The document discusses key concepts in management accounting including differences between management accounting and financial accounting, variances, cost classifications like fixed and variable costs, and cost analysis techniques. It covers topics like sunk costs, direct and indirect costs, budgeting, and tools for separating fixed and variable costs.
The document discusses key concepts in management accounting including differences between management accounting and financial accounting, variances, cost classifications like fixed and variable costs, and cost analysis techniques. It covers topics like sunk costs, direct and indirect costs, budgeting, and tools for separating fixed and variable costs.
The document discusses key concepts in management accounting including differences between management accounting and financial accounting, variances, cost classifications like fixed and variable costs, and cost analysis techniques. It covers topics like sunk costs, direct and indirect costs, budgeting, and tools for separating fixed and variable costs.
The document discusses key concepts in management accounting including differences between management accounting and financial accounting, variances, cost classifications like fixed and variable costs, and cost analysis techniques. It covers topics like sunk costs, direct and indirect costs, budgeting, and tools for separating fixed and variable costs.
The general functions of management in all levels of managerial
1. One of the differences in management accounting and financial powers are planning, organizing, staffing, directing and controlling. accounting is that the former focuses on precision while the latter TRUE focuses on timeliness. FALSE 2. Controllership comprise the plan of an organization and all its coordinate 1. Financial reports known as _ are representative of the company‟s methods and measures in order to protect the assets, check the operations, changes, and conditions, and are prepared holistically. accuracy and reliability of accounting data, promote operational a) Financial Statements b) Financial Accounting Information efficiency, and encourage adherence to prescribed managerial policies. c) Business Reports FALSE 2. Under this, the practitioners of management accounting and financial 3. Unfavorable variance always results to exceptional variance. management have a responsibility to maintain an appropriate level of 4. Exceptional variances are material, unusual, abnormal and are beyond professional competence by ongoing development of their knowledge and normal expectations. TRUE skills. 5. Treasurership deals with the management of wealth. It includes a) Integrity b) Objectivity c) Competence mastering the sources of funds and the exercise of prudence in using 3. It is primarily concerned with historical and estimated data the resources of an organization. TRUE a) Management Accounting b) Financial Accounting 6. Management accounting information shouldn‟t have predicted value. c) Strategic Management Accounting The decisions to be made must not be forward looking. FALSE 4. Information that arrives after the decision is already made may find no 7. Lack of clarity creates noise in information system theory that further usefulness but only to the limits of comparative analysis and long-term causes miscommunication or breakdown in communication. TRUE control 8. Information that arrives before the decision is already made may find no a) Usefulness b) Timing c) Accuracy usefulness but only to the limits of comparative analysis and long-term 5. It must be established to define the purpose, directions and activities that control. TRUE need to be accomplished 9. A manager should be informed of all the available information on hand a) Purpose b) Agenda c) Goals to avoid unnecessary errors which may lead to increase in costs or 6._are organizational controls. These are developed during the formulation damaged reputation. TRUE of the organizational design and intended to minimize or reduce errors, 10. A rational, or better intelligent decision based on quality information inefficiencies, irregularities, and illegal acts. would mostly likely lead to decreased shareholder‟s value. FALSE a) Application control b) General Control c) Management Control 11. Management Process covers both the intelligent and behavioral 7. What are the elements of transactional responsibilities? aspects of management. FALSE a.) authorization, execution, recording, custodianship, periodic 12. Managers make decisions in all levels of managerial authority and accountability areas of managerial functions. TRUE b.) authorization, keeping, management, controllership 13. The planning and controlling cycle sums up the pioneering areas of c.) execution, periodic accountability, custodianship, treasurership, management accounting. TRUE controllership 14. Managerial Authority relates to organizational structure and may be classified as lower management, middle management and supervisory management. FALSE 8. This is contributing to frameworks and practices for identifying, CHAPTER 2 measuring, managing, and reporting risks t the achievement of the FALSE 1. Sunk costs can be changed by a decision made now or to be objectives of the organizations. made in the future a.) Strategic Management b.) Performance Management TRUE 2. Indirect material and indirect labor are manufacturing costs that c.) Risk Management are charged to factory overhead. 9. _ deals with the management of wealth of organizations. It includes TRUE 3. A direct cost can be specifically and economically associated with mastering the sources of funds and the exercise of prudence in using the a single cost object. resources of an organization. It is the fiduciary aspect of management. TRUE 4. Both costs and expenses give benefits to the business. a.) Treasurership b.) Controllership c.) Custodianship TRUE 5. Sunk costs are not constant and not differential. 10. A manager should be informed of all the available information on hand TRUE 6. Depreciation is considered as non-cash costs. to avoid unnecessary errors which may lead to increase in costs or FALSE 7. Opportunity cost are given up while imputed costs are avoided. damaged reputation. What attributes of management accounting FALSE 8. Marginal cost is a decrease in cost per unit. information it is? TRUE 9. Budgeted costs are those expected to be incurred at the level of a.) Accuracy b.) Confidence c.) Completeness activity used in preparing the master budget. 11. Day-to-day decision making is most common to which of the following FALSE 10. Planned costs are future values derived from using forecasting activities managers are expected to carry on in organizations? models such as probability, regression and causal models. a) Strategy formulation. b) Directing and motivating. c) Planning. TRUE 11. Avoidable costs are those not incurred once an activity is not 12. Which of the following best describes the role of a staff position in an performed. They normally become savings on the part of the business. organization? TRUE 12. Some examples of indirect departmental costs are salaries of a a) It relates directly to the carrying out of the basic objectives of the department manager and salaries of personnel assigned to the organization. department. b) It is supportive in nature, providing service and assistance to other FALSE 13. Total fixed costs are constant regardless of level of production parts of the organization. and sales. c) It is superior in authority to a line position. FALSE 14. Unit fixed cost increases as the production increases and vice 13. Which of the following are not an attributes and principles of versa. management accounting information? TRUE 15. Total variable costs change in direct proportion to the change in a) Accuracy b) Channel of Communication c) Accountability the level of production and sales. 14. are material, unusual, abnormal and are beyond normal expectation. TRUE 16. Unit variable costs are constant regardless of levels of a) Exceptional Variance b) Normal Variance c) Variance production and sales. 15. It comprises the plan of an organization and all its coordinate methods FALSE 17. As production doubles, men increase their productivity and is and measures in order to protect the assets, check the accuracy and translated into 40% savings in labor time. reliability of accounting data, promote operational efficiency, and TRUE 18. There are three popular methods in segregating fixed from encourage and adherence to prescribed managerial policies. variable costs. They are high-low method, learning curve and scattergraph. a) External Control b) Internal Control c) Preventive Control FALSE 19. Scattergraph method extends the regression line to the other quadrants in the holistic quadrant analysis. TRUE 20. The point of origin or point of intercept is the value of “a” TRUE 21. There is always a variance between Y and Y', and the extent of 7. Costs that represent commitments made by the business in its previous its variance may not be taken into consideration. decisions and cannot be avoided in the future is called? TRUE 22. Determining the correlation of “X” and “Y” is extremely important a. OPCs b. Sunk cost c. Non-cash cost d. Marginal cost in planning and controlling activities on account of reliability and accuracy. 8.Costs may be classified in relation to particular product or activity such FALSE 23. The results of the sampling techniques indicate absolute as: conformity of the predicted Y value in relation to the actual Y value. a.Opportunity cost and Imputed cost TRUE 24. This formula, ∑( )( )∑( ) ( ) is used to compute the coefficient of b.Explicit cost and Implicit cost determination. c. Incremental cost and Marginal cost d. Out-of-pocket Cost and Non-cash Cost 1. Which of the following costs would be considered relevant in short-term 9. It is an expenditure already incurred and recorded in the accounting decision making? books. a. Production costs of goods available for sale a. Actual Cost b. Projected Cost c. Avoidable cost d. Direct Segment cost b. Incremental fixed costs 10. Which Costs may be classified in relation to the level of activity being c. Acquisition cost of idle asset to be used in a proposed project considered for estimation? d. Variable costs a. Budgeted Cost and Standard Cost b. Planned Cost and Actual Cost 2.For product costing purposes, an indirect factory cost c. Controllable Cost and Uncontrollable a.is not directly chargeable to the company d. Avoidable Cost and Unavoidable Cost b.is chargeable to prime costs 11. Which Costs may be classified in relation to the occurrence of an c.is chargeable to conversion costs activity? d.is never included in the computation of product cost a. Budgeted Cost and Standard Cost 3.Product cost b. Planned Cost and Actual Cost a.are always expensed in the same period in which they are incurred c. Controllable Cost and Uncontrollable b. are inventoriable costs d. Avoidable Cost and Unavoidable Cost c. vary directly with the changes in the cost driver 12. Costs may be classified in relation to its incurrence in a future d. are always charged to an asset account in the same period in which they undertaking? are incurred a.Budgeted Cost and Standard Cost 4.Relevant costs are b. Planned Cost and Actual Cost a.variable past costs b.all fixed and variable costs c. Controllable Cost and Uncontrollable c.anticipated future costs that will differ among various alternatives d. Avoidable Cost and Unavoidable Cost d.costs incurred within the relevant range of production 13. It could either be semi variable costs, semi fixed costs or step costs. 5.All of the following are costs in an economist‟s perspective except: a.Mixed Costs b. Semi-fixed costs c. Step costs d. Semi-variable costs a.Future cost b.Explicit cost c. Imputed cost d. Marginal cost 14. It is a band of activity where the behavior of costs, expenses and 6. Which of the following is not a theoretical cost? revenues is valid. a. Implicit cost b. Imputed cost c. Opportunity cost d. Explicit Cost a.Learning Curve Theory b.Cost sensitivity c. Relevant Range d. Unit Costs 15. Vary directly in proportion to the change in the level of production and d. must have a positive y intercept sales. 24. In regression analysis, the variable that is being predicted is the a. Mixed Costs b. Variable costs c. Fixed costs d. Semi-variable costs a. response, or dependent, variable b. independent variable 16. Those which incurrences have been committed by the business in the c. intervening variable d. is usually x past by the reason of contract, acquisition or agreement. a.Discretionary fixed Costs b.Variable costs CHAPTER 3 c. Fixed costs d.Committed fixed costs FALSE 1. Decentralized organization exists when decisions rest only to the 17. It is called as range analysis and resides on the assumption that any top management. change in total costs is attributable to the change in variable costs. TRUE 2. An investment center manager decides in which strategic a.High-low method b.Scattergraph c. Least-squares d. Learning Curve business opportunity should the company undertake. 18. It is change in costs over change in units. FALSE 3. Segment profit less minimum income is equals to residual a.Total fixed costs b.Fixed Costs income. c. Total variable costs d.Variable cost rate FALSE 4. Budgeting is the basic purpose of responsibility accounting. 19. The slope which depicts the increase in the value of Y depending on TRUE 5. Responsibility accounting encourages managers and other the change in the value of “x” employees to achieve enterprise goals not just their own individual goals. a. Value of “a” c. Values of “a” and “b” TRUE 6. In deciding how or which costs should be assigned to a b. Value of “b” d. None of the above responsibility center is the degree of controllability. 20. It is the difference between total costs and total variable costs. TRUE 7. Profit centers measures income and relate that income to their a. Total costs c. Fixed costs invested capital. b. Costs rate d. Total fixed costs measures income and relate that income to their invested capital. 21. The correlation coefficient is used to determine: TRUE 8. The main difference between the profit center and an investment a. A specific value of the y-variable given a specific value of the x-variable center is that the emphasis of is on the rate of return in the investment b. A specific value of the x-variable given a specific value of the y- rather than an absolute profit. variable TRUE 9. Marginal cost is the amount of cost increase caused by a unit c. The strength of the relationship between the x and y variables increase in the output of the product. d. None of these FALSE10. Outlay price is the price that one division of a company charges 22. The coefficient of correlation another division for goods or services provided. a. is the square of the coefficient of determination TRUE 11. The economic value added is a measure of the management b. is the square root of the coefficient of determination effectiveness in increasing investor's value. c. is the same as r-square TRUE 12. The return on equity is equal to profit divided by average d. can never be negative shareholders' equity. 23. If the coefficient of determination is a positive value, then the FALSE 13. ROI is always suitable method in evaluating the performance of regression equation an excellent manager who is assigned to make business turnaround a. must have a positive slope performance, say to deliver a profitable performance of a previously b. must have a negative slope unprofitable operations. c. could have either a positive or a negative slope TRUE 14. Return on investment is increased by increasing profit and reducing investment. 3. It is the answerability on the consequences of what had been done, FALSE 15. Assets turnover is equals to profit divided by net sales. undone, or had not been done. TRUE 16. A division is an investment center or a business segment having a. Authority b. Accountability c. Responsibility d. Centralization its separately defined business and financing activities from that of the 4. It is the power to do or not to do, give orders, give command, give parent or controlling company. instructions, or make decisions. TRUE 17. The economic value added (EVA) represents the business unit‟s a. Authority b. Accountability c. Responsibility d. Centralization true economic profit because a change in the cost of equity capital is 5. It is the duty to do or not to do an activity according to the order given. implicit in the cost of capital. the cost of equity is an opportunity cost, that a. Authority b. Accountability c. Responsibility d. Centralization is, the return that could have been obtained with the best alternative 6.Statement 1: Controllability refers to the power of the manager to decide investment having similar risk. or influence the incurrence or non-incurrence of an item, event or activity. TRUE 18. The difference between controllable margin and segment margin Statement 2: A division is an investment center or a business segment is fixed cost and expenses controllable not by the concerned manager but having its separately defined business and financing activities from its by others. parent or controlling company. TRUE 19. This organizational design emphasizes the strength of functional a. Statement 1 is true, while statement 2 is false areas such as finance, production, marketing, sales, and administration. b. Statement 1 is false, while statement 2 is true TRUE 20. ROI model may not also be the most suitable method in c. Both statements are true evaluating the performance of an excellent manager who is assigned to d. Both statements are false make a business turnaround performance, say to deliver a profitable 7.Statement 1: The cost center manager report should highlight the performance of a previously unprofitable operations. variances between the actual and budgeted costs. Statement 2: There is no need to separate the controllable from the non- 1. Which of the following sentences is NOT true? controllable costs in a cost center manager report. a. Responsibility accounting is central to any effective profit planning and a. Statement 1 is true, while statement 2 is false control system. b. Statement 1 is false, while statement 2 is true b. In a budgeting program, each manager is assigned responsibility for c. Both statements are true those items of revenues and costs in the budget that he or she is able to d. Both statements are false control 8.Statement 1: Unfavorable variances indicate savings Statement 2: c. The deviations between budgeted goals and actual results is outside the Favorable variances indicate excessive costs responsibility and control of each manager a. Statement 1 is true, while statement 2 is false d. Each manager‟s performance is judged by how well he or she b. Statement 1 is false, while statement 2 is true manages those items under his or her control. c. Both statements are true 2.Controllable costs for responsibility accounting purposes are those costs d. Both statements are false that are directly influenced by 9. It exists when decisions rest only to the top management. a.A change in activity b.Sales volume a. Centralization b. Decentralization c. A given manager within a given period of time d. Production volume c. Empowerment d. Answer not given 10. To make goal setting effective and worthwhile, the goals should be: 17. He/she decides on which strategic business opportunity should the a. Just beyond what subordinates are likely to reach company undertake. b. Quantitative and approximate a. Profit Center Manager b. Cost Center Manager c. Based on superior performer‟s output c Investment Center Manager d. Revenue Center Manager d. Specific, objective and verifiable 18. This model in evaluating investment center performance encourages 11. It happens when the authority to make decisions is delegated to investment center managers to wisely take investment only for those which responsible officers in different organizational units. are of relevance to their operations. a. Centralization b. Decentralization a. The Residual Income Model b. Economic Value Added c. Empowerment d. Answer not given c. Equity Spread d. The Du Pont Model 12. A firm earning a profit can increase its return on investments by 19. Segmented income statements are most meaningful to managers when a. Increasing sales revenue and operating expenses by the same peso they are prepared amount a. On an absorption cost basis b. On a cost behavior basis b. Decreasing sales revenue and operating expenses by the same c. On a cash basis d. In a single-step format percentage 20. The invested capital turnover rate would include c. Increasing investments and operating expenses by the same peso a. Net income in the numerator b. Net income in the denominator amount c. Sales in the numerator d. Sales in the denominator d. Increasing sales revenue and operating expenses by the same percentage CHAPTER 4 13. He/she has a control or influence over the incurrence of costs. FALSE 1. If there is no alternative use of capacity, the incremental profit a. Profit Center Manager b. Cost Center Manager (loss) is the sum of incremental sales and incremental costs and expenses. c. Investment Center Manager d.Revenue Center Manager TRUE 2.If the acceptance of the special sales order creates an 14. He/she controls both the generation of income and incurrence of costs. unnecessary competition to the regular product sales, the special sales a. Profit Center Manager b. Cost Center Manager order is normally rejected. c. Investment Center Manager d. Revenue Center Manager TRUE 3. If the incremental sales are greater than the incremental costs of 15. He/she controls the generation of revenue further processing, it is advisable to sell the product as it is to maximize a. Profit Center Manager b. Cost Center Manager profit. c. Investment Center Manager d. Revenue Center Manager TRUE 4. Relevant cost is a cost that is applicable to a particular decision in 16.Which of the following is TRUE? the sense that it will have a bearing on which alternative the manager a. Either the responsibility or accountability could be present even without selects. the other FALSE 5. Planning is the core driver in making non routine operating b. Responsibility without authority is absolute power decisions. c. Authority without responsibility is blind obedience TRUE 6. A division, product line, department, or business unit is d. In equation, Authority = Responsibility represented by a business segment. FALSE 7. If the segment margin is negative, it means that the segment is contributing to the overall profitability of the organization. FALSE 8. If you continue the segment, the overall profitability of the 5. In the development of accounting data for decision-making purpose, business will be diminished by the amount of the positive segment margin. relevant cost are defined as TRUE 9. Segment margin is sometimes labeled as division margin, product A. Future cost which will differ under each alternative course of margin, or department margin. action TRUE 10. Any cost that is avoidable is relevant for decision purposes. B. The change in prime cost under each alternative course of action FALSE 11. Strategic decisions are regularly made to impact medium-term C. Standard cost which are developed by time and motion study organizational activities. Its focus is profitability and liquidity and it is techniques because of their relevance to managerial control. concerned with customer‟s satisfaction. D. Historical cost which are the best available basis for estimating future TRUE 12. Differential and future-oriented are the two important features of costs. relevant costs 6. The relevance of particular cost to a decision is determined by the TRUE 13. Decisions may be strategic, tactical or operational. A. Potential effect/s on the decision B.Amount of Cost TRUE 14. The primary interests served of strategic decision are financial C.Riskiness of the Decision D. Accuracy of the cost investors while tactical decision served the customers 7. The following are example of non-routine operating decisions except FALSE 15. The sunk costs refer to the highest possible benefit that may be A. Accept or Reject a Special Order B. Make or Buy a Product Component derived from the best alternative use of capacity. C. Selecting, hiring and training of personnel D Sell as is or process further 1. Which factor is not relevant in deciding whether or not to accept a 8. Among the costs relevant to a make-or-buy decision, include avoidable special order? fixed costs as well as A. Incremental revenue that will be earned. A. Unavoidable costs. B. Variable manufacturing costs B. Additional costs that will be incurred. C. Plant depreciation. D. Real estate taxes. C. The effect that the order will have on the company‟s regular sales 9. It is a revenue that differs between alternatives and makes a difference volume and selling price. in decision making D. The average cost of production if the special order is accepted. A. Incremental Revenue B. Sales Revenue 2. The opportunity cost of making a component part in a factory with no C. Unavoidable Revenue D. Relevant Revenue excess capacity is the …? 10. In making decision whether to sell or process further a product, this A. Cost of the production given up in order to manufacture the component. kind of analysis is being use to examine whether the additional revenue will B.Net benefit forgone from the best alternative use of the capacity exceed the additional costs to be incurred on the additional process required. A. Internal Analysis B. Production Analysis C. Variable manufacturing cost of the component. C. Budget Analysis D. Incremental Analysis D. Total manufacturing cost of the component. 11. Which would be an implicit cost for a firm? The cost: 3. Which of the following cost are always irrelevant in decision making? A) of worker wages and salaries for the firm. A. Avoidable Cost B. Sunk Cost C. Opportunity Cost D. Fixed Cost B) paid for leasing a building for the firm. 4. An Item whose entire amount is usually a differential cost is C) paid for production supplies for the firm. A. Factory Overhead B. Direct cost C. Conversion Cost D. Period Cost D) of wages foregone by the owner of the firm. 12. The marginal product of labor curve shows the change in total product a particular brand or for a specialized or unique product. resulting from a: FALSE 9. A market penetration pricing strategy calls for setting price levels a) one-unit increase in the quantity of a particular resource used, letting that are high enough to quickly build market share. other resources vary. TRUE 10. Transfer pricing is a term that applies to transactions between b) one-unit increase in the quantity of a particular resource used, different divisions or units of the same company. holding constant other resources. TRUE 11. Penetration prices often mean that the product may be sold at a c) change in the cost of a variable resource. loss for a certain period of time. d) change in the cost of a fixed resource. FALSE 12. Mark-up pricing is common in retailing. 13. are defined as the change in overall costs that result from particular TRUE 13. An organization uses various types of skimming, penetration, decisions being made. and odd pricing to increase an organization's sales. a) Incremental costs b) Book costs c) Sunk costs d) None of the above TRUE 14. The targeted value and price drive decisions about what costs 14. Incremental costs are also known as can be incurred and the resulting product design. a)avoidable costs b) escapable costs FALSE 15. There are three key elements to price setting: c) differential costs d) all of the above competitors‟ prices, consumers‟ perceptions of the product‟s value and 15. In order to maximise profits a firm endeavours to costs. a) increase its revenue b) lower its cost c) both (A) and (B) d) increase its capital 1. In this case, the net quantity variance may be divided into sales mix variance and sales yield variance. CHAPTER 5 a. Gross profit variations analysis b. Contribution margin variance analysis TRUE 1. The premium pricing model is based on the principle of scarcity of c. Multi-product sales operations d. Cost-based pricing resources and rationality of men. 2. The sales yield price is also called as TRUE 2. If the elasticity of demand is greater than 1, demand is considered a. Final sales volume variance b. Sales price variance elastic. c. Sales mix variance d. Cost price variance FALSE 3. The life stages of a product are normally divided into three. The 3. To compute for sales price variance, the formula to be use is controlled-market-based pricing based its prices on government regulations a. ∆ x unit gross profit last year b. ∆UCP x QSTY or implied agreements among key players in the market. c. ∆ x unit gross profit of current year d. ∆USP x QSTY TRUE 4. The controlled-market-based pricing based its prices on 4. To compute for cost price variance, the formula to be use is government regulations or implied agreements among key players in the a. ∆ x unit gross profit last year b. ∆UCP x QSTY market. c. ∆ x unit gross profit of current year d. ∆USP x QSTY TRUE 5. A gross profit variance is a difference between the actual gross 5. The mix variance is unfavorable if profit and a base gross profit. a. The actual quantity sold per product is greater than the actual FALSE 6. The sales yield variance is sometimes called as the cost quantity quantity at standard sales mix. variance. b. The actual quantity sold per product is less than the actual quantity at TRUE 7. Sales is a factor of number of units sold and a sales price. standard sales mix. TRUE 8. The market skimming pricing strategy is a part of a deliberate c. The actual quantity sold per product is equal to than the actual quantity attempt to reach a market segment that is willing to pay a premium price for at standard sales mix. d. None of the above. 12. The difference between the master budget amount and the amounts in 6. If sales this year and sales last year are normally available. The item to the flexible budget are due to: be calculated is the amount of _. a. activity level variances b. favorable variances a. Gross profit variance b. Cost of goods sold at unit cost prices last year. c. gaps in affectivity d. unfavorable variances c. Sales this year at unit sales prices last year. d. Sales price variance 13. In analyzing operation, the controller of Jay Corporation found a 7. If cost this year and cost last year are normally available. The item to be 250,000 favorable flexible budget revenue variance. The variance was calculated is the amount of _. calculated by comparing the actual result with the flexible budget. The a. Cost of goods sold at unit sales prices last year variance can be wholly explained by: b. Cost price variance a. the total flexible budget variance b. changing in unit selling prices c. Cost quantity variance c. the total static budget variance d. changes in the number of units sold d. Sales this year at unit sales prices last year. 14. Actual and budgeted information about the sales of a product are 8. STY @ USPLY also means presented below for June: a. Applied Cost this year b. Applied Sales this year Actual Budget c. Sales price variance d. Cost price variance Units 8,000 10,000 9. If the given is the Sales quantity variance, then what is the formula to be Sales revenue 92,000 105,000 used The sales price variance for June was: a. STY @ USPLY = Sales this year / (1± Sales price variance ratio ) a. 8,000 F b. 10,000 F c. 10,000 UF d. 105,000 UF b. CTY @ UCPLY = Cost this year / (1± Cost price variance ratio ) 15. What is the formula in computing the materials quantity variance? c. STY @ USPLY = Sales this year / (1± Sales quantity variance ratio ) a. (Actual unit price – standard unit price) x Actual quantity sold d. CTY @ UCPLY = Cost this year / (1± Cost quantity variance ratio ) b. (Sales price variance – unit sales price) x quantity sold this year 10. It given may be a sales price variance ratio or a sales quantity variance c. (Actual quantity – standard quantity) x Standard unit price ratio d. sales price variance + Cost price variance a. Sales price variance rate b. Sales this year at unit sales prices last year c. Sales quantity variance rate d. Sales variance ratio 11. In gross profit variation analysis, if the cost variance is zero such variance indicates that: a. manufacturing management was unable to keep production costs at budgeted costs. b. manufacturing management was able to control production costs below budgeted costs. c. manufacturing management was able to control production costs at budgeted costs. d. manufacturing management was not able to control production at budgeted cost but purchasing was able to keep at budgeted price.