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

Castleton Corporation manufactured 36,500 units during March. The following fixed overhead data relates to March: What is the fixed overhead spending variance?

Zitrik Corporation manufactured 90,000 buckets during February. The variable overhead cost-allocation base is $5.10 per machine-hour. The following variable overhead data pertain to February: What is the actual variable overhead cost?

J&J Materials and Construction Corporation produces fertilizer and distributes the product by using dump trucks. The company uses budgeted fleet hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data: What is the flexible-budget variance for variable manufacturing overhead?

The variable overhead flexible-budget variance can be further explained by calculating the:

Which of the following journal entries is used to record actual variable overhead costs incurred?

Compared to variable overhead costs planning, fixed overhead cost planning has an additional strategic issue beyond undertaking only essential activities and efficient operations. That additional requirement is best described as:

Managers can always view a favorable variable overhead spending variance as desirable.

When machine-hours are used as an overhead cost-allocation base and annual leasing costs for equipment unexpectedly increase, the most likely result would be to report a(n) ________.

Fixed overhead costs include ________.

Fixed costs automatically increase or decrease with the level of activity within a relevant range of activity.

In flexible budgets the costs that are not "flexed" because they remain the same within a relevant range of activity (such as sales or output) are called ________.

Home Plate Corporation manufactures baseball uniforms and uses budgeted machine-hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data: What is the budgeted variable overhead cost rate per output unit?

Zitrik Corporation manufactured 110,000 buckets during February. The variable overhead cost-allocation base is $5.45 per machine-hour. The following variable overhead data pertain to February: What is the variable overhead spending variance?

Russo Corporation manufactured 21,000 air conditioners during November. The overhead cost-allocation base is $34.50 per machine-hour. The following variable overhead data pertain to November: What is the total variable overhead variance?

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 flexible-budget amount for variable manufacturing overhead?

What are the two components of sales-volume variance? Explain why sales-volume variance could be helpful to managers.