Question 1

How does activity flexible budgeting differ from traditional-based flexible budgeting?

Accepted Answer

Activity flexible budgeting is the predi

Question 2

The _________________________ focuses on the estimation of the costs of activities rather than the costs of departments and plants.

Accepted Answer

Activity-b

Question 3

What is the fixed overhead volume variance? Suppose that the fixed overhead volume variance is unfavorable; what does that mean?

Accepted Answer

The fixed overhead volume variance is th

Question 4

The variable overhead efficiency variance claims to measure

Accepted Answer

A) changes in spending efficiency. 
B) productive efficiency. 
C) changes in variable overhead costs because of the efficient (inefficient)use of the cost driver. 
D) changes in variable overhead costs attributable to inefficient purchase of variable inputs. 
E) none of these 
A) changes in spending efficiency. 
B) productive efficiency. 
C) changes in variable overhead costs because of the efficient (inefficient)use of the cost driver. 
D) changes in variable overhead costs attributable to inefficient purchase of variable inputs. 
E) none of these

Question 5

Price changes of variable overhead items are easily controlled by production supervisors.

Accepted Answer

A) True 
 B)False

Question 6

A budget that allows the determination of expected costs for various levels of activity is a(n)

Accepted Answer

A) operational budget. 
B) sales budget. 
C) production budget. 
D) financial budget. 
E) flexible budget. 
A) operational budget. 
B) sales budget. 
C) production budget. 
D) financial budget. 
E) flexible budget.

Question 7

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.Calculate the fixed overhead spending variance.

Accepted Answer

A) $32,000 F 
B) $0 
C) $4,000 U 
D) $12,000 U 
E) $4,000 F 
A) $32,000 F 
B) $0 
C) $4,000 U 
D) $12,000 U 
E) $4,000 F

Question 8

The first step of building an activity-based budget is to identify the activities within an organization.

Accepted Answer

A) True 
 B)False

Question 9

A _______________ is a budget created in advance that is based on a particular level of activity.

Accepted Answer

The answer of A _______________ is a budget created in...

Question 10

Activity flexible budgeting is the prediction of what activity costs will be as production output changes.

Accepted Answer

A) True 
 B)False

Question 11

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 amount for the first quarter?

Accepted Answer

A) $288,000 
B) $311,000 
C) $312,000 
D) $261,000 
E) Cannot be determined 
A) $288,000 
B) $311,000 
C) $312,000 
D) $261,000 
E) Cannot be determined

Question 12

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.Comparing the static budget to the actual costs,we can conclude that

Accepted Answer

A) the manager spent more than should have been spent. 
B) immediate action is needed to reduce costs. 
C) the plant manager was clearly not efficient. 
D) the plant manager should be dismissed. 
E) none of these. 
A) the manager spent more than should have been spent. 
B) immediate action is needed to reduce costs. 
C) the plant manager was clearly not efficient. 
D) the plant manager should be dismissed. 
E) none of these.

Question 13

The ________________ budget is based on the actual level of activity.

Accepted Answer

The answer of The ________________ budget is based on the...

Question 14

Fixed overhead costs are resources acquired as used and needed.

Accepted Answer

A) True 
 B)False

Question 15

The variable overhead variance is affected by input price changes only.

Accepted Answer

A) True 
 B)False

Question 16

Griffen Corporation uses a standard costing system.Information for the month of May is as follows:   The factory overhead rate is based on a normal volume of 12,000 direct labor hours.Standard cost data at 12,000 direct labor hours were as follows:
  What is the variable overhead efficiency variance for Griffen?

Accepted Answer

A) $2,000 U 
B) $8,000 U 
C) $4,000 U 
D) $20,000 U 
A) $2,000 U 
B) $8,000 U 
C) $4,000 U 
D) $20,000 U

Question 17

Which budget is used to assess managerial efficiency?

Accepted Answer

A) sales budget 
B) production budget 
C) static budget 
D) flexible budget 
E) cash budget 
A) sales budget 
B) production budget 
C) static budget 
D) flexible budget 
E) cash budget

Question 18

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.Using an after-the-fact flexible budget,calculate the total budget variance.

Accepted Answer

A) $12,510 U 
B) $3,600 U 
C) $5,000 F 
D) $12,510 F 
E) none of these. 
A) $12,510 U 
B) $3,600 U 
C) $5,000 F 
D) $12,510 F 
E) none of these.

Question 19

Discuss why activity flexible budgeting provides a more accurate prediction of costs than a traditional flexible budget.

Accepted Answer

Activity-based flexible budgeting is mor

Question 20

Assume that the expectations on the static budget were met.We can conclude that

Accepted Answer

A) the static budget was ill conceived. 
B) the effectiveness of the manager is not in question. 
C) the manager is very efficient. 
D) there is no need for a flexible budget. 
E) none of these. 
A) the static budget was ill conceived. 
B) the effectiveness of the manager is not in question. 
C) the manager is very efficient. 
D) there is no need for a flexible budget. 
E) none of these.

How does activity flexible budgeting differ from traditional-based flexible budgeting?

The _________________________ focuses on the estimation of the costs of activities rather than the costs of departments and plants.

What is the fixed overhead volume variance? Suppose that the fixed overhead volume variance is unfavorable; what does that mean?

The variable overhead efficiency variance claims to measure

Price changes of variable overhead items are easily controlled by production supervisors.

A budget that allows the determination of expected costs for various levels of activity is a(n)

The first step of building an activity-based budget is to identify the activities within an organization.

A _______________ is a budget created in advance that is based on a particular level of activity.

Activity flexible budgeting is the prediction of what activity costs will be as production output changes.

The ________________ budget is based on the actual level of activity.

Fixed overhead costs are resources acquired as used and needed.

The variable overhead variance is affected by input price changes only.

Which budget is used to assess managerial efficiency?

Discuss why activity flexible budgeting provides a more accurate prediction of costs than a traditional flexible budget.

Assume that the expectations on the static budget were met.We can conclude that

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

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Exam 11: Flexible Budgets and Overhead Analysis

How does activity flexible budgeting differ from traditional-based flexible budgeting?

The _________________________ focuses on the estimation of the costs of activities rather than the costs of departments and plants.

What is the fixed overhead volume variance? Suppose that the fixed overhead volume variance is unfavorable; what does that mean?

The variable overhead efficiency variance claims to measure

Price changes of variable overhead items are easily controlled by production supervisors.

A budget that allows the determination of expected costs for various levels of activity is a(n)

The first step of building an activity-based budget is to identify the activities within an organization.

A _______________ is a budget created in advance that is based on a particular level of activity.

Activity flexible budgeting is the prediction of what activity costs will be as production output changes.

The ________________ budget is based on the actual level of activity.

Fixed overhead costs are resources acquired as used and needed.

The variable overhead variance is affected by input price changes only.

Which budget is used to assess managerial efficiency?

Discuss why activity flexible budgeting provides a more accurate prediction of costs than a traditional flexible budget.

Assume that the expectations on the static budget were met.We can conclude that

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