Question 1

A _______________ is a budget created in advance that is based on a particular level of activity.

Accepted Answer

The answer of A _______________ is a budget created in...

Question 2

-Refer to Figure 11-2. What is the flexible budget variance for July?

Accepted Answer

A)  $12,000 U 
B)  $12,000 F 
C)  $29,000 U 
D)  $29,000 F 
E)  None of these. 
A)  $12,000 U 
B)  $12,000 F 
C)  $29,000 U 
D)  $29,000 F 
E)  None of these.

Question 3

The variable overhead spending variance is conceptually identical to the price variances of materials and labor.

Accepted Answer

A) True 
 B)False

Question 4

Fixed overhead costs are resources acquired as used and needed.

Accepted Answer

A) True 
 B)False

Question 5

_______________________ is the difference between the actual variable overhead and applied variable overhead.

Accepted Answer

Total vari

Question 6

The volume variance is often interpreted as a measure of capacity utilization.

Accepted Answer

A) True 
 B)False

Question 7

Fixed overhead was budgeted at $84,000 and 10,000 direct labor hours were budgeted. If the fixed overhead volume variance was $3,200 unfavorable and the fixed overhead spending variance was $1,200 favorable, fixed overhead applied must be

Accepted Answer

A)  $85,200. 
B)  $80,800. 
C)  $82,800. 
D)  $82,000. 
E)  $87,200. 
A)  $85,200. 
B)  $80,800. 
C)  $82,800. 
D)  $82,000. 
E)  $87,200.

Question 8

A static budget is best used to

Accepted Answer

A)  measure whether or not a manager accomplishes his or her goals. 
B)  compare expected costs at the actual level of activity with the actual costs. 
C)  assess how well costs were controlled during the year. 
D)  determine managerial efficiency. 
E)  None of these. 
A)  measure whether or not a manager accomplishes his or her goals. 
B)  compare expected costs at the actual level of activity with the actual costs. 
C)  assess how well costs were controlled during the year. 
D)  determine managerial efficiency. 
E)  None of these.

Question 9

A static budget compares actual cost with budgeted costs.

Accepted Answer

A) True 
 B)False

Question 10

Favor Company budgeted the following amounts:
     Required: Prepare a flexible budget for 1,500 units, 1,800 units and 2,100 units.

Accepted Answer

The answer of Favor Company budgeted the following amounts:
 ...

Question 11

The ______________________ is the difference between the actual fixed overhead and the budgeted fixed overhead.

Accepted Answer

fixed over

Question 12

Harry Company's standard variable overhead rate is $6 per direct labor hour, and each unit requires 2 standard direct labor hours. During March, Harry recorded 6,000 actual direct labor hours, $37,000 actual variable overhead costs, and 2,900 units of product manufactured. What is the total variable overhead variance for March for Harry?

Accepted Answer

A)  $1,200 U 
B)  $600 U 
C)  $1,000 U 
D)  $2,200 U 
A)  $1,200 U 
B)  $600 U 
C)  $1,000 U 
D)  $2,200 U

Question 13

An after-the-fact flexible budget allows managers to generate financial results from a number of potential scenarios.

Accepted Answer

A) True 
 B)False

Question 14

For activity flexible budgeting, a cost formula is developed for each

Accepted Answer

A)  overhead item as a function of direct labor hours. 
B)  activity as a function of activity drivers. 
C)  activity as a function of resource drivers. 
D)  overhead item as a function of resource drivers. 
E)  each activity as a function of direct labor hours. 
A)  overhead item as a function of direct labor hours. 
B)  activity as a function of activity drivers. 
C)  activity as a function of resource drivers. 
D)  overhead item as a function of resource drivers. 
E)  each activity as a function of direct labor hours.

Question 15

The formula for calculating the variable overhead efficiency variance is

Accepted Answer

A)  (AVOR * AH) - (SVOR * AH). 
B)  (AVOR - SVOR)SH. 
C)  (AH - SH)SVOR. 
D)  (AH - SH)AVOR. 
E)  None of these. 
A)  (AVOR * AH) - (SVOR * AH). 
B)  (AVOR - SVOR)SH. 
C)  (AH - SH)SVOR. 
D)  (AH - SH)AVOR. 
E)  None of these.

Question 16

A budget prepared for a particular level of activity is a(n)

Accepted Answer

A)  operational budget. 
B)  ABB budget. 
C)  static budget. 
D)  flexible budget. 
E)  variable budget. 
A)  operational budget. 
B)  ABB budget. 
C)  static budget. 
D)  flexible budget. 
E)  variable budget.

Question 17

Gallant Company uses standard costing. Overhead is applied to products on the basis of standard direct labor hours for actual production. Data for Gallant follows:

Accepted Answer

The answer of Gallant Company uses standard costing. Overhead is...

Question 18

-Refer to Figure 11-1. What is the flexible budget amount for the first quarter?

Accepted Answer

A)  $288,000 
B)  $311,000 
C)  $312,000 
D)  $261,000 
E)  Cannot be determined. 
A)  $288,000 
B)  $311,000 
C)  $312,000 
D)  $261,000 
E)  Cannot be determined.

Question 19

-Refer to Figure 11-1. Comparing the static budget to the actual outcomes, we can say the following:

Accepted Answer

A)  the manager had more direct labor hours. 
B)  the variances are all unfavorable. 
C)  the comparison is not useful for assessing managerial efficiency. 
D)  a flexible budget should be used for assessing efficiency. 
E)  All of these. 
A)  the manager had more direct labor hours. 
B)  the variances are all unfavorable. 
C)  the comparison is not useful for assessing managerial efficiency. 
D)  a flexible budget should be used for assessing efficiency. 
E)  All of these.

Question 20

If variable manufacturing overhead is applied based on direct labor hours and there is an unfavorable direct labor efficiency variance

Accepted Answer

A)  the direct materials usage variance will be unfavorable. 
B)  the direct labor rate variance will be favorable. 
C)  the variable manufacturing overhead efficiency variance will be unfavorable. 
D)  the variable manufacturing overhead spending variance will be unfavorable. 
A)  the direct materials usage variance will be unfavorable. 
B)  the direct labor rate variance will be favorable. 
C)  the variable manufacturing overhead efficiency variance will be unfavorable. 
D)  the variable manufacturing overhead spending variance will be unfavorable.

A _______________ is a budget created in advance that is based on a particular level of activity.

-Refer to Figure 11-2. What is the flexible budget variance for July?

The variable overhead spending variance is conceptually identical to the price variances of materials and labor.

Fixed overhead costs are resources acquired as used and needed.

_______________________ is the difference between the actual variable overhead and applied variable overhead.

The volume variance is often interpreted as a measure of capacity utilization.

Fixed overhead was budgeted at $84,000 and 10,000 direct labor hours were budgeted. If the fixed overhead volume variance was $3,200 unfavorable and the fixed overhead spending variance was $1,200 favorable, fixed overhead applied must be

A static budget is best used to

A static budget compares actual cost with budgeted costs.

Favor Company budgeted the following amounts: Required: Prepare a flexible budget for 1,500 units, 1,800 units and 2,100 units.

The ______________________ is the difference between the actual fixed overhead and the budgeted fixed overhead.

An after-the-fact flexible budget allows managers to generate financial results from a number of potential scenarios.

For activity flexible budgeting, a cost formula is developed for each

The formula for calculating the variable overhead efficiency variance is

A budget prepared for a particular level of activity is a(n)

Gallant Company uses standard costing. Overhead is applied to products on the basis of standard direct labor hours for actual production. Data for Gallant follows:

-Refer to Figure 11-1. What is the flexible budget amount for the first quarter?

-Refer to Figure 11-1. Comparing the static budget to the actual outcomes, we can say the following:

If variable manufacturing overhead is applied based on direct labor hours and there is an unfavorable direct labor efficiency variance

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

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Exam 11: Flexible Budgets and Overhead Analysis

A _______________ is a budget created in advance that is based on a particular level of activity.

-Refer to Figure 11-2. What is the flexible budget variance for July?

The variable overhead spending variance is conceptually identical to the price variances of materials and labor.

Fixed overhead costs are resources acquired as used and needed.

_______________________ is the difference between the actual variable overhead and applied variable overhead.

The volume variance is often interpreted as a measure of capacity utilization.

Fixed overhead was budgeted at $84,000 and 10,000 direct labor hours were budgeted. If the fixed overhead volume variance was $3,200 unfavorable and the fixed overhead spending variance was $1,200 favorable, fixed overhead applied must be

A static budget is best used to

A static budget compares actual cost with budgeted costs.

Favor Company budgeted the following amounts: Required: Prepare a flexible budget for 1,500 units, 1,800 units and 2,100 units.

The ______________________ is the difference between the actual fixed overhead and the budgeted fixed overhead.

An after-the-fact flexible budget allows managers to generate financial results from a number of potential scenarios.

For activity flexible budgeting, a cost formula is developed for each

The formula for calculating the variable overhead efficiency variance is

A budget prepared for a particular level of activity is a(n)

Gallant Company uses standard costing. Overhead is applied to products on the basis of standard direct labor hours for actual production. Data for Gallant follows:

-Refer to Figure 11-1. What is the flexible budget amount for the first quarter?

-Refer to Figure 11-1. Comparing the static budget to the actual outcomes, we can say the following:

If variable manufacturing overhead is applied based on direct labor hours and there is an unfavorable direct labor efficiency variance

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