Question 1

Which of the following is not one of the steps in building an activity-based budget?

Accepted Answer

A) identifying activities 
B) classifying activities as value-added or nonvalue-added 
C) estimating the demand for each activity's output 
D) estimating the cost of producing the output demanded by each activity 
E) none of these 
A) identifying activities 
B) classifying activities as value-added or nonvalue-added 
C) estimating the demand for each activity's output 
D) estimating the cost of producing the output demanded by each activity 
E) none of these

Question 2

Inefficient usage of labor implies a(n)

Accepted Answer

A) both unfavorable variable overhead efficiency variance and unfavorable variable overhead spending variance. 
B) favorable variable overhead efficiency variance. 
C) unfavorable variable overhead spending variance. 
D) favorable variable overhead spending variance. 
E) unfavorable variable overhead efficiency variance. 
A) both unfavorable variable overhead efficiency variance and unfavorable variable overhead spending variance. 
B) favorable variable overhead efficiency variance. 
C) unfavorable variable overhead spending variance. 
D) favorable variable overhead spending variance. 
E) unfavorable variable overhead efficiency variance.

Question 3

In budgeting at the activity level,the cost behavior of each activity is defined with respect to

Accepted Answer

A) direct labor hours. 
B) machine hours. 
C) the activity output measure. 
D) the activity's resource driver. 
E) none of these. 
A) direct labor hours. 
B) machine hours. 
C) the activity output measure. 
D) the activity's resource driver. 
E) none of these.

Question 4

An activity-budgetary system has the following benefit(s):

Accepted Answer

A) it supports continuous improvement. 
B) it supports process management. 
C) it emphasizes cost reduction through elimination of wasteful activities. 
D) it helps improve the efficiency of necessary activities. 
E) all of these. 
A) it supports continuous improvement. 
B) it supports process management. 
C) it emphasizes cost reduction through elimination of wasteful activities. 
D) it helps improve the efficiency of necessary activities. 
E) all of these.

Question 5

A _____________________ compares actual costs with budgeted costs.

Accepted Answer

The answer of A _____________________ compares actual costs with budgeted...

Question 6

Harry Company's standard variable overhead rate is $6 per direct labor hour,and each unit requires 2 standard direct labor hours.During March,Harry recorded 6,000 actual direct labor hours,$37,000 actual variable overhead costs,and 2,900 units of product manufactured. What is the total variable overhead variance for March for Harry?

Accepted Answer

A) $1,200 U 
B) $600 U 
C) $1,000 U 
D) $2,200 U 
A) $1,200 U 
B) $600 U 
C) $1,000 U 
D) $2,200 U

Question 7

The variable overhead efficiency variance is directly related to the __________________ or usage variance.

Accepted Answer

direct lab

Question 8

Activity-based budgeting

Accepted Answer

A) builds a budget for each function. 
B) identifies only the overhead activity. 
C) classifies costs as variable or fixed with respect to the activity output measure. 
D) all of these. 
E) none of these. 
A) builds a budget for each function. 
B) identifies only the overhead activity. 
C) classifies costs as variable or fixed with respect to the activity output measure. 
D) all of these. 
E) none of these.

Question 9

Folson Company is planning to produce 4,250,000 speakers for the coming year.Actual production was 4,000,000 speakers.Each speaker requires 0.80 direct labor hours per unit.Predetermined overhead rates are calculated using expected production,measured in direct labor hours.The budgeted variable overhead for the coming year is $680,000.The actual variable overhead incurred was $714,000.The applied variable overhead for the year is

Accepted Answer

A) $800,000. 
B) $714,000. 
C) $640,000. 
D) $680,000. 
E) none of these. 
A) $800,000. 
B) $714,000. 
C) $640,000. 
D) $680,000. 
E) none of these.

Question 10

An activity-based budgetary approach can be used to emphasize cost reduction and process management.

Accepted Answer

A) True 
 B)False

Question 11

Activity-based budgeting supports continuous improvement and process management.

Accepted Answer

A) True 
 B)False

Question 12

Figure 11-6. Kyle Company uses forklifts to move materials from the storage area to the production floor.There are five forklifts.They are fully used 20 hours per day (making 8 moves per hour).The company works 320 days per year,running two seven-hour shifts per day.Fork-lift operators work 1,800 hours per year and are paid an annual salary of $56,000.
Based on a recent study each forklift uses 0.45 gallons of fuel per move.The cost of fuel is $3.80 per gallon.
Refer to Figure 11-6.Suppose that the actual moves made are 80% of the forklifts' capacity.What is the after-the-fact budgeted fuel cost?

Accepted Answer

A) $448,000 
B) $299,600 
C) $492,000 
D) $353,600 
E) $350,208 
A) $448,000 
B) $299,600 
C) $492,000 
D) $353,600 
E) $350,208

Question 13

The ____________________ budget gives expected outcomes for a range of activity levels.

Accepted Answer

The answer of The ____________________ budget gives expected outcomes for...

Question 14

Budgeted costs change because total variable costs go up as output increases,therefore flexible budgets are sometimes referred to as _______________.

Accepted Answer

The answer of Budgeted costs change because total variable costs...

Question 15

If an organization has implemented an ABC or ABM system,they will already have accomplished which of the following?

Accepted Answer

A) Identified the activities within an organization. 
B) Estimated the demand for each activity's output. 
C) Assessed the cost of resources required to produce this activity output. 
D) All of these. 
E) None of these 
A) Identified the activities within an organization. 
B) Estimated the demand for each activity's output. 
C) Assessed the cost of resources required to produce this activity output. 
D) All of these. 
E) None of these

Question 16

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.Calculate the after-the-fact budget for the actual level of activity.

Accepted Answer

A) $91,600 
B) $115,000 
C) $118,600 
D) $77,400 
E) none of these 
A) $91,600 
B) $115,000 
C) $118,600 
D) $77,400 
E) none of these

Question 17

Figure 11-6. Kyle Company uses forklifts to move materials from the storage area to the production floor.There are five forklifts.They are fully used 20 hours per day (making 8 moves per hour).The company works 320 days per year,running two seven-hour shifts per day.Fork-lift operators work 1,800 hours per year and are paid an annual salary of $56,000.
Based on a recent study each forklift uses 0.45 gallons of fuel per move.The cost of fuel is $3.80 per gallon.
Refer to Figure 11-6.Prepare a salary budget for the activity,moving materials.Assume that the labor market does not permit the hiring of part-time forklift operators.

Accepted Answer

A) $980,000 
B) $1,008,000 
C) $905,000 
D) $1,135,000 
E) $760,000 
A) $980,000 
B) $1,008,000 
C) $905,000 
D) $1,135,000 
E) $760,000

Question 18

Activity-based budgeting classifies costs as variable or fixed with respect to the activity output measure.

Accepted Answer

A) True 
 B)False

Question 19

A _________________ enables a firm to compute expected costs for a range of activity levels.

Accepted Answer

The answer of A _________________ enables a firm to compute...

Question 20

Figure 11-2. Lawson,Inc.produces plastic grocery bags.Lawson has developed a static budget for the month of July based on 8,000 direct labor hours.During the quarter,the actual activity was 9,000 direct labor hours.Data for July are summarized as follows:
  Refer to Figure 11-2.What is the flexible budget variance for July?

Accepted Answer

A) $12,000 U 
B) $12,000 F 
C) $29,000 U 
D) $29,000 F 
E) none of these 
A) $12,000 U 
B) $12,000 F 
C) $29,000 U 
D) $29,000 F 
E) none of these

Which of the following is not one of the steps in building an activity-based budget?

Inefficient usage of labor implies a(n)

In budgeting at the activity level,the cost behavior of each activity is defined with respect to

An activity-budgetary system has the following benefit(s):

A _____________________ compares actual costs with budgeted costs.

The variable overhead efficiency variance is directly related to the __________________ or usage variance.

Activity-based budgeting

An activity-based budgetary approach can be used to emphasize cost reduction and process management.

Activity-based budgeting supports continuous improvement and process management.

The ____________________ budget gives expected outcomes for a range of activity levels.

Budgeted costs change because total variable costs go up as output increases,therefore flexible budgets are sometimes referred to as _______________.

If an organization has implemented an ABC or ABM system,they will already have accomplished which of the following?

Activity-based budgeting classifies costs as variable or fixed with respect to the activity output measure.

A _________________ enables a firm to compute expected costs for a range of activity levels.

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

Which of the following is not one of the steps in building an activity-based budget?

Inefficient usage of labor implies a(n)

In budgeting at the activity level,the cost behavior of each activity is defined with respect to

An activity-budgetary system has the following benefit(s):

A _____________________ compares actual costs with budgeted costs.

The variable overhead efficiency variance is directly related to the __________________ or usage variance.

Activity-based budgeting

An activity-based budgetary approach can be used to emphasize cost reduction and process management.

Activity-based budgeting supports continuous improvement and process management.

The ____________________ budget gives expected outcomes for a range of activity levels.

Budgeted costs change because total variable costs go up as output increases,therefore flexible budgets are sometimes referred to as _______________.

If an organization has implemented an ABC or ABM system,they will already have accomplished which of the following?

Activity-based budgeting classifies costs as variable or fixed with respect to the activity output measure.

A _________________ enables a firm to compute expected costs for a range of activity levels.

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