Question 1

The fixed overhead volume variance is a measure of

Accepted Answer

A)  the cost of overspending on fixed overhead items. 
B)  the effect of the actual output differing from the output used to calculate the predetermined fixed overhead rate. 
C)  the cost of unused activity capacity acquired. 
D)  both the cost of overspending on fixed overhead items and the effect of the actual output differing from the output used to calculate predetermined fixed overhead rate. 
E)  both the effect of the actual output differing from the output used to calculate the predetermined fixed overhead rate and the cost of unused activity capacity. 
A)  the cost of overspending on fixed overhead items. 
B)  the effect of the actual output differing from the output used to calculate the predetermined fixed overhead rate. 
C)  the cost of unused activity capacity acquired. 
D)  both the cost of overspending on fixed overhead items and the effect of the actual output differing from the output used to calculate predetermined fixed overhead rate. 
E)  both the effect of the actual output differing from the output used to calculate the predetermined fixed overhead rate and the cost of unused activity capacity.

Question 2

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 variance for maintenance using an after-the-fact flexible budget.

Accepted Answer

A)  $13,000 U 
B)  $13,100 F 
C)  $11,000 U 
D)  $1,000 F 
E)  None of these. 
A)  $13,000 U 
B)  $13,100 F 
C)  $11,000 U 
D)  $1,000 F 
E)  None of these.

Question 3

The two variances for fixed overhead are

Accepted Answer

A)  budget and volume. 
B)  spending and budget. 
C)  volume and spending. 
D)  efficiency and volume. 
E)  volume and efficiency. 
A)  budget and volume. 
B)  spending and budget. 
C)  volume and spending. 
D)  efficiency and volume. 
E)  volume and efficiency.

Question 4

The two variances for variable overhead are

Accepted Answer

A)  spending and efficiency variances. 
B)  spending and budget variances. 
C)  budget and volume variances. 
D)  spending and volume variances. 
E)  volume and efficiency variances. 
A)  spending and efficiency variances. 
B)  spending and budget variances. 
C)  budget and volume variances. 
D)  spending and volume variances. 
E)  volume and efficiency variances.

Question 5

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 6

The standard fixed overhead rate is often calculated as

Accepted Answer

A)  budgeted fixed overhead divided by practical capacity measured in standard hours. 
B)  actual fixed overhead divided by practical capacity measured in standard hours. 
C)  budgeted fixed overhead divided by actual hours. 
D)  budgeted fixed overhead divided by practical capacity measured in actual hours. 
E)  None of these. 
A)  budgeted fixed overhead divided by practical capacity measured in standard hours. 
B)  actual fixed overhead divided by practical capacity measured in standard hours. 
C)  budgeted fixed overhead divided by actual hours. 
D)  budgeted fixed overhead divided by practical capacity measured in actual hours. 
E)  None of these.

Question 7

The ________________________ measures the change in the actual variable overhead cost that occurs because of efficient (or inefficient) use of direct labor

Accepted Answer

variable o

Question 8

A static budget is

Accepted Answer

A)  considered a good choice for benchmarks in preparing a performance report. 
B)  computes expected costs for a range of activity levels. 
C)  compares actual costs with budgeted costs. 
D)  prepared for a particular level of activity. 
E)  None of these are correct. 
A)  considered a good choice for benchmarks in preparing a performance report. 
B)  computes expected costs for a range of activity levels. 
C)  compares actual costs with budgeted costs. 
D)  prepared for a particular level of activity. 
E)  None of these are correct.

Question 9

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 10

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 11

Often, the flexible budget formulas are based on ________________ instead of units.

Accepted Answer

The answer of Often, the flexible budget formulas are based...

Question 12

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 13

Fixed overhead was budgeted at $200,000, and 25,000 direct labor hours were budgeted. If the fixed overhead volume variance was $8,000 favorable and the fixed overhead spending variance was $6,000 unfavorable, fixed overhead applied must be

Accepted Answer

A)  $208,000. 
B)  $206,000. 
C)  $202,000. 
D)  $194,000. 
A)  $208,000. 
B)  $206,000. 
C)  $202,000. 
D)  $194,000.

Question 14

A _____________________ compares actual costs with budgeted costs.

Accepted Answer

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

Question 15

The _____________________ is the difference between actual fixed overhead and applied fixed overhead.

Accepted Answer

total fixe

Question 16

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 17

Flexible budgets are powerful control tools because

Accepted Answer

A)  they allow managers to deal with uncertainty. 
B)  they allow the calculation of what cost should be for the actual level of activity. 
C)  they allow the preparation of meaningful performance reports. 
D)  they help measure managerial efficiency. 
E)  All of these. 
A)  they allow managers to deal with uncertainty. 
B)  they allow the calculation of what cost should be for the actual level of activity. 
C)  they allow the preparation of meaningful performance reports. 
D)  they help measure managerial efficiency. 
E)  All of these.

Question 18

Shorts, Inc. produces small engines. For last year's operations, the following data were gathered:   Shorts, Inc. employs a standard costing system. During the year, a variable overhead rate of $8.00 was used. The labor standard requires 1.5 hours per unit produced. The variable overhead spending and efficiency variances are, respectively

Accepted Answer

A)  $100,000 U and $20,000 U. 
B)  $100,000 U and $20,000 F. 
C)  $20,000 U and $80,000 U. 
D)  $20,000 U and $80,000 F. 
E)  None of these. 
A)  $100,000 U and $20,000 U. 
B)  $100,000 U and $20,000 F. 
C)  $20,000 U and $80,000 U. 
D)  $20,000 U and $80,000 F. 
E)  None of these.

Question 19

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 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 fixed overhead volume variance is a measure of

The two variances for fixed overhead are

The two variances for variable overhead are

The standard fixed overhead rate is often calculated as

The ________________________ measures the change in the actual variable overhead cost that occurs because of efficient (or inefficient) use of direct labor

A static budget is

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

Often, the flexible budget formulas are based on ________________ instead of units.

Inefficient usage of labor implies a(n)

Fixed overhead was budgeted at $200,000, and 25,000 direct labor hours were budgeted. If the fixed overhead volume variance was $8,000 favorable and the fixed overhead spending variance was $6,000 unfavorable, fixed overhead applied must be

A _____________________ compares actual costs with budgeted costs.

The _____________________ is the difference between actual fixed overhead and applied fixed overhead.

Flexible budgets are powerful control tools because

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 fixed overhead volume variance is a measure of

The two variances for fixed overhead are

The two variances for variable overhead are

The standard fixed overhead rate is often calculated as

The ________________________ measures the change in the actual variable overhead cost that occurs because of efficient (or inefficient) use of direct labor

A static budget is

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

Often, the flexible budget formulas are based on ________________ instead of units.

Inefficient usage of labor implies a(n)

Fixed overhead was budgeted at $200,000, and 25,000 direct labor hours were budgeted. If the fixed overhead volume variance was $8,000 favorable and the fixed overhead spending variance was $6,000 unfavorable, fixed overhead applied must be

A _____________________ compares actual costs with budgeted costs.

The _____________________ is the difference between actual fixed overhead and applied fixed overhead.

Flexible budgets are powerful control tools because

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