Question 1

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 2

The following costs were developed for one of the products of Larry Corporation:
   The following information is available regarding the company's operations for the period:
   Budgeted fixed overhead for the period is $960,000, and the standard fixed overhead rate is based on expected capacity of 80,000 direct labor hours.
Required:

Accepted Answer

The answer of The following costs were developed for one...

Question 3

The total fixed overhead variance is

Accepted Answer

A)  actual fixed overhead - applied fixed overhead. 
B)  the sum of the spending and volume variances. 
C)  the sum of the spending and efficiency variances. 
D)  both actual fixed overhead - applied fixed overhead and the sum of the spending and efficiency variances. 
E)  both actual fixed overhead - applied fixed overhead and the sum of the spending and volume variances. 
A)  actual fixed overhead - applied fixed overhead. 
B)  the sum of the spending and volume variances. 
C)  the sum of the spending and efficiency variances. 
D)  both actual fixed overhead - applied fixed overhead and the sum of the spending and efficiency variances. 
E)  both actual fixed overhead - applied fixed overhead and the sum of the spending and volume variances.

Question 4

Bushman Company is planning to produce 3,200,000 carburetors for the coming year. Each carburetor requires 0.375 standard hours of labor for completion. The company uses direct labor hours to assign overhead to products. The total fixed overhead budgeted for the coming year is $1,980,000. Total budgeted overhead is $4,050,000. Predetermined overhead rates are calculated using expected production, measured in direct labor hours. Actual results for the year follow:
   Required:

Accepted Answer

The answer of Bushman Company is planning to produce 3,200,000...

Question 5

McCordy Company provided information on the following three overhead activities:
   McCordy has found that the following driver levels are associated with two different levels of production:

Accepted Answer

The answer of McCordy Company provided information on the following...

Question 6

Discuss the following statement: "Since fixed overhead is, by definition, not related to changes in activity level, then the fixed overhead spending variance is zero."

Accepted Answer

It is true that fixed overhead costs do

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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 10

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 11

Fixed overhead costs are resources acquired as used and needed.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

Activity-b

Question 13

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 14

The volume variance is often interpreted as a measure of capacity utilization.

Accepted Answer

A) True 
 B)False

Question 15

A company had the following information for the year:
   Required:

Accepted Answer

The answer of A company had the following information for...

Question 16

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 17

A static budget is best used to

Accepted Answer

A)  measure whether or not a manager accomplishes his or her goals. 
B)  compare expected costs at the actual level of activity with the actual costs. 
C)  assess how well costs were controlled during the year. 
D)  determine managerial efficiency. 
E)  None of these. 
A)  measure whether or not a manager accomplishes his or her goals. 
B)  compare expected costs at the actual level of activity with the actual costs. 
C)  assess how well costs were controlled during the year. 
D)  determine managerial efficiency. 
E)  None of these.

Question 18

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

Accepted Answer

sales, pro

Question 19

A difference between the actual amount and the flexible budget amount is known as the ____________________.

Accepted Answer

flexible b

Question 20

During the year, Hawkings produced 10,000 units, used 20,000 direct labor hours, and incurred variable overhead of $90,000. Budgeted variable overhead for the year was $88,000. The hours allowed per unit are 2.1. The standard variable overhead rate is $4.00 per direct labor hour. The variable overhead spending variance is

Accepted Answer

A)  $2,000 F. 
B)  $6,000 U. 
C)  $10,000 U. 
D)  $2,000 U. 
E)  None of these. 
A)  $2,000 F. 
B)  $6,000 U. 
C)  $10,000 U. 
D)  $2,000 U. 
E)  None of these.

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

The total fixed overhead variance is

McCordy Company provided information on the following three overhead activities: McCordy has found that the following driver levels are associated with two different levels of production:

Discuss the following statement: "Since fixed overhead is, by definition, not related to changes in activity level, then the fixed overhead spending variance is zero."

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

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

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

Fixed overhead costs are resources acquired as used and needed.

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

The volume variance is often interpreted as a measure of capacity utilization.

A company had the following information for the year: Required:

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

A static budget is best used to

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

A difference between the actual amount and the flexible budget amount is known as the ____________________.

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

The total fixed overhead variance is

McCordy Company provided information on the following three overhead activities: McCordy has found that the following driver levels are associated with two different levels of production:

Discuss the following statement: "Since fixed overhead is, by definition, not related to changes in activity level, then the fixed overhead spending variance is zero."

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

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

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

Fixed overhead costs are resources acquired as used and needed.

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

The volume variance is often interpreted as a measure of capacity utilization.

A company had the following information for the year: Required:

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

A static budget is best used to

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

A difference between the actual amount and the flexible budget amount is known as the ____________________.

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.