Bender Day 20

Question 1

Equation: Variable OH Efficiency Variance

Answer 1

Budgeted Variable OH based on standard hours
Less:
Budgeted Variable OH based on actual hours

MCQ-03829

Question 2

If EVA is higher than the Residual Income method, one explanation is?

Answer 2

Cost of Capital is less than the hurdle rate

EVA = NOPAT - Required Return

Required Return = Investment × WACC

MCQ-07780

Question 3

If tax rates are expected to decrease, the WACC will:

Answer 3

Increase, bc the after tax cost of debt will increase

After tax cost of debt = pretax cost ×(1-tax rate)

MCQ-07791

Question 4

Equation: Direct Materials Usage Variance

Answer 4

Standard Price × (Actual Quantity Used - Standard Quantity Allowed)

MCQ-12432

Question 5

Name an industry using job costing and process costing system?

Answer 5

Job = Print shop

Process = Beverage drink

MCQ-13024

Question 6

What standard costing variances are controllable by a production supervisor?

Answer 6

1. Labor efficiency
2. Material Usage
3. OH efficiency

Note: OH Volume is not controllable

MCQ-03848

Question 7

What budget provides info for the preparation of the owners equity section of a budgeted balance sheet?

Answer 7

Budgeted income Stmt

Shows accrual basis net Income or loss and is added to owner’s equity

MCQ-05568