Question 1

The formula for the fixed overhead volume variance is

Accepted Answer

A) (AFOH - SFOR)´ SH 
B) (AFOH - SFOR)´ AH 
C) AFOH - BFOH 
D) (AFOH - SFOR)´ SH. 
E) none of these 
A) (AFOH - SFOR)´ SH 
B) (AFOH - SFOR)´ AH 
C) AFOH - BFOH 
D) (AFOH - SFOR)´ SH. 
E) none of these

Question 2

An unfavorable variable overhead spending variance may be caused by

Accepted Answer

A) the use of excessive quantities of variable overhead items. 
B) the payment of lower prices for variable overhead items used. 
C) the use of excessive quantities of the variable overhead allocation base. 
D) both the use of excessive quantities of variable overhead items and the payment of lower prices for variable overhead items used. 
A) the use of excessive quantities of variable overhead items. 
B) the payment of lower prices for variable overhead items used. 
C) the use of excessive quantities of the variable overhead allocation base. 
D) both the use of excessive quantities of variable overhead items and the payment of lower prices for variable overhead items used.

Question 3

Figure 11-1. Jason,Inc.produces leather purses.Jason has developed a static budget for the first quarter,based on 20,000 direct labor hours.During the quarter,the actual activity was 22,000 direct labor hours.Data for the first quarter are summarized as follows:
  Refer to Figure 11-1.What is the flexible budget variance for the first quarter?

Accepted Answer

A) $1,000 U 
B) $23,000 U 
C) $23,000 F 
D) $1,000 F 
E) none of these 
A) $1,000 U 
B) $23,000 U 
C) $23,000 F 
D) $1,000 F 
E) none of these

Question 4

Crawford Company's standard fixed overhead cost is $6 per direct labor hour based on budgeted fixed costs of $600,000.The standard allows 1 direct labor hours per unit.During 2011,Crawford produced 110,000 units of product,incurred $630,000 of fixed overhead costs,and recorded 212,000 actual hours of direct labor.
What is the activity level on which Crawford based its fixed overhead rate?

Accepted Answer

A) 110,000 direct labor hours 
B) 105,000 direct labor hours 
C) 100,000 direct labor hours 
D) 50,000 direct labor hours 
A) 110,000 direct labor hours 
B) 105,000 direct labor hours 
C) 100,000 direct labor hours 
D) 50,000 direct labor hours

Question 5

At the beginning of the year,Folsom Company had the following standard cost sheet for one of its food products:
   Folsom computes its overhead rates using practical capacity,which is 72,000 units.The actual results for the year are:

Accepted Answer

The answer of At the beginning of the year,Folsom Company...

Question 6

The following standard overhead costs were developed for one of the products of Mildey Company:
   The following information is available regarding the company's operations for the period:
   Budgeted fixed overhead for the period is $1,350,000,and the standard fixed overhead rate is based on expected capacity of 90,000 direct labor hours.
Required:

Accepted Answer

The answer of The following standard overhead costs were developed...

Question 7

Figure 11-5. Merric Company uses an activity-based costing system.Four activities have been identified.The setup activity uses the number of setups as its cost driver.The following budget information is available for this activity:
  The company expects to perform 25 setups in May.
Refer to Figure 11-5.Actual costs incurred were $246,000 fixed and $144,000 variable.If the actual number of setups in May was 30,what is the activity-based flexible budget variance?

Accepted Answer

A) $15,000 U 
B) $15,000 F 
C) $12,000 F 
D) $12,000 U 
A) $15,000 U 
B) $15,000 F 
C) $12,000 F 
D) $12,000 U

Question 8

Activity-based budgeting begins with the _____________ and _______________ budgets.

Accepted Answer

The answer of Activity-based budgeting begins with the _____________ and...

Question 9

The ______________________ is the difference between the actual fixed overhead and the budgeted fixed overhead.

Accepted Answer

fixed over

Question 10

Figure 11-5. Merric Company uses an activity-based costing system.Four activities have been identified.The setup activity uses the number of setups as its cost driver.The following budget information is available for this activity:
  The company expects to perform 25 setups in May.
Refer to Figure 11-5.If the company expects 25 setups in the month of May,what would be the total budgeted costs of the setup activity?

Accepted Answer

A) $240,000 
B) $375,000 
C) $135,000 
D) $397,500 
E) none of these 
A) $240,000 
B) $375,000 
C) $135,000 
D) $397,500 
E) none of these

Question 11

Mills Company uses standard costing for direct materials and direct labor.Management would like to use standard costing for variable and fixed overhead.
The following monthly cost functions were developed for overhead items:
   The cost functions are considered reliable within a relevant range of 20,000 to 40,000 direct labor hours.The company expects to operate at 25,000 direct labor hours per month.
Information for the month of June is as follows:
   Required:

Accepted Answer

The answer of Mills Company uses standard costing for direct...

Question 12

Fixed overhead was budgeted at $84,000 and 10,000 direct labor hours were budgeted.If the fixed overhead volume variance was $3,200 unfavorable and the fixed overhead spending variance was $1,200 favorable,fixed overhead applied must be

Accepted Answer

A) $85,200. 
B) $80,800. 
C) $82,800. 
D) $82,000. 
E) $87,200. 
A) $85,200. 
B) $80,800. 
C) $82,800. 
D) $82,000. 
E) $87,200.

Question 13

The formula for the variable overhead spending variance can be expressed as follows:

Accepted Answer

A) (AH - SH)SVOR 
B) (AVOR - SVOR)SH 
C) (AVOR - SVOR)AH 
D) (AH - SH)AVOR 
E) none of these 
A) (AH - SH)SVOR 
B) (AVOR - SVOR)SH 
C) (AVOR - SVOR)AH 
D) (AH - SH)AVOR 
E) none of these

Question 14

Figure 11-4. Kris Company calculates its predetermined rates using practical volume,which is 325,000 units.The standard cost system allows 3 direct labor hours per unit produced.Overhead is applied using direct labor hours.The total budgeted overhead is $4,260,000,of which $994,000 is fixed overhead.The actual results for the year are as follows:
  Refer to Figure 11-4.The predetermined variable overhead rate is:

Accepted Answer

A) $3.00 per direct labor hour. 
B) $2.50 per direct labor hour. 
C) $5.50 per direct labor hour. 
D) $3.35 per direct labor hour. 
E) none of these are correct. 
A) $3.00 per direct labor hour. 
B) $2.50 per direct labor hour. 
C) $5.50 per direct labor hour. 
D) $3.35 per direct labor hour. 
E) none of these are correct.

Question 15

Figure 11-3. Montgomery Company has developed the following flexible budget formulas for its four overhead items:
  Montgomery normally produces 15,000 units (each unit requires 0.30 direct labor hours); however this year 19,000 units were produced with the following actual costs:
  Refer to Figure 11-3.Prepare an overhead budget for the expected activity level of 10,000 units.The total budgeted overhead is

Accepted Answer

A) $139,400. 
B) $64,400. 
C) $124,000. 
D) $12,400. 
E) none of these. 
A) $139,400. 
B) $64,400. 
C) $124,000. 
D) $12,400. 
E) none of these.

Question 16

A before-the-fact flexible budget

Accepted Answer

A) calculates expected costs for various levels of activity. 
B) allows managers to deal with uncertainty. 
C) can be used to generate results for a number of plausible scenarios. 
D) is a useful planning tool. 
E) all of these. 
A) calculates expected costs for various levels of activity. 
B) allows managers to deal with uncertainty. 
C) can be used to generate results for a number of plausible scenarios. 
D) is a useful planning tool. 
E) all of these.

Question 17

Practical capacity is always used to calculate fixed overhead rates

Accepted Answer

A) True 
 B)False

Question 18

Which budget should be used to determine managerial effectiveness?

Accepted Answer

A) before-the-fact flexible budget 
B) after-the-fact flexible budget 
C) static budget 
D) financial budget 
E) cash budget 
A) before-the-fact flexible budget 
B) after-the-fact flexible budget 
C) static budget 
D) financial budget 
E) cash budget

Question 19

When overhead is applied on the basis of direct labor hours,the variable overhead efficiency variance always has the same sign as the labor efficiency variance.

Accepted Answer

A) True 
 B)False

Question 20

Activity flexible budgeting

Accepted Answer

A) improves performance reporting. 
B) allows the prediction of activity costs as activity output changes. 
C) enhances the ability to manage activities. 
D) improves the ability to plan and monitor activity improvements. 
E) does all of these. 
A) improves performance reporting. 
B) allows the prediction of activity costs as activity output changes. 
C) enhances the ability to manage activities. 
D) improves the ability to plan and monitor activity improvements. 
E) does all of these.

The formula for the fixed overhead volume variance is

An unfavorable variable overhead spending variance may be caused by

At the beginning of the year,Folsom Company had the following standard cost sheet for one of its food products: Folsom computes its overhead rates using practical capacity,which is 72,000 units.The actual results for the year are:

Activity-based budgeting begins with the _ and ___ budgets.

The ______________________ is the difference between the actual fixed overhead and the budgeted fixed overhead.

Fixed overhead was budgeted at $84,000 and 10,000 direct labor hours were budgeted.If the fixed overhead volume variance was $3,200 unfavorable and the fixed overhead spending variance was $1,200 favorable,fixed overhead applied must be

The formula for the variable overhead spending variance can be expressed as follows:

A before-the-fact flexible budget

Practical capacity is always used to calculate fixed overhead rates

Which budget should be used to determine managerial effectiveness?

When overhead is applied on the basis of direct labor hours,the variable overhead efficiency variance always has the same sign as the labor efficiency variance.

Activity flexible budgeting

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 11: Flexible Budgets and Overhead Analysis

The formula for the fixed overhead volume variance is

An unfavorable variable overhead spending variance may be caused by

At the beginning of the year,Folsom Company had the following standard cost sheet for one of its food products: Folsom computes its overhead rates using practical capacity,which is 72,000 units.The actual results for the year are:

Activity-based budgeting begins with the _____________ and _______________ budgets.

The ______________________ is the difference between the actual fixed overhead and the budgeted fixed overhead.

Fixed overhead was budgeted at $84,000 and 10,000 direct labor hours were budgeted.If the fixed overhead volume variance was $3,200 unfavorable and the fixed overhead spending variance was $1,200 favorable,fixed overhead applied must be

The formula for the variable overhead spending variance can be expressed as follows:

A before-the-fact flexible budget

Practical capacity is always used to calculate fixed overhead rates

Which budget should be used to determine managerial effectiveness?

When overhead is applied on the basis of direct labor hours,the variable overhead efficiency variance always has the same sign as the labor efficiency variance.

Activity flexible budgeting

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Profit Planning

Standard Costing: a Managerial Control Tool

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Statement of Cash Flows

Financial Statement Analysis

Filters

Activity-based budgeting begins with the _ and ___ budgets.