ACT 220 Exam 2 Questions with Correct Answers

ACT 220 Exam 2 Questions with Correct Answers An intentional understatement of expected revenues or overstatement of expected expenses by managers in order to have a favorable performance evaluation is known as _________ - ANSWER budgetary slack The practice of comparing a company with its prior performance or with best practices from other companies is called - ANSWER benchmarking Ending inventory= - ANSWER beginning inventory+additions-reductions The sales budget is considered the cornerstone of the master budget because - ANSWER the level of sales affects almost all of the other elements of the master budget What is an example of a direct labor cost standard - ANSWER $40 per direct labor hour What is an example of a direct labor efficiency standard - ANSWER 6 direct labor hours per unit A cost variance measures: - ANSWER how well the business keeps unit costs of material and labor inputs within standards A favorable direct materials cost variance indicates: - ANSWER the actual cost of direct materials purchased was less than the standard cost of the direct materials purchased What is an explanation for an unfavorable direct materials efficiency variance? - ANSWER the factory lost two experienced workers at the beginning of the quarter and their replacements wasted a large amount of product during their training period