Exam 8: Flexible Budgets, Overhead Cost Variances, and Management Control

The accounting for 3-variance analysis is simpler than the 4-variance analysis, but some information is lost because the variable and fixed overhead spending variances are combined into a single total overhead spending variance.

List the four steps to develop budgeted variable overhead cost-allocation.

All of the following are possible causes of actual machine hours exceeding budgeted machine hours except:

The production-volume variance is a component of the sales-volume variance.

When fixed overhead spending variance is unfavorable, it can be safely assumed that ________.

Lancelot Corporation manufactures tennis gear and uses budgeted machine-hours to allocate variable manufacturing overhead. The following information relates to the company's manufacturing overhead data: What is the amount of the budgeted variable manufacturing overhead cost per unit?

The variable overhead efficiency variance measures the difference between the ________, multiplied by the budgeted variable overhead cost per unit of the cost-allocation base.

Lump-sum fixed costs of acquiring capacity decrease automatically if the capacity needed turns out to be less than the capacity acquired.

Raposa, Inc., produces a special line of plastic toy racing cars. Raposa, Inc., produces the cars in batches. To manufacture a batch of the cars, Raposa, Inc., must set up the machines and molds. Setup costs are batch-level costs because they are associated with batches rather than individual units of products. A separate Setup Department is responsible for setting up machines and molds for different styles of car. Setup overhead costs consist of some costs that are variable and some costs that are fixed with respect to the number of setup-hours. The following information pertains to June 2015: Calculate the spending variance for variable overhead setup costs. (Round all intermediary calculations two decimal places and your final answer to the nearest whole number.)

The total production-volume variance should be ________.

The variable overhead efficiency variance is computed ________ and interpreted ________ the direct-cost efficiency variance.

Which of the following best defines standard costing?

Davidson Corporation manufactured 53,400 units during September. The following fixed overhead data relates to September: What is the fixed overhead spending variance?

Radon Corporation manufactured 37,500 units during March. The following fixed overhead data pertain to March: What is the fixed overhead production-volume variance?

At the start of the budget period, management will have made most decisions regarding the level of fixed overhead costs to be incurred.

Hockey Accessories Corporation manufactured 21,400 duffle bags during March. The following fixed overhead data pertain to March: What is the amount of fixed overhead spending variance?

Which of the following is the correct mathematical expression to calculate the fixed overhead production-volume variance?

An unfavorable price variance for materials-handling labor indicates that the actual cost per materials-handling labor-hour is less than the budgeted cost per materials-handling labor-hour.

The major challenge when planning fixed overhead is ________.

Service-sector companies have no use of variance analysis as only few costs can be traced to their outputs in a cost effective way.