Management Accounting - Study Mode
[#341] Pricing method used by services companies, such as home repair services, architectural firms and automobile repair services is known as
Correct Answer
(D) time and material method
Explanation
Solution: Pricing method used by services companies, such as home repair services, architectural firms and automobile repair services is known as time and material method. The Pricing Methods are the ways in which the price of goods and services can be calculated by considering all the factors such as the product/service, competition, target audience, product's life cycle, firm's vision of expansion, etc. influencing the pricing strategy as a whole.
[#342] If actual input quantity is 300 units and budgeted input quantity is 100 units, then efficiency variance will be
Correct Answer
(B) 200 units
Explanation
Solution: Efficiency variance = Actual input quantity - Budgeted input quantity = 300 units - 100 units = 200 units.
[#343] Cost allocation base used by an operating manager is classified as
Correct Answer
(A) machine hours
Explanation
Solution: Cost allocation base used by an operating manager is classified as machine hours. A machine-hour is a measurement used to apply factory overhead to manufactured goods. It is most applicable in machine-intensive environments where the amount of time spent in processing by a machine is the largest activity upon which overhead allocations can be based.
[#344] Difference between actual variable overhead cost and flexible budget variable overhead amount is termed as
Correct Answer
(A) overhead flexible budget variance
Explanation
Solution: Difference between actual variable overhead cost and flexible budget variable overhead amount is termed as overhead flexible budget variance. A flexible budget is a budget that shows differing levels of revenue and expense, based on the amount of sales activity that actually occurs.
[#345] Costing technique, which traces direct costs by multiplying price rate for producing actual outputs is known as
Correct Answer
(B) standard costing
Explanation
Solution: Costing technique, which traces direct costs by multiplying price rate for producing actual outputs is known as standard costing. Standard costing is the practice of substituting an expected cost for an actual cost in the accounting records. Subsequently, variances are recorded to show the difference between the expected and actual costs.