Question 1

A company provided the following data:
   Required:

Accepted Answer

The answer of A company provided the following data:
 ...

Question 2

Gina Production Company uses a standard costing system. The following information pertains to 2011:   The overhead rate is based on an activity level of 10,000 hours. Standard cost data for 5,000 units is as follows:
  What is the fixed overhead volume variance for Gina Production Company?

Accepted Answer

A)  $1,350 F 
B)  $3,600 F 
C)  $4,125 U 
D)  $1,350 U 
A)  $1,350 F 
B)  $3,600 F 
C)  $4,125 U 
D)  $1,350 U

Question 3

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 4

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 5

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.

Question 6

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 7

______________________ is a prerequisite for assigning responsibility.

Accepted Answer

The answer of ______________________ is a prerequisite for assigning responsibility....

Question 8

In an activity flexible budget, the variable cost component typically corresponds to

Accepted Answer

A)  those resources that vary with direct labor hours. 
B)  resources acquired as needed. 
C)  resources acquired in advance of usage. 
D)  resources that do not change as the activity output changes. 
E)  None of these. 
A)  those resources that vary with direct labor hours. 
B)  resources acquired as needed. 
C)  resources acquired in advance of usage. 
D)  resources that do not change as the activity output changes. 
E)  None of these.

Question 9

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 10

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 applied fixed overhead.

Accepted Answer

A)  $973,080 
B)  $855,030 
C)  $964,000 
D)  $910,000 
E)  None of these. 
A)  $973,080 
B)  $855,030 
C)  $964,000 
D)  $910,000 
E)  None of these.

Question 11

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 12

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 13

Figure 11-7.
Larry Miller, controller for Kipling Company, has been instructed to develop a flexible budget for overhead costs. The company produces two types of frozen desserts: Icey and Tasty. The two desserts use common raw materials in different proportions. The company expects to produce 200,000 gallons of each product during the coming year. Icey requires 0.25 direct labor hour per gallon and Tasty requires 0.30. Larry has developed the following fixed and variable costs for each of the four overhead items:
  
-Refer to Figure 11-7.
Required:

Accepted Answer

The answer of Figure 11-7.
Larry Miller, controller for Kipling Company,...

Question 14

Gallant Company uses standard costing. Overhead is applied to products on the basis of standard direct labor hours for actual production. Data for Gallant follows:

Accepted Answer

The answer of Gallant Company uses standard costing. Overhead is...

Question 15

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 variable overhead efficiency variance.

Accepted Answer

A)  $36,850 U 
B)  $80,000 U 
C)  $36,850 F 
D)  $4,000 U 
E)  None of these. 
A)  $36,850 U 
B)  $80,000 U 
C)  $36,850 F 
D)  $4,000 U 
E)  None of these.

Question 16

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 fixed overhead rate is

Accepted Answer

A)  $3.35 per direct labor hour. 
B)  $1.02 per direct labor hour. 
C)  $5.50 per direct labor hour. 
D)  $4 per direct labor hour. 
E)  None of these. 
A)  $3.35 per direct labor hour. 
B)  $1.02 per direct labor hour. 
C)  $5.50 per direct labor hour. 
D)  $4 per direct labor hour. 
E)  None of these.

Question 17

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

Accepted Answer

fixed over

Question 18

Practical capacity is always used to calculate fixed overhead rates

Accepted Answer

A) True 
 B)False

Question 19

Responsibility for the variable overhead spending variance is usually assigned to

Accepted Answer

A)  the purchasing department. 
B)  the production department. 
C)  the engineering department. 
D)  the personnel department. 
E)  None of these. 
A)  the purchasing department. 
B)  the production department. 
C)  the engineering department. 
D)  the personnel department. 
E)  None of these.

Question 20

Budgeted variable overhead for the year is $120,000. Expected activity is 20,000 standard direct labor hours. The actual hours worked were 18,000 and the standard hours allowed for actual production were 19,500. The variable overhead efficiency variance is

Accepted Answer

A)  $0. 
B)  $12,000 F. 
C)  $3,000 F. 
D)  $9,000 F. 
E)  None of these. 
A)  $0. 
B)  $12,000 F. 
C)  $3,000 F. 
D)  $9,000 F. 
E)  None of these.

A company provided the following data: Required:

Gina Production Company uses a standard costing system. The following information pertains to 2011: The overhead rate is based on an activity level of 10,000 hours. Standard cost data for 5,000 units is as follows: What is the fixed overhead volume variance for Gina Production Company?

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

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

An unfavorable variable overhead spending variance may be caused by

______________________ is a prerequisite for assigning responsibility.

In an activity flexible budget, the variable cost component typically corresponds to

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

Which budget should be used to determine managerial effectiveness?

Gallant Company uses standard costing. Overhead is applied to products on the basis of standard direct labor hours for actual production. Data for Gallant follows:

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

Practical capacity is always used to calculate fixed overhead rates

Responsibility for the variable overhead spending variance is usually assigned to

Budgeted variable overhead for the year is $120,000. Expected activity is 20,000 standard direct labor hours. The actual hours worked were 18,000 and the standard hours allowed for actual production were 19,500. The variable overhead efficiency variance is

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

A company provided the following data: Required:

Gina Production Company uses a standard costing system. The following information pertains to 2011: The overhead rate is based on an activity level of 10,000 hours. Standard cost data for 5,000 units is as follows: What is the fixed overhead volume variance for Gina Production Company?

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

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

An unfavorable variable overhead spending variance may be caused by

______________________ is a prerequisite for assigning responsibility.

In an activity flexible budget, the variable cost component typically corresponds to

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

Which budget should be used to determine managerial effectiveness?

Gallant Company uses standard costing. Overhead is applied to products on the basis of standard direct labor hours for actual production. Data for Gallant follows:

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

Practical capacity is always used to calculate fixed overhead rates

Responsibility for the variable overhead spending variance is usually assigned to

Budgeted variable overhead for the year is $120,000. Expected activity is 20,000 standard direct labor hours. The actual hours worked were 18,000 and the standard hours allowed for actual production were 19,500. The variable overhead efficiency variance is

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