Exam 11: Flexible Budgets and Overhead Analysis

MATCHING Match the following terms with the items below: a. (Actual hours -Standard hours)SVOR b. Prediction of what activity costs will be as activity output changes c. A measure of capacity utilization d. Actual variable overhead - (SVOR * Actual hours) e. Difference between the actual amount and the flexible budget amount f. A budget that specifies costs for a range of activity g. A budget for a particular level of activity h. Estimating activity output and then assessing the cost of resources to produce this output i. A report that compares actual with planned costs j. Difference between actual and budgeted fixed overhead -Static budget

Activity-based budgeting builds a budget for each activity based on the resources needed to provide the required activity output levels.

_________________ are capacity costs acquired in advance of usage.

The formula for the fixed overhead volume variance is

The variable overhead efficiency variance claims to measure

If actual fixed overhead was $54,000 and there was a $1,300 unfavorable spending variance and a $1,000 unfavorable volume variance, budgeted fixed overhead must have been

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?

Define static budget and flexible budget. What is each type used for?

Activity-based budgeting supports continuous improvement and process management.

Which budget is used to assess managerial efficiency?

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

MATCHING Match the following terms with the items below: a. (Actual hours -Standard hours)SVOR b. Prediction of what activity costs will be as activity output changes c. A measure of capacity utilization d. Actual variable overhead - (SVOR * Actual hours) e. Difference between the actual amount and the flexible budget amount f. A budget that specifies costs for a range of activity g. A budget for a particular level of activity h. Estimating activity output and then assessing the cost of resources to produce this output i. A report that compares actual with planned costs j. Difference between actual and budgeted fixed overhead -Variable overhead spending variance

A before-the-fact flexible budget