1)What is the relationship between management by exception and variance analysis?

2. Select the possible source(s) of information a company might use to compute the budgeted amount in variance analysis?

3. Select the statement that best distinguishes between a favorable variance and an unfavorable variance.

4. What is the key difference between a static budget and a flexible budget?

5. Why might managers find a flexible-budget analysis more informative than a static budget analysis?

6.Select the choice that best describes the steps in developing a flexible budget.

7. Select the reason(s) for using standard costs:

8. Which of the following are possible causes of a favorable direct materials price variance?

10. How might a manager gain insight into the causes of a flexible-budget variance for direct materials?

11. How does variance analysis help in continuous improvement?

12. Why might an analyst examining variances in the production area look beyond that business function for explanations of those variances?

13. Comment on the following statement made by a plant manager:  “Meetings with my plant accountant are frustrating.  All he wants to do

is pin the blame on someone for the many variances he reports.”

14. How can variances be used to analyze costs in individual activity areas?

15. Determine is the following statement is true or false

“Benchmarking against other companies enables a company to identify the lowest-cost producer.  This amount must become the

performance measure for next year”