Question 1

The total actual variable factory overhead cost incurred during the year was:

Accepted Answer

A) $13,000. 
B) $14,000. 
C) $14,100. 
D) $14,400. 
E) $15,000. 
A) $13,000. 
B) $14,000. 
C) $14,100. 
D) $14,400. 
E) $15,000.

Question 2

The Wentworth Company manufactures modular furniture for the home and uses a monthly variance system to control costs of the manufacturing departments. Edward Collins is the supervisor of the Assembly Department and is reviewing the monthly variance analysis for November, which showed a significant cost overrun (i.e., negative cost variance). Collins has gathered the following information to assist him in deciding whether or not to investigate the unfavorable cost variance for the Assembly Department:   Required: Recommend whether Wentworth Company should investigate the observed unfavorable cost variance. Support your answer by:
1. Preparing a payoff table for use in making the decision.
2. Computing the expected value of the cost of each of the two actions that management can take: investigate the variance, or do not investigate the variance. (Let p = the probability that the process is out of control, that is, the probability of a nonrandom variance, and (1 - p) = the probability that the process is in control, that is, that the observed variance is due to random causes.)

Accepted Answer

Answer may vary
Feedback:
1. Payoff tabl

Question 3

The most appropriate end-of-period disposition of underapplied or overapplied factory overhead

Accepted Answer

A) Is to close the amount to cost of goods sold. 
B) Is to close the amount to finished goods inventory only. 
C) Is to apportion the amount to finished goods inventory and cost of goods sold. 
D) Depends on the significance of the amount in question. 
E) Is to charge the amount as a period cost, e.g., "miscellaneous expense." 
A) Is to close the amount to cost of goods sold. 
B) Is to close the amount to finished goods inventory only. 
C) Is to apportion the amount to finished goods inventory and cost of goods sold. 
D) Depends on the significance of the amount in question. 
E) Is to charge the amount as a period cost, e.g., "miscellaneous expense."

Question 4

ABN Corp. has the following information about its standards and production activity in May:   Required: Calculate and show calculations for each of the following variances:
1. Variable overhead flexible-budget (FB) variance.
2. Fixed overhead spending variance.
3. Fixed overhead production volume variance.
4. Provide and interpretation of each of the above variances.

Accepted Answer

Answer may

Question 5

The budgeted total factory overhead for the Machining Department is:

Accepted Answer

A) $617,100 
B) $875,000. 
C) $883,500. 
D) $892,500. 
E) $1,050,000. 
A) $617,100 
B) $875,000. 
C) $883,500. 
D) $892,500. 
E) $1,050,000.

Question 6

Some accountants would argue that any variances from standard costs, when such standards are current, should be written off to cost of goods sold. The principal rationale for this treatment is:

Accepted Answer

A) This is the treatment required currently under generally accepted accounting principles. 
B) To allocate such variances implies that asset values on the balance sheet (i.e., inventories0 contain the cost of inefficiencies. 
C) The negligible effect this treatment has on total cost of goods sold for the period. 
D) Consistency with current income tax provisions. 
A) This is the treatment required currently under generally accepted accounting principles. 
B) To allocate such variances implies that asset values on the balance sheet (i.e., inventories0 contain the cost of inefficiencies. 
C) The negligible effect this treatment has on total cost of goods sold for the period. 
D) Consistency with current income tax provisions.

Question 7

As long as the organization is making good progress toward achieving an ideal standard, its management may not need to:

Accepted Answer

A) Modify its standards. 
B) Curtail spending on variable costs. 
C) Curtail spending on fixed costs. 
D) Take any corrective action if the variance for the period is large. 
E) Take any corrective action, even if the variance for the period is rather substantial in amount. 
A) Modify its standards. 
B) Curtail spending on variable costs. 
C) Curtail spending on fixed costs. 
D) Take any corrective action if the variance for the period is large. 
E) Take any corrective action, even if the variance for the period is rather substantial in amount.

The total actual variable factory overhead cost incurred during the year was:

The most appropriate end-of-period disposition of underapplied or overapplied factory overhead

The budgeted total factory overhead for the Machining Department is:

Some accountants would argue that any variances from standard costs, when such standards are current, should be written off to cost of goods sold. The principal rationale for this treatment is:

As long as the organization is making good progress toward achieving an ideal standard, its management may not need to:

Cost Management and Strategy

Implementing Strategy: the Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit Cvp Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

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Exam 15: Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

The total actual variable factory overhead cost incurred during the year was:

The most appropriate end-of-period disposition of underapplied or overapplied factory overhead

The budgeted total factory overhead for the Machining Department is:

Some accountants would argue that any variances from standard costs, when such standards are current, should be written off to cost of goods sold. The principal rationale for this treatment is:

As long as the organization is making good progress toward achieving an ideal standard, its management may not need to:

Cost Management and Strategy

Implementing Strategy: the Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit Cvp Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters