1'000 fi%ed o(erhead ----------------------- O #00 36'000 ,K Gi(e& that the actua! capacit" achie(ed was 478'

a&d that 30'000 sta&dard hours were a!!owed'120'000 30'000 % #00 of fi%ed o(erhead wasapp!ied# Thus' 2'000 1'000 B -120'000 was u&dera+sor+ed#

A&swer , is i&correct +ecause the o(erhead(aria&ce for the "ear is 2'000 u&dera+sor+ed' &oto(era+sor+ed#


A&swer A is correct# Two-wa" a&a!"sis co.puteso&!" two o(erhead (aria&ces: the +udgetco&tro!!a+!e (aria&ce a&d the (o!u.e (aria&ce# Theproduct of the (aria+!e o(erhead rate a&d thesta&dard direct !a+or hours a!!owed for capacit"attai&ed is the +udgeted (aria+!e o(erhead# The+udgeted fi%ed o(erhead is the& added to the+udgeted (aria+!e o(erhead' gi(i&g the tota! +udgeted

o(erhead for the sta&dard i&put a!!owed for actua!output# The differe&ce +etwee& the actua! o(erheada&d +udgeted tota! o(erhead is the +udgetco&tro!!a+!e (aria&ce# Actua! o(erhead eua!s220'700# )udgeted (aria+!e o(erhead eua!s 2per hour 42'000 ・36'000 ,K# Thus' +udgeted(aria+!e o(erhead +ased o& sta&dard hours a!!owedeua!s 63'000 2 % 31'700 ,K# The tota!+udgeted o(erhead is 227'000 63'000 N162'000 B# The (aria&ce is '700 fa(ora+!e227'000 - 220'700 +ecause +udgeted o(erheade%ceeds actua! o(erhead#

A&swer ) is i&correct +ecause 4'700 is +ased o&the ,K wored 33'000#

A&swer C is i&correct +ecause 4'700 is +ased o&the ,K wored 33'000#

A&swer , is i&correct +ecause 13'700 is +ased



o& &or.a! capacit" of 36'000 ,K#


A&swer A is i&correct +ecause 9'660 is +ased o&sta&dard' &ot actua!' hours#

A&swer ) is i&correct +ecause ;'270 resu!ts fro.usi&g actua! fi%ed o(erhead to ca!cu!ate +udgetedo(erhead#

A&swer C is correct# Three-wa" a&a!"sis of(aria&ce co.+i&es the fi%ed o(erhead +udgetspe&di&g a&d (aria+!e o(erhead spe&di&g (aria&cesof four-wa" a&a!"sis of (aria&ce# t i&c!udes spe&di&g'efficie&c"' a&d (o!u.e (aria&ces# The spe&di&g(aria&ce is the differe&ce +etwee& the actua!o(erhead i&curred a&d the +udgeted o(erhead for theactua! i&put#

)udgeted o(erhead [10'700 N 7'270 % 3#;0] 30'70 Actua! o(erhead 22'700 ------ 4'970 B

OOOOOO

A&swer , is i&correct +ecause the spe&di&g(aria&ce is fa(ora+!e#


A&swer A is correct# Two-(aria&ce a&a!"sisco&siders o&!" +udget co&tro!!a+!e a&d (o!u.e(aria&ces# *he& actua! a&d +udgeted fi%ed o(erheadare eua!' the +udget co&tro!!a+!e (aria&ce eua!sthe differe&ce +etwee& actua! (aria+!e o(erhead a&dsta&dard hours a!!owed ti.es the (aria+!e o(erheadrate per hour# Thus' the (aria&ce is 3'000 fa(ora+!e[9'700 % 6 - 29'000]# A fa(ora+!e (aria&ce

resu!ts whe& actua! is !ess tha& sta&dard#

A&swer ) is i&correct +ecause 6'000 resu!ts fro.usi&g actua! ,K#

A&swer C is i&correct +ecause 9'000 is thediffere&ce +etwee& sta&dard a&d actua! ,K' ti.esthe (aria+!e o(erhead rate per hour#

A&swer , is i&correct +ecause 9'000 is thediffere&ce +etwee& sta&dard a&d actua! ,K' ti.esthe (aria+!e o(erhead rate per hour#


A&swer A is i&correct +ecause 13'00 eua!s"ear 2 sa!es .i&us ;78 of "ear 1 sa!es#

A&swer ) is i&correct +ecause 12'760 eua!s"ear 2 sa!es .i&us ;78 of "ear 2 sa!es#

A&swer C is i&correct +ecause 1'000 eua!s178 of "ear 1 sa!es#

A&swer , is correct# Gi(e& a 178 decrease i&prices' "ear 2 sa!es were ;78 of "ear 2 sa!es at "ear1 prices# e&ce' "ear 2 sa!es at "ear 1 prices eua!1'11;'11; 970'00 ・;78# Sa!es a&d grossprofit were 164'41; 1'11;'11; - 970'00!ower +ecause of the decrease i& prices#

[21] Source: CMA 069 3-20

A&swer A is i&correct +ecause the productio&

.a&ager has &o co&tro! o(er the priced paid for

.ateria!s#

A&swer ) is i&correct +ecause the cost accou&ti&g.a&ager has &o co&tro! o(er the priced paid for.ateria!s#

A&swer C is i&correct +ecause the sa!es .a&agerhas &o co&tro! o(er the priced paid for .ateria!s#

A&swer , is correct# The .ateria!s price (aria&ce isthe differe&ce +etwee& the sta&dard price a&d theactua! price paid for .ateria!s# This (aria&ce is usua!!"the respo&si+i!it" of the purchasi&g depart.e&t# Thus'the purchasi&g .a&ager has a& i&ce&ti(e to o+tai& the+est price possi+!e#

[22] Source: CMA 0697 3-26

A&swer A is i&correct +ecause 12'000 assu.esthat a!! costs are (aria+!e#

A&swer ) is i&correct +ecause 19'200 is +ased o&actua! (aria+!e costs#

A&swer C is i&correct +ecause 30'000 is +asedo& actua! sa!es re(e&ues#

A&swer , is correct# A f!e%i+!e +udget isfor.u!ated for se(era! differe&t acti(it" !e(e!s# Assu.i&g that u&it sa!es price 100'000 ・10'000u&its O 10 a&d (aria+!e costs of sa!es 60'000 ・

10'000 u&it O 6 a&d tota! fi%ed costs 30'000 do&ot cha&ge' a f!e%i+!e +udget .a" +e prepared for theactua! sa!es !e(e! 12'000 u&its# e&ce' the +udgetedco&tri+utio& .argi& sa!es - (aria+!e costs of sa!eseua!s ;'000 [12'000 u&its % 10 - 12'000 u&its% 6]# The operati&g i&co.e is therefore 1;'000;'000 CM - 30'000 BC#

[23] Source: CMA 0697 3-24

A&swer A is i&correct +ecause the f!e%i+!e +udget(aria&ce is 11'200 fa(ora+!e 29'200 actua!operati&g i&co.e - 1;'000 f!e%i+!e +udget operati&gi&co.e#

A&swer ) is i&correct +ecause the sa!es price(aria&ce is 12'000 [132'000 actua! sa!es - 10 %12'000 u&its so!d]#

A&swer C is correct# The sa!es (o!u.e (aria&ce isthe cha&ge i& co&tri+utio& .argi& caused +" thediffere&ce +etwee& the actua! a&d +udgeted (o!u.e#t eua!s the +udgeted u&it co&tri+utio& .argi& ti.es

the differe&ce +etwee& actua! a&d e%pected (o!u.e'or ;'000 [10 - 6 % 12'000 - 10'000]# Thesa!es (o!u.e (aria&ce is fa(ora+!e +ecause actua!sa!es e%ceeded +udgeted sa!es#

A&swer , is i&correct +ecause the tota! pro>ected(aria+!e costs at the actua! sa!es !e(e! eua! 42'00012'000 u&its % 6# Thus' the (aria+!e cost (aria&ceis 1'200 fa(ora+!e 42'000 - 40';00 actua!#


A&swer A is i&correct +ecause product costs&or.a!!" i&c!ude +oth (aria+!e a&d fi%ed costs#

A&swer ) is i&correct +ecause product costs&or.a!!" i&c!ude +oth fi%ed a&d (aria+!e costs#

A&swer C is correct# Sta&dard costs are e%pected



or attai&a+!e costs# Dor.a!!"' the sta&dard costsesta+!ished are those e%pected to +e actua!!"i&curred' &ot those ref!ecti&g a& idea! efficie&c" !e(e!#

A&swer , is i&correct +ecause a >oi&t cost is thecost of produci&g two or .ore i&separa+!e products#


A&swer A is correct# A respo&si+i!it" accou&ti&gs"ste. shou!d ha(e certai& co&tro!s that pro(ide forfeed+ac reports i&dicati&g de(iatio&s fro.e%pectatio&s# Ma&age.e&t .a" the& focus o& thosede(iatio&s e%ceptio&s for either rei&force.e&t orcorrectio&#

A&swer ) is i&correct +ecause the respo&si+i!it"accou&ti&g s"ste. shou!d &ot +e used e%c!usi(e!" toassess +!a.e#

A&swer C is i&correct +ecause the respo&si+i!it"accou&ti&g s"ste. shou!d &ot +e used e%c!usi(e!" togi(e rewards#

A&swer , is i&correct +ecause feed+ac reportsco&ce&trate o& de(iatio&s' +ut &ot to the tota!e%c!usio& of other +udgeted (aria+!es#

[26] Source: CMA 1291 3-11

A&swer A is i&correct +ecause sta&dard costs aredeter.i&ed i&depe&de&t!" of the +udget#

A&swer ) is correct# Sta&dard costs arepredeter.i&ed' attai&a+!e u&it costs# Sta&dard costs"ste.s iso!ate de(iatio&s (aria&ces of actua! fro.e%pected costs# &e ad(a&tage of sta&dard costs isthat the" faci!itate f!e%i+!e +udgeti&g# Accordi&g!"'sta&dard a&d +udgeted costs shou!d &ot differ whe&

sta&dards are curre&t!" attai&a+!e# owe(er' i&practice' +udgeted esti.ated actua! costs .a" differfro. sta&dard costs whe& operati&g co&ditio&s are&ot e%pected to ref!ect those a&ticipated whe& thesta&dards were de(e!oped#

A&swer C is i&correct +ecause +udgeted costs aree%pected future costs' &ot historica! costs#

A&swer , is i&correct +ecause +udgeted a&dsta&dard costs shou!d i& pri&cip!e +e the sa.e' +ut i&practice the" wi!! differ whe& sta&dard costs are &ote%pected to +e curre&t!" attai&a+!e#

[24] Source: CMA 0693 3-2

A&swer A is i&correct +ecause practica! sta&dardsare .ore appropriate tha& idea! sta&dards forpurposes of cash +udgeti&g' product costi&g' a&ddepart.e&ta! perfor.a&ce +udgeti&g# @&der o&ei&terpretatio& of the ter.' practica! sta&dards are thee%pected resu!ts#

A&swer ) is i&correct +ecause practica! sta&dardse&courage e.p!o"ees to wor di!ige&t!" +ut do &otreuire perfect efficie&c"# Thus' e.p!o"ees are !ess!ie!" to +e frustrated +" a& i&a+i!it" to reacho+>ecti(es tha& if idea! sta&dards were set#

A&swer C is correct# ractica! or curre&t!"attai&a+!e sta&dards .a" +e defi&ed as the

perfor.a&ce that is reaso&a+!" e%pected to +eachie(ed with a& a!!owa&ce for &or.a! spoi!age'waste' a&d dow&ti.e# A& a!ter&ati(e i&terpretatio& isthat practica! sta&dards represe&t possi+!e +ut difficu!t

to attai& resu!ts# The use of practica! sta&dards does&ot' howe(er' &egate the &eed to ad>ust sta&dards ifwori&g co&ditio&s cha&ge#

A&swer , is i&correct +ecause practica! sta&dardsref!ect e%pectatio&s or at !east sta&dards that are.ore !ie!" to +e attai&a+!e tha& idea! sta&dards#Co&seue&t!"' u&fa(ora+!e (aria&ces i&dicate thatoperatio&s ha(e &ot +ee& &or.a!!" efficie&t a&deffecti(e#

[2;] Source: CMA 129 3-23

A&swer A is i&correct +ecause e.p!o"ees .a" &otcooperate with sta&dards +ased o& idea!perfor.a&ce< attai&a+!e sta&dards are usua!!" +etterfor .oti(atio&a! purposes#

A&swer ) is i&correct +ecause &or.a! capacit" .a"&ot +e sufficie&t to co&tro! productio& i&efficie&cies#

A&swer C is i&correct +ecause historica!perfor.a&ce .a" &ot a!wa"s +e a guide to futureperfor.a&ce' a&d sta&dards shou!d +e +ased o&

a&ticipated future co&ditio&s#

A&swer , is correct# Sta&dards .ust +e accepted+" those who wi!! carr" the. out if the" are to ha(e.a%i.u. effecti(e&ess# Su+ordi&ates shou!d +e!ie(ethat sta&dards are +oth fair a&d achie(a+!e< otherwisethe" .a" te&d to sa+otage' ig&ore' or circu.(e&tthe.# Sta&dard costs are ofte& +ased o& the resu!tsof ti.e a&d .otio& studies' or other t"pes ofe&gi&eeri&g sta&dards#

[29] Source: CA 0797 -2

A&swer A is i&correct +ecause' i& M)' a.a&ager a&d hisEher su+ordi&ates >oi&t!" for.u!ate the

su+ordi&ates5 o+>ecti(es a&d the p!a&s for attai&i&gthe.#

A&swer ) is i&correct +ecause' i& a respo&si+i!it"accou&ti&g s"ste.' .a&agers are e(a!uated o&!" o&the +asis of factors the" co&tro!#

A&swer C is i&correct +ecause +e&ch.ari&g is thepractice of ide&tif"i&g' stud"i&g' a&d +ui!di&g upo& the+est practices i& the i&dustr" or i& the wor!d#

A&swer , is correct# Ma&age.e&t +" e%ceptio&gi(es sig&ifica&t atte&tio& o&!" to those areas i& which.ateria! (aria&ces fro. e%pectatio&s occur#Co&seue&t!"' .a&age.e&t focuses resources wherethe greatest retur&s fro. super(isor" effort .a" +e

achie(ed#

[270] Source: CMA 1297 3-6

A&swer A is i&correct +ecause the productio&(o!u.e (aria&ce eua!s u&der-or o(erapp!ied fi%edfactor" o(erhead#

A&swer ) is correct# A f!e%i+!e +udget is a series ofse(era! +udgets prepared for .a&" !e(e!s of acti(it"# A f!e%i+!e +udget a!!ows ad>ust.e&t of the +udget tothe actua! !e(e! +efore co.pari&g the +udgeted a&dactua! resu!ts# The differe&ce +etwee& the f!e%i+!e+udget a&d actua! figures is &ow& as the f!e%i+!e+udget (aria&ce#

A&swer C is i&correct +ecause the sa!es (o!u.e(aria&ce is the differe&ce +etwee& the f!e%i+!e +udgeta.ou&t a&d the static +udget a.ou&t#



A&swer , is i&correct +ecause a sta&dard cost(aria&ce is &ot &ecessari!" +ased o& a f!e%i+!e +udget#

[271] Source: CMA 0696 3-22

A&swer A is i&correct +ecause 1'377 is thea.ou&t of the .ateria!s price (aria&ce#

A&swer ) is i&correct +ecause 1'377 is thea.ou&t of the .ateria!s price (aria&ce#

A&swer C is correct# The .ateria!s ua&tit"(aria&ce eua!s the sta&dard price ti.es thediffere&ce +etwee& the actua! a&d sta&dard ua&tities#e&ce' the fa(ora+!e .ateria!s ua&tit" (aria&ce is'970 [1#70 sta&dard % 1'670 u&its % 60 sta&dardpou&ds - 7; actua! pou&ds]#

A&swer , is i&correct +ecause a fa(ora+!e (aria&cee%ists# The sta&dard a.ou&t for the actua! outpute%ceeded the actua! a.ou&t#

[272] Source: CMA 0696 3-23

A&swer A is correct# The .ateria!s price (aria&ceeua!s the actua! ua&tit" used ti.es the differe&ce+etwee& the actua! a&d sta&dard price per u&it# Thus'the u&fa(ora+!e .ateria!s price (aria&ce is 1'377[7; actua! pou&ds % 1'670 u&its % 1#67 actua! price- 1#70 sta&dard price]#

A&swer ) is i&correct +ecause 1';70 is +ased o&the sta&dard u&it ua&tit"' &ot the actua! ua&tit"#

A&swer C is i&correct +ecause the price (aria&ce isu&fa(ora+!e# The actua! price is greater tha& thesta&dard price#

A&swer , is i&correct +ecause 1';70 is +asedo& the sta&dard u&it ua&tit"' &ot the actua! ua&tit"#

[273] Source: CMA 0696 3-1

A&swer A is i&correct +ecause 1'920 is thea.ou&t of the f!e%i+!e +udget o(erhead (aria&ce#

A&swer ) is correct# The !a+or rate (aria&ce eua!sthe actua! hours used ti.es the differe&ce +etwee&the actua! a&d sta&dard rates# Co&seue&t!"' the!a+or rate (aria&ce is /ero [3#1 actua! hours % 1'670u&its % 12 per hour sta&dard rate - 12 per houractua! rate]#

A&swer C is i&correct +ecause '970 is thea.ou&t of the ua&tit" (aria&ce#

A&swer , is i&correct +ecause '970 is thea.ou&t of the ua&tit" (aria&ce#

[27] Source: CMA 0696 3-27

A&swer A is i&correct +ecause 3'240 is thef!e%i+!e +udget a.ou&t for a& output of 1';00 u&its#

A&swer ) is i&correct +ecause 3'240 is thef!e%i+!e +udget a.ou&t for a& output of 1';00 u&its#

A&swer C is i&correct +ecause a fa(ora+!e (aria&ce

e%ists# Actua! o(erhead is !ess tha& the sta&dardo(erhead at the actua! productio& !e(e!#

A&swer , is correct# The f!e%i+!e +udget o(erhead

(aria&ce is the differe&ce +etwee& actua! o(erheadcosts a&d the f!e%i+!e +udget a.ou&t for the actua!output# Sta&dard tota! fi%ed costs at a&" !e(e! ofproductio& are 24'000# Sta&dard (aria+!e o(erheadis 9 per u&it 3 % 3 !a+or hours# Thus' tota!sta&dard (aria+!e o(erhead is 1';70 for the actua!output 9 % 1'670 u&its' a&d the tota! f!e%i+!e+udget a.ou&t is 1';70 24'000 B N1';70 F# Accordi&g!"' the fa(ora+!e f!e%i+!e+udget (aria&ce is 1'920 1';70 f !e%i+!e +udgeta.ou&t - 39'930 actua! a.ou&t#

[277] Source: CMA 1296 3-21

A&swer A is correct# A .ateria!s price (aria&ce isthe differe&ce +etwee& the actua! a&d sta&dardprices' ti.es the actua! ua&tit"# t is &or.a!!"co&sidered the respo&si+i!it" of the purchasi&g.a&ager +ecause &o o&e e!se has a& opportu&it" toi&f!ue&ce the price# & this case' the purchasi&g.a&ager o+tai&ed the discou&t that !ed to thefa(ora+!e price (aria&ce#

A&swer ) is i&correct +ecause a& i&(e&tor"

super(isor has &o i&f!ue&ce o(er the price paid for.ateria!s#

A&swer C is i&correct +ecause the (ice preside&trecei(es the .ateria!s without &owi&g the price#

A&swer , is i&correct +ecause the e&gi&eeri&g.a&ager is co&cer&ed o&!" with the ua!it" of the.ateria!s#

[276] Source: CMA 1296 3-23

A&swer A is correct# The purpose of ide&tif"i&g a&dassig&i&g respo&si+i!it" for (aria&ces is to deter.i&ewho is !ie!" to ha(e i&for.atio& that wi!! e&a+!e

.a&age.e&t to fi&d so!utio&s# The co&structi(eapproach is to pro.ote !ear&i&g a&d co&ti&uousi.pro(e.e&t i& .a&ufacturi&g operatio&s' &ot toassig& +!a.e# owe(er' i&for.atio& a+out (aria&ces.a" +e usefu! i& e(a!uati&g .a&agers5 perfor.a&ce#

A&swer ) is i&correct +ecause' depe&di&g o& acost-+e&efit deter.i&atio&' (aria&ces either aread>ust.e&ts of cost of goods so!d or are a!!ocateda.o&g the i&(e&tor" accou&ts a&d cost of goodsso!d# Moreo(er' the accou&ti&g issues are disti&ctfro. super(isor" co&sideratio&s#

A&swer C is i&correct +ecause se!!i&g prices are+ased o& .uch .ore tha& the cost of productio&< fori&sta&ce' co.petiti(e pressure is a!so a co&sideratio&#

A&swer , is i&correct +ecause' +" itse!f' pi&poi&ti&gfau!t is &ot a& appropriate o+>ecti(e# Co&ti&uousi.pro(e.e&t is the u!ti.ate o+>ecti(e#

[274] Source: CMA 1296 3-2

A&swer A is i&correct +ecause the sa!es .a&agerdid &ot .ae the su+stitutio& decisio&#

A&swer ) is i&correct +ecause the i&(e&tor"super(isor did &ot .ae the su+stitutio& decisio&#

A&swer C is i&correct +ecause the productio&.a&ager did &ot .ae the su+stitutio& decisio&#

A&swer , is correct# A& u&fa(ora+!e direct !a+orefficie&c" (aria&ce is &or.a!!" charged to theproductio& .a&ager' the perso& with the .ost co&tro!



o(er the a.ou&t a&d i&ds of direct !a+or used#owe(er' that i&di(idua! is &ot respo&si+!e# Shewas to!d to use the &o&co&for.i&g part that reuirede%tra !a+or ti.e# Thus' the (aria&ce shou!d +echarged to the (ice preside&t of productio&' thei&di(idua! who .ost i&f!ue&ced the i&curre&ce of thecost#

[27;] Source: CMA 0694 3-22

A&swer A is i&correct +ecause 12 is the sta&dardcost#

A&swer ) is i&correct +ecause 12#01 is +ased o&the +udgeted usage#

A&swer C is i&correct +ecause 12#2 eua!s the60'000 sta&dard cost for 7'000 u&its di(ided +"'900 u&its#

A&swer , is correct# ,i(idi&g the actua! cost of60'027 +" the '900 u&its used resu!ts i& a& a(eragecost of 12#27 per u&it#

[279] Source: CMA 0694 3-23

A&swer A is i&correct +ecause a price (aria&cee%ists# The actua! price paid was greater tha& thesta&dard a!!owed#

A&swer ) is i&correct +ecause the (aria&ce isu&fa(ora+!e#

A&swer C is correct# The price (aria&ce eua!s theactua! ua&tit" ti.es the differe&ce +etwee& the actua!price a&d the sta&dard price# The actua! price is12#27' a&d the sta&dard price is 12 gi(e&# Thus'the price (aria&ce is 1'227 u&fa(ora+!e ['900 u&its% 12#27 actua! - 12#00 sta&dard]#

A&swer , is i&correct +ecause the (aria&ce isu&fa(ora+!e#

[260] Source: CMA 0694 3-27

A&swer A is i&correct +ecause the tota! factorproducti(it" is .easured i& u&its of output per do!!arof i&put#

A&swer ) is i&correct +ecause the tota! factorproducti(it" is .easured i& u&its of output per do!!arof i&put#

A&swer C is correct# Tota! factor producti(it"

eua!s u&its of output di(ided +" the cost of a!! i&puts#t (aries with output !e(e!s' i&put prices' i&putua&tities' a&d i&put .i%# e&ce' the tota! factorproducti(it" eua!s 0#27 u&its per do!!ar i&put U1'700u&its ・[70 pou&ds of A % 1#70 N 300 pou&dsof P % 2#47 N 300 hours % 17]V#

A&swer , is i&correct +ecause 0#33 u&its per do!!ari&put is +ased o&!" o& !a+or costs# A!! i&put costsshou!d +e i&c!uded#

[261] Source: CMA 0694 3-26

A&swer A is correct# A first-!i&e super(isor5spri.ar" >o+ is e.p!o"ee super(isio&' so hisEher

producti(it" shou!d +e .easured o& the +asis ofoutput per !a+or hour# Thus' 7 u&its per !a+or houre%pe&ded 1'700 u&its ・300 !a+or hours .easuresproducti(it" +ased o& the factor o(er which the

first-!i&e super(isor has the .ost co&tro!#

A&swer ) is i&correct +ecause a first-!i&esuper(isor &or.a!!" does &ot co&tro! the price paidfor either raw .ateria!s or !a+or#

A&swer C is i&correct +ecause the first-!i&esuper(isor does &ot co&tro! the prices paid for raw.ateria!s or !a+or# Accordi&g!"' output per do!!ar ofi&put is &ot a .ea&i&gfu! .easure#

A&swer , is i&correct +ecause a first-!i&esuper(isor &or.a!!" does &ot co&tro! the price paidfor either raw .ateria!s or !a+or#


A&swer A is correct# The .ateria!s ua&tit"(aria&ce eua!s the sta&dard price ti.es thediffere&ce +etwee& the actua! a&d sta&dard ua&tities#This (aria&ce is therefore eua! to 9'900 fa(ora+!e[1#70 sta&dard u&it cost % 116 !+s# used per u&it -120 !+s# sta&dard per u&it % 1'670 u&its produced]#

A&swer ) is i&correct +ecause the ua&tit" (aria&ceis fa(ora+!e#

A&swer C is i&correct +ecause 2;'410 is the.ag&itude of the price (aria&ce#

A&swer , is i&correct +ecause 2;'410 is the.ag&itude of the price (aria&ce#


A&swer A is correct# The .ateria!s price (aria&ceeua!s the actua! ua&tit" used ti.es the differe&ce+etwee& the actua! a&d sta&dard prices per u&it# This(aria&ce therefore eua!s 2;'410 @&fa(ora+!e [116

!+s# % 1'670 u&its % 1#67 - 1#70]#

A&swer ) is i&correct +ecause 29'400 is the.ag&itude of the (aria&ce if the sta&dard ua&tit" isused#

A&swer C is i&correct +ecause the price (aria&ce isu&fa(ora+!e#

A&swer , is i&correct +ecause 29'400 is the.ag&itude of the (aria&ce if the sta&dard ua&tit" isused#


A&swer A is i&correct +ecause 2'400 is the.ag&itude of the !a+or efficie&c" (aria&ce if 1';00u&its are produced#

A&swer ) is i&correct +ecause 2'400 is the.ag&itude of the !a+or efficie&c" (aria&ce if 1';00u&its are produced#

A&swer C is i&correct +ecause 2'47 @&fa(ora+!eis the !a+or efficie&c" (aria&ce#

A&swer , is correct# The !a+or rate (aria&ce eua!sactua! hours used ti.es the differe&ce +etwee& actua!a&d sta&dard rates# t is ca!cu!ated i& the sa.e wa" asthe .ateria!s price (aria&ce# )ecause the sta&dardrate a&d actua! rate were +oth 12 per hour' the

!a+or rate (aria&ce is 0#




A&swer A is i&correct +ecause a fa(ora+!e (aria&cee%ists#

A&swer ) is i&correct +ecause 6'70 Ba(ora+!eassu.es 1';00 u&its were produced#

A&swer C is i&correct +ecause a fa(ora+!e (aria&cee%ists#

A&swer , is correct# The f!e%i+!e +udget o(erhead(aria&ce is the differe&ce +etwee& tota! actua!o(erhead costs a&d the a.ou&t show& o& a f!e%i+!e+udget# Sta&dard fi%ed costs withi& the re!e(a&t ra&geof productio& are 7'000# Sta&dard (aria+!eo(erhead is 6 per !a+or hour' or 1; per u&it 3 %6# Accordi&g!"' +udgeted tota! o(erhead at theactua! output !e(e! is ;3'400 [1; F % 1'670u&its N 7'000 B]' a&d the f!e%i+!e +udgeto(erhead (aria&ce is 3';0 Ba(ora+!e 49';60actua! - ;3'400 +udgeted#


A&swer A is i&correct +ecause 900 eua!s the u&itprice (aria&ce #10 ti.es 9'000 u&its 3 % 3'000 i&the radios .a&ufactured#

A&swer ) is i&correct +ecause 900 eua!s the u&itprice (aria&ce #10 ti.es 9'000 u&its 3 % 3'000 i&the radios .a&ufactured#

A&swer C is correct# The sta&dard u&it cost is2#90# The actua! cost was 3#00 per u&it 36'000・12'000 u&its# Thus' the u&fa(ora+!e price (aria&ceis 1'200 [3#00 - 2#90 % 12'000 u&its]# The(aria&ce is u&fa(ora+!e +ecause the actua! cost washigher tha& the sta&dard cost#

A&swer , is i&correct +ecause the (aria&ce is

u&fa(ora+!e# The actua! cost was greater tha& thesta&dard cost#


A&swer A is correct# At the gi(e& productio& !e(e!'9'000 co.po&e&ts 3'000 % 3 are &eeded#owe(er' 10'000 were used# Co&seue&t!"' the.ateria!s efficie&c" ua&tit" or usage (aria&ce was2'900 u&fa(ora+!e [10'000 - 9'000 % 2#90sta&dard cost per co.po&e&t]#

A&swer ) is i&correct +ecause the (aria&ce wasu&fa(ora+!e# The actua! ua&tit" used was greatertha& the ua&tit" +udgeted#

A&swer C is i&correct +ecause the ua&tit" (aria&ceis +ased o& the ua&tit" used duri&g the period10'000' &ot the ua&tit" purchased 12'000#

A&swer , is i&correct +ecause the ua&tit" (aria&ceis +ased o& the ua&tit" used duri&g the period10'000' &ot the ua&tit" purchased 12'000#


A&swer A is correct# The 3'000 radios reuirethree u&its each of art Q' a tota! of 9'000 u&its# At asta&dard u&it cost of 2#90' the 9'000 u&its wi!! tota!26'100#

A&swer ) is i&correct +ecause 24'000 is +ased o&actua! u&it costs i&curred rather tha& the 2#90sta&dard cost#

A&swer C is i&correct +ecause 29'000 is +asedo& the actua! ua&tit" used rather tha& the sta&dardua&tit"#

A&swer , is i&correct +ecause 36'000 is thea.ou&t of actua! purchases for the .o&th#


A&swer A is i&correct +ecause 130 @ is the.u!tip!e-cou&tr" sa!es price (aria&ce#

A&swer ) is i&correct +ecause 120 @ is the sa!es(o!u.e (aria&ce for sa!es i& .u!tip!e cou&tries forGa!!ia#

A&swer C is correct# The sa!es (o!u.e (aria&ce forGa!!ia is 120 @ [3#00 +udgeted @CM % 260actua! u&its so!d - 300 +udgeted u&it sa!es]# Thesa!es (o!u.e (aria&ce for e!(etica is 170 B [2#70+udgeted @CM % 260 actua! u&its so!d - 200+udgeted u&it sa!es]# Thus' the .u!tip!e-cou&tr" sa!es(o!u.e (aria&ce is 30 B 170 B - 120 @#

A&swer , is i&correct +ecause 170 B is the sa!es(o!u.e (aria&ce for sa!es i& .u!tip!e cou&tries fore!(etica#


A&swer A is i&correct +ecause 176 @ is the sa!es.i% (aria&ce for Ga!!ia#

A&swer ) is i&correct +ecause 30 B is the.u!tip!e-cou&tr" sa!es (o!u.e (aria&ce#

A&swer C is correct# The sa!es ua&tit" (aria&ce forGa!!ia is 36 B U[720 actua! tota! u&its so!d % #6

+udgeted perce&tage - 300 +udgeted u&it sa!es] %3 +udgeted @CMV# The sa!es ua&tit" (aria&ce fore!(etica is 20 B U[720 actua! tota! u&its so!d % #+udgeted perce&tage - 200 +udgeted u&it sa!es] %2#70 +udgeted @CMV# Thus' the .u!tip!e-cou&tr"sa!es ua&tit" (aria&ce is 76 B 36 B N 20 B#

A&swer , is i&correct +ecause 100 B is theco.+i&ed sa!es price a&d sa!es (o!u.e (aria&ce#


A&swer A is i&correct +ecause 176 @ is the sa!es.i% (aria&ce for Ga!!ia#

A&swer ) is correct# The sa!es .i% (aria&ce forGa!!ia is 176 @ U[260 actua! u&its so!d - 720 actua!tota! u&its so!d % #6 +udgeted perce&tage] % 3+udgeted @CMV# The sa!es .i% (aria&ce fore!(etica is 130 B U[260 actua! u&its so!d - 720actua! tota! u&its so!d % # +udgeted perce&tage] %2#70 +udgeted @CMV# Thus' the .u!tip!e-cou&tr"sa!es .i% (aria&ce is 26 @ 176 @ - 130 B#

A&swer C is i&correct +ecause 76 B is the.u!tip!e-cou&tr" sa!es ua&tit" (aria&ce#

A&swer , is i&correct +ecause 170 B is the sa!es(o!u.e (aria&ce for e!(etica#

[242] Source: CMA 0693 3-23

A&swer A is i&correct +ecause idea! sta&dards areperfectio& sta&dards#



A&swer ) is i&correct +ecause idea! sta&dards are+ased so!e!" o& the .ost efficie&t worers#

A&swer C is i&correct +ecause idea! sta&dardsassu.e opti.a! co&ditio&s#

A&swer , is correct# dea! perfect' theoretica!' or.a%i.u.-efficie&c" sta&dards are sta&dard coststhat are set for productio& u&der opti.a! co&ditio&s#The" are +ased o& the wor of the .ost si!!edworers with &o a!!owa&ce for waste' spoi!age'.achi&e +readow&s' or other dow&ti.e# Tightsta&dards ca& ha(e positi(e +eha(iora! i.p!icatio&s ifworers are .oti(ated to stri(e for e%ce!!e&ce#owe(er' the" are &ot i& wide use +ecause the" ca&ha(e &egati(e +eha(iora! effects if the sta&dards arei.possi+!e to attai&# dea!' or tight' sta&dards areordi&ari!" rep!aced +" curre&t!" attai&a+!e sta&dardsfor cash +udgeti&g' product costi&g' a&d +udgeti&gdepart.e&ta! perfor.a&ce# therwise' accuratefi&a&cia! p!a&&i&g wi!! +e i.possi+!e#


A&swer A is correct# The !a+or "ie!d (aria&ce is thediffere&ce +etwee& actua! a&d +udgeted i&puts' ti.esthe +udgeted weighted-a(erage rate for the p!a&&ed.i%# Tota! hours wored were 1'747 770 N 670 N347' sta&dard hours a!!owed eua!ed 1'700 700 N700 N 700' a&d the +udgeted weighted-a(erage ratefor the p!a&&ed .i% was 6#64 U[700 % ; N 700 %4 N 700 % 7] ・1'700 sta&dard ,KV# Thus'the (aria&ce is 700 u&fa(ora+!e 6#64 % 47#

A&swer ) is i&correct +ecause 320 is the !a+or.i% (aria&ce#

A&swer C is i&correct +ecause ;20 is the !a+orefficie&c" (aria&ce#

A&swer , is i&correct +ecause 717 is +ased o&the +udgeted weighted-a(erage rate for the actua!.i%#


A&swer A is i&correct +ecause 70#00 is the(aria&ce for !a+or c!ass o&!" [4 - 6#64 % 670,K - 700 ,K]#

A&swer ) is correct# The !a+or .i% (aria&ce is thediffere&ce +etwee& the +udgeted weighted-a(eragerates for the actua! a&d p!a&&ed .i%es' ti.es theactua! !a+or i&puts# The +udgeted weighted-a(erage

rate for the p!a&&ed .i% is 6#64 see precedi&guestio&# The +udgeted weighted-a(erage rate forthe actua! .i% is 6#;43 [770 % ; N 670 % 4 N347 % 7 ・1'747 actua! ,K]# Thus' the .i%(aria&ce is 320 [6#;43 - 6#64 % 1'747]#

A&swer C is i&correct +ecause 66#64 is the(aria&ce for !a+or c!ass o&!" [; - 6#64 % 770,K - 700 ,K]#

A&swer , is i&correct +ecause 700 is the !a+or"ie!d (aria&ce#

[247] Source: CMA Sa.p =3-11

A&swer A is i&correct +ecause 114 u&fa(ora+!e is+ased o& the sta&dard i&put for 1'300 u&its#

A&swer ) is i&correct +ecause 123 u&fa(ora+!e is

+ased o& the actua! ua&tit" used#

A&swer C is correct# The .ateria!s purchase price(aria&ce eua!s the ua&tit" purchased .u!tip!ied +"the differe&ce +etwee& the actua! price a&d thesta&dard price' or 137 u&fa(ora+!e [#47 - #42 %'700 !+s#]# The (aria&ce is u&fa(ora+!e whe& theactua! price e%ceeds the sta&dard price#

A&swer , is i&correct +ecause 170 u&fa(ora+!e is+ased o& the assu.ptio& that 7'000 !+s# werepurchased#


A&swer A is i&correct +ecause 36'700 fa(ora+!eresu!ts fro. usi&g the sta&dard cost per u&it for eachdirect .ateria!' a&d a!so +" re(ersi&g the order ofsu+tractio&#

A&swer ) is i&correct +ecause 36'700u&fa(ora+!e resu!ts fro. usi&g the sta&dard cost peru&it for each direct .ateria!#

A&swer C is i&correct +ecause the price (aria&ce isu&fa(ora+!e whe& the actua! price is greater tha& thesta&dard price#

A&swer , is correct# The tota! .ateria!s price(aria&ce is fou&d +" .u!tip!"i&g the differe&ce+etwee& the sta&dard price a&d the actua! price +"the actua! ua&tit"# The actua! price is ca!cu!ated +"di(idi&g actua! cost +" actua! ua&tit"# Therefore' theactua! price for housi&g u&its is 20Eu&it '000 ・

2'200' for pri&ted circuit +oards' 16Eu&it 47'200・'400' a&d for readi&g heads' 11Eu&it 101'200・9'200# Thus' tota! .ateria!s price (aria&ce is

ousi&g u&its: 2'200 % 20 - 20 O 0 ri&ted circuit +oards: '400 % 17 - 16 O '400 @

?eadi&g heads: 9'200 % 10 - 11 O 9'200 @ 13'900 @


A&swer A is correct# The tota! .ateria!s ua&tit"(aria&ce is fou&d +" .u!tip!"i&g the differe&ce+etwee& the sta&dard ua&tit" a&d actua! ua&tit" +"the sta&dard price# Sta&dard ua&tities are ca!cu!ated+" .u!tip!"i&g the actua! u&its +" the sta&dard ua&tit"per u&it# & this e%a.p!e' the sta&dard ua&tit" forhousi&g u&its is 2'200 parts 2'200 % 1< for pri&tedcircuit +oards' '00 parts 2'200 % 2< a&d forreadi&g heads' ;';00 parts 2'200 % # Therefore'the tota! .ateria!s ua&tit" (aria&ce is

ousi&g u&its: 20 % 2'200 - 2'200 O 0 ri&ted circuit +oards: 17 % '00 - '400 O '700 @ ?eadi&g heads: 10 % ;';00 - 9'200 O '000 @ ;'700 @

A&swer ) is i&correct +ecause ;'700 fa(ora+!eresu!ts fro. re(ersi&g the order of su+tractio&#

A&swer C is i&correct +ecause 9'200 u&fa(ora+!eresu!ts fro. .u!tip!"i&g +" actua! price#

A&swer , is i&correct +ecause 9'200 fa(ora+!eresu!ts fro. .u!tip!"i&g +" the actua! price a&dre(ersi&g the order of su+tractio&#


A&swer A is correct# The (aria+!e o(erhead



efficie&c" (aria&ce is fou&d +" .u!tip!"i&g thediffere&ce +etwee& sta&dard hours a&d actua! hours+" the sta&dard rate# The &u.+er of sta&dard hours isca!cu!ated +" .u!tip!"i&g the actua! u&its +" thesta&dard hours per u&it# Therefore' the &u.+er ofsta&dard hours is 9'900 2'200 % #7 hours peru&it' a&d the (aria+!e o(erhead efficie&c" is 0 [2 %9'900 - 9'900]#

A&swer ) is i&correct +ecause 900 u&fa(ora+!eresu!ts fro. .u!tip!"i&g +" the +udgeted &u.+er ofu&its' 2'000' i&stead of actua!' 2'200#

A&swer C is i&correct +ecause 9'900 u&fa(ora+!eresu!ts fro. usi&g a sta&dard hours per u&it rate of 9hours a&d re(ersi&g the order of su+tractio&#

A&swer , is i&correct +ecause 9'900 fa(ora+!eresu!ts fro. usi&g a sta&dard hours per u&it rate of 9hours#


A&swer A is i&correct +ecause 1'000 u&fa(ora+!e

resu!ts fro. re(ersi&g the order of su+tractio&#

A&swer ) is correct# The (aria+!e o(erheadspe&di&g (aria&ce is fou&d +" su+tracti&g actua!(aria+!e o(erhead fro. the product of actua! hoursa&d the sta&dard rate# Therefore' the (aria+!eo(erhead spe&di&g (aria&ce is 1'000 fa(ora+!e[9'900 % 2 - 1;';00]#

A&swer C is i&correct +ecause 1';00 u&fa(ora+!eresu!ts fro. usi&g the +udgeted (aria+!e o(erheada&d +" re(ersi&g the order of su+tractio&#

A&swer , is i&correct +ecause 1';00 fa(ora+!eresu!ts fro. usi&g the +udgeted (aria+!e o(erhead#


A&swer A is i&correct +ecause 9';00 u&fa(ora+!eresu!ts fro. .u!tip!"i&g +" the actua! u&it co&tri+utio&a&d re(ersi&g the order of su+tractio&#

A&swer ) is i&correct +ecause 9';00 fa(ora+!eresu!ts fro. .u!tip!"i&g +" the actua! u&it co&tri+utio&#

A&swer C is correct# The co&tri+utio& .argi&(o!u.e (aria&ce is fou&d +" .u!tip!"i&g +udgeted u&itco&tri+utio& +" the differe&ce +etwee& actua! u&itsa&d +udgeted u&its# The +udgeted u&it co&tri+utio& i&this e%a.p!e is 61 122'000 ・2'000 u&its#Therefore' the (aria&ce is 12'200 fa(ora+!e [61

per u&it % 2'200 actua! u&its - 2'000 +udgeted u&its#

A&swer , is i&correct +ecause 1'660u&fa(ora+!e is the (aria&ce +etwee& +udgeted a&dactua! co&tri+utio& .argi&s#

[2;1] Source: CMA Sa.p =3-1

A&swer A is i&correct +ecause the sta&dard i&putfor the actua! output e%ceeds &or.a! capacit"# Thus'use of &or.a! capacit" resu!ts i& a fa(ora+!e (o!u.e(aria&ce#

A&swer ) is i&correct +ecause the sta&dard i&putfor the actua! output e%ceeds &or.a! capacit"# Thus'

use of &or.a! capacit" resu!ts i& a fa(ora+!e (o!u.e(aria&ce#

A&swer C is i&correct +ecause use of .aster

+udget capacit" resu!ts i& a& u&fa(ora+!e (aria&ce#

A&swer , is correct# The (o!u.e id!e capacit" orproductio& (o!u.e (aria&ce is the a.ou&t of u&der-or o(erapp!ied fi%ed factor" o(erhead# t is thediffere&ce +etwee& +udgeted fi%ed factor" o(erheada&d the a.ou&t app!ied +ased o& a predeter.i&edrate a&d the sta&dard i&put a!!owed for actua! output#t .easures the use of capacit" rather tha& specificcost out!a"s# The predeter.i&ed rate eua!s the+udgeted o(erhead di(ided +" a .easure of capacit"#Co&seue&t!"' whe& the sta&dard i&put a!!owed foractua! output e%ceeds the +udgeted capacit"' fi%edfactor" o(erhead is o(erapp!ied' a&d the (o!u.e(aria&ce is fa(ora+!e# f the .aster +udget capacit" isthe de&o.i&ator (a!ue' the (o!u.e (aria&ce isu&fa(ora+!e# Co&(erse!"' whe& the sta&dard i&puta!!owed for actua! output is !ess tha& the +udgetedcapacit"' fi%ed factor" o(erhead is u&derapp!ied' a&dthe (o!u.e (aria&ce is u&fa(ora+!e# f the &or.a!capacit" is the de&o.i&ator (a!ue' the (o!u.e(aria&ce is fa(ora+!e#


A&swer A is i&correct +ecause 208 of super(isio&a&d i&direct !a+or costs &eed to +e su+tracted fro.tota! e.p!o"ee +e&efits to deter.i&e the e.p!o"ee+e&efits associated with direct !a+or costs#

A&swer ) is i&correct +ecause 47'000 is the resu!tof deducti&g ;08 of super(isio& a&d i&direct !a+orcosts fro. tota! e.p!o"ee +e&efits#

A&swer C is correct# The tota! e.p!o"ee +e&efitsi&c!ude 208 of super(isio& a&d direct a&d i&direct!a+or costs# To fi&d the a.ou&t associated with direct!a+or' 208 of super(isio& a&d i&direct !a+or costs aresu+tracted fro. tota! e.p!o"ee +e&efits [747'000 -208 % 270'000 N 347'000]' or 70'000#

A&swer , is i&correct +ecause 208 of super(isio&a!so &eeds to +e deducted#


A&swer A is i&correct +ecause 4#;0Ehr# is thefi%ed .a&ufacturi&g E rate per direct !a+or hour#

A&swer ) is i&correct +ecause the (aria+!e.a&ufacturi&g o(erhead rate is deter.i&ed +"di(idi&g (aria+!e e%pe&ses supp!ies' i&direct !a+or'power' a&d direct a&d i&direct !a+or +e&efits +"direct !a+or hours#

A&swer C is i&correct +ecause 7#14Ehr# i&correct!"i&c!udes super(isio& +e&efits of 70'000#

A&swer , is correct# To deter.i&e the (aria+!e.a&ufacturi&g E rate' a!! (aria+!e a.ou&ts .ust +etota!ed 1'700'000 a&d di(ided +" the capacit" i&,K 300'000#

Tota! er ,K ---------- ------- Supp!ies 20'000 1#0 &direct !a+or 347'000 1#27 ower 1;0'000 #60 $.p!o"ee +e&efits: 208 direct !a+or 70'000 1#70

208 i&direct !a+or 47'000 #27 ---------- ------- Tota! 1'700'000 7#00 OOOOOOOOOO OOOOOO




A&swer A is correct# The (aria+!e .a&ufacturi&gcost to produce a 100-u&it !ot is 100 ti.es the su. ofdirect .ateria!s' direct !a+or' a&d (aria+!e E perseat#

Cushio& .ateria!s addi&g 2#0 Fi&"! #00 ----- Tota! cushio& .ateria!s 6#0 Cost i&crease 108 gi(e& %1#10 ----- Cost of cushio&ed seat 4#0 Cushio& fa+ricatio& !a+or 4#70E,K % #7 ,K 3#47 Faria+!e o(erhead 7#00E,K % #7 ,K 2#70 ----- Tota! (aria+!e cost per cushio&ed seat 13#29 OOOOOO Tota! (aria+!e cost per 100-u&it !ot 1'329 OOOOOO

A&swer ) is i&correct +ecause 1';69 is thetra&sfer price p!us the opportu&it" cost of 70 of theffice ,i(isio&#

A&swer C is i&correct +ecause 4;9 is the tra&sferprice .i&us the opportu&it" cost of 70 of theffice ,i(isio&#

A&swer , is i&correct +ecause the tra&sfer price+ased o& the (aria+!e .a&ufacturi&g costs is 1'329#


A&swer A is correct# Tota! fi%ed E is2'30'000 see +e!ow# t is di(ided +" the

300'000-hour !e(e! of acti(it" to deter.i&e the 4#;0hour!" rate#

Super(isio& 270'000 eat a&d !ight 10'000 ropert" ta%es a&d i&sura&ce 200'000 ,epreciatio& 1'400'000 )e&efits 208 of super(isio& 70'000 ---------- 2'30'000 OOOOOOOOOO

A&swer ) is i&correct +ecause the fi%ed.a&ufacturi&g o(erhead rate is deter.i&ed +"di(idi&g fi%ed e%pe&ses super(isio&' heat a&d !ight'propert" ta%es a&d i&sura&ce' depreciatio&' a&d

super(isio& +e&efits +" direct !a+or hours#

A&swer C is i&correct +ecause 7#14Ehr# i&correct!"i&c!udes super(isio& +e&efits of 70'000#

A&swer , is i&correct +ecause 7#00Ehr# is the(aria+!e .a&ufacturi&g E rate per hour#


A&swer A is i&correct +ecause the tota! hoursa(ai!a+!e for eco&o." stoo!s &eeds to +e di(ided +"the #; hr# reuired to .ae a& eco&o." stoo!#

A&swer ) is correct# The !a+or hours used i&

cushio& fa+ricatio& wi!! +e used to .ae the .odifiedcushio&ed seat# Thus' the !a+or ti.e freed +" &ot.ai&g de!u%e stoo!s eua!s the fra.e fa+ricatio& a&dasse.+!" ti.e o&!"# The &u.+er of eco&o." office

stoo!s that ca& +e produced is 127#

Ka+or hours to .ae 100 de!u%e stoo!s 1#7 % 100 170 hr# Mi&us: Ka+or hours to .ae 100 cushio&ed seats cushio& fa+ricatio& #7 % 100 70hr# --- Ka+or hours a(ai!a+!e for eco&o." stoo! 100 hr# Ka+or hours to .ae o&e eco&o." stoo! ・; hr# --- Stoo!s produced +" e%tra !a+or i& eco&o." stoo! productio& 100 ・#; hr# 127 stoo!s OOO

A&swer C is i&correct +ecause the tota! hoursa(ai!a+!e for eco&o." stoo!s &eeds to +e di(ided +"the #; hr# reuired to .ae a& eco&o." stoo!#

A&swer , is i&correct +ecause 170 is the &u.+erof hours reuired to .ae 100 de!u%e stoo!s +eforeco&sideri&g the hours reuired to .ae 100cushio&ed seats#


A&swer A is correct# The co&tri+utio& .argi& peru&it is eua! to the se!!i&g price .i&us the (aria+!ecosts# Faria+!e costs per u&it for the de!u%e officestoo! eua! 33#30 a&d the se!!i&g price is 7;#70#Thus' the co&tri+utio& .argi& is 27#20 per u&it7;#70 - 33#30# The tota! sta&dard cost is7#00' which i&c!udes 11#40 of fi%ed E 1#7 hr#% 4#;0' a&d the (aria+!e costs are 33#30 7#00- 11#40#

A&swer ) is i&correct +ecause 17#; is theco&tri+utio& .argi& of the eco&o." office stoo!#

A&swer C is i&correct +ecause (aria+!e costs of33#30 &eed to +e deducted fro. the sa!es price of

7;#70#

A&swer , is i&correct +ecause 33#30 is the(aria+!e cost which .ust +e deducted fro. the sa!esprice to "ie!d the co&tri+utio& .argi&#

[2;;] Source: u+!isher

A&swer A is i&correct +ecause 4;9 is the tra&sferprice of 1'329 .i&us the opportu&it" cost of 70of the ffice ,i(isio&#

A&swer ) is i&correct +ecause 1';69 is thetra&sfer price of 1'329 p!us the opportu&it" cost of70 of the ffice ,i(isio&#

A&swer C is i&correct +ecause 1'329 is thetra&sfer price' &ot the opportu&it" cost of the ffice,i(isio&#

A&swer , is correct# pportu&it" cost is the +e&efitof the &e%t +est opportu&it" forgo&e# The opportu&it"cost here is the co&tri+utio& .argi& forgo&e +"shifti&g productio& to the eco&o." office stoo!2'720 - 1'9;0 O 70#

,e!u%e $co&o." ------ ------ Se!!i&g price 7;#70 1#60 ------ ------ Costs

Materia!s 1#77 17#46 Ka+or 4#70 % 1#7 11#27 4#70 % #; 6#00 Faria+!e E 7 % 1#7 4#70 7 % #; #00 Bi%ed E -- --



------ ------ Tota! costs 33#30 27#46 ------ ------ @&it CM 27#20 17#; @&its produced % 100 % 127 ------ ------ Tota! CM 2'720 1'9;0 OOOOOO OOOOOO


A&swer A is i&correct +ecause 2'207 is thediffere&ce +etwee& the actua! cost a&d the su. of theproducts of actua! hours a&d sta&dard rates#Moreo(er' the (aria&ce is u&fa(ora+!e#

A&swer ) is i&correct +ecause 2'207 u&fa(ora+!eis the !a+or rate (aria&ce#


A&swer , is correct# The tota! f!e%i+!e +udget

(aria&ce is the differe&ce +etwee& the sta&dard costof !a+or a&d the actua! cost of !a+or# )ased o& thesta&dard hours a&d rates gi(e&' the sta&dard cost of!a+or is 179'060 [4'920 % 12#00 N '620 %;#00 N '710 % 6#00]# The actua! cost of !a+oris 160';07 100'27 N 37'260 N 27'300#Thus' the tota! f!e%i+!e +udget (aria&ce is 1'47u&fa(ora+!e 160';07 actua! - 179'060 sta&dard#


A&swer A is i&correct +ecause 3'739 resu!ts fro.ca!cu!ati&g the +udgeted weighted-a(erage sta&dardrate for the actua! .i% usi&g actua! rates#

A&swer ) is i&correct +ecause 3'739 resu!ts fro.ca!cu!ati&g the +udgeted weighted-a(erage sta&dardrate for the actua! .i% usi&g actua! rates# Moreo(er'the (aria&ce is u&fa(ora+!e#

A&swer C is correct# The !a+or .i% (aria&ce is thediffere&ce +etwee& the +udgeted weighted-a(eragesta&dard rates for the actua! a&d sta&dard .i%es'.u!tip!ied +" the actua! !a+or i&put# The tota! actua!!a+or i&put was 16';70 hours ;'170 N '300 N'00# Accordi&g!"' the +udgeted weighted-a(eragesta&dard rate for the actua! .i% was 9#1 U [;'170 %12 N '300 % ; N '00 % 6] ・16';70V#Gi(e& that the tota! sta&dard !a+or i&put was 14'070hours 4'920 N '620 N '710' the +udgetedweighted-a(erage sta&dard rate for the sta&dard .i%

was 9#33 U[4'920 % 12 N '620 % ; N '710% 6] ・14'070V# Thus' the .i% (aria&ce is 1'3;u&fa(ora+!e [9#1 - 9#33 % 16';70]#

wored were 16';70 ;'170 N '300 N '00' a&dsta&dard hours a!!owed eua!ed 14'070 4'920 N'620 N '710# The +udgeted weighted-a(eragesta&dard rate for the sta&dard .i% was 9#33U[4'920 % 12 N '620 % ; N '710 % 6] ・

14'070V# e&ce' the "ie!d (aria&ce is 1';66fa(ora+!e [9#33 % 16';70 - 14'070]#

A&swer C is i&correct +ecause 1'433 fa(ora+!eresu!ts fro. .u!tip!"i&g +" the si.p!e a(erage of thesta&dard hour!" rates#

A&swer , is i&correct +ecause 60 fa(ora+!eresu!ts fro. .u!tip!"i&g each !a+or c!ass5s hour(aria&ce +" its respecti(e sta&dard hour!" rate#

control and performance evaluation

Documents