Question 1

-Refer to Figure 11-4. Calculate the variable overhead spending variance.

Accepted Answer

A)  $69,250 U 
B)  $69,250 F 
C)  $24,000 U 
D)  $40,000 F 
E)  None of these. 
A)  $69,250 U 
B)  $69,250 F 
C)  $24,000 U 
D)  $40,000 F 
E)  None of these.

Question 2

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

Accepted Answer

A)  $142,000 
B)  $159,000 
C)  $171,000 
D)  $165,000 
E)  None of these. 
A)  $142,000 
B)  $159,000 
C)  $171,000 
D)  $165,000 
E)  None of these.

Question 3

Which of the following is not one of the steps in building an activity-based budget?

Accepted Answer

A)  identifying activities 
B)  classifying activities as value-added or nonvalue-added 
C)  estimating the demand for each activity's output 
D)  estimating the cost of producing the output demanded by each activity 
E)  None of these. 
A)  identifying activities 
B)  classifying activities as value-added or nonvalue-added 
C)  estimating the demand for each activity's output 
D)  estimating the cost of producing the output demanded by each activity 
E)  None of these.

Question 4

In an activity framework controlling costs translates into

Accepted Answer

A)  managing activities. 
B)  reducing direct labor hours. 
C)  selling more goods. 
D)  careful identification of resource drivers. 
E)  All of these. 
A)  managing activities. 
B)  reducing direct labor hours. 
C)  selling more goods. 
D)  careful identification of resource drivers. 
E)  All of these.

Question 5

Static budgets are the best benchmarks for preparing a performance report.

Accepted Answer

A) True 
 B)False

Question 6

-Refer to Figure 11-4. Calculate the variable overhead efficiency variance.

Accepted Answer

A)  $36,850 U 
B)  $80,000 U 
C)  $36,850 F 
D)  $4,000 U 
E)  None of these. 
A)  $36,850 U 
B)  $80,000 U 
C)  $36,850 F 
D)  $4,000 U 
E)  None of these.

Question 7

-Refer to Figure 11-4. The predetermined variable overhead rate is

Accepted Answer

A)  $3.00 per direct labor hour. 
B)  $2.50 per direct labor hour. 
C)  $5.50 per direct labor hour. 
D)  $3.35 per direct labor hour. 
E)  None of these are correct. 
A)  $3.00 per direct labor hour. 
B)  $2.50 per direct labor hour. 
C)  $5.50 per direct labor hour. 
D)  $3.35 per direct labor hour. 
E)  None of these are correct.

Question 8

Activity flexible budgeting

Accepted Answer

A)  improves performance reporting. 
B)  allows the prediction of activity costs as activity output changes. 
C)  enhances the ability to manage activities. 
D)  improves the ability to plan and monitor activity improvements. 
E)  does all of these. 
A)  improves performance reporting. 
B)  allows the prediction of activity costs as activity output changes. 
C)  enhances the ability to manage activities. 
D)  improves the ability to plan and monitor activity improvements. 
E)  does all of these.

Question 9

Inefficient usage of labor implies a(n)

Accepted Answer

A)  both unfavorable variable overhead efficiency variance and unfavorable variable overhead spending variance. 
B)  favorable variable overhead efficiency variance. 
C)  unfavorable variable overhead spending variance. 
D)  favorable variable overhead spending variance. 
E)  unfavorable variable overhead efficiency variance. 
A)  both unfavorable variable overhead efficiency variance and unfavorable variable overhead spending variance. 
B)  favorable variable overhead efficiency variance. 
C)  unfavorable variable overhead spending variance. 
D)  favorable variable overhead spending variance. 
E)  unfavorable variable overhead efficiency variance.

Question 10

The following standard overhead costs were developed for one of the products of Mildey Company:
   The following information is available regarding the company's operations for the period:
   Budgeted fixed overhead for the period is $1,350,000, and the standard fixed overhead rate is based on expected capacity of 90,000 direct labor hours.
Required:

Accepted Answer

The answer of The following standard overhead costs were developed...

Question 11

Larry Miller, controller for Kipling Company, has been instructed to develop a flexible budget for overhead costs. The company produces two types of frozen desserts: Icey and Tasty. The two desserts use common raw materials in different proportions. The company expects to produce 200,000 gallons of each product during the coming year. Icey requires 0.25 direct labor hour per gallon and Tasty requires 0.30. Larry has developed the following fixed and variable costs for each of the four overhead items:
  
-Refer to Figure 11-7. Assume that Kipling actually produced 240,000 gallons of Icey and 200,000 of Tasty. The actual overhead costs incurred were:
   Required:

Accepted Answer

The answer of Larry Miller, controller for Kipling Company, has...

Question 12

The ____________________ is the difference between budgeted fixed overhead and applied fixed overhead.

Accepted Answer

fixed over

Question 13

Often, the flexible budget formulas are based on ________________ instead of units.

Accepted Answer

The answer of Often, the flexible budget formulas are based...

Question 14

-Refer to Figure 11-4. Calculate the fixed overhead spending variance.

Accepted Answer

A)  $32,000 F 
B)  $0 
C)  $4,000 U 
D)  $12,000 U 
E)  $4,000 F 
A)  $32,000 F 
B)  $0 
C)  $4,000 U 
D)  $12,000 U 
E)  $4,000 F

Question 15

Montgomery normally produces 15,000 units (each unit requires 0.30 direct labor hours); however this year 19,000 units were produced with the following actual costs:
  
-Refer to Figure 11-3. Using an after-the-fact flexible budget, calculate the total budget variance.

Accepted Answer

A)  $12,510 U 
B)  $3,600 U 
C)  $5,000 F 
D)  $12,510 F 
E)  None of these. 
A)  $12,510 U 
B)  $3,600 U 
C)  $5,000 F 
D)  $12,510 F 
E)  None of these.

Question 16

Building an activity-based budget requires

Accepted Answer

A)  the activities within an organization to be identified. 
B)  the demand for each activity's output to be estimated. 
C)  the cost of resources required to produce this activity output to be assessed. 
D)  All of these. 
E)  None of these. 
A)  the activities within an organization to be identified. 
B)  the demand for each activity's output to be estimated. 
C)  the cost of resources required to produce this activity output to be assessed. 
D)  All of these. 
E)  None of these.

Question 17

What is the fixed overhead volume variance? Suppose that the fixed overhead volume variance is unfavorable; what does that mean?

Accepted Answer

The fixed overhead volume variance is th

Question 18

The fixed overhead volume variance is a measure of

Accepted Answer

A)  the cost of overspending on fixed overhead items. 
B)  the effect of the actual output differing from the output used to calculate the predetermined fixed overhead rate. 
C)  the cost of unused activity capacity acquired. 
D)  both the cost of overspending on fixed overhead items and the effect of the actual output differing from the output used to calculate predetermined fixed overhead rate. 
E)  both the effect of the actual output differing from the output used to calculate the predetermined fixed overhead rate and the cost of unused activity capacity. 
A)  the cost of overspending on fixed overhead items. 
B)  the effect of the actual output differing from the output used to calculate the predetermined fixed overhead rate. 
C)  the cost of unused activity capacity acquired. 
D)  both the cost of overspending on fixed overhead items and the effect of the actual output differing from the output used to calculate predetermined fixed overhead rate. 
E)  both the effect of the actual output differing from the output used to calculate the predetermined fixed overhead rate and the cost of unused activity capacity.

Question 19

In an activity flexible budget, the fixed cost component typically corresponds to

Accepted Answer

A)  resources that vary with direct labor hours. 
B)  resources that vary as the activity output changes. 
C)  resources acquired in advance of usage. 
D)  resources acquired as needed. 
E)  None of these. 
A)  resources that vary with direct labor hours. 
B)  resources that vary as the activity output changes. 
C)  resources acquired in advance of usage. 
D)  resources acquired as needed. 
E)  None of these.

Question 20

In a standard cost system, variable overhead is applied

Accepted Answer

A)  using actual direct labor hours. 
B)  using budgeted indirect labor hours. 
C)  using direct labor hours at practical capacity. 
D)  using standard direct labor hours. 
E)  All of these. 
A)  using actual direct labor hours. 
B)  using budgeted indirect labor hours. 
C)  using direct labor hours at practical capacity. 
D)  using standard direct labor hours. 
E)  All of these.

-Refer to Figure 11-4. Calculate the variable overhead spending variance.

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

Which of the following is not one of the steps in building an activity-based budget?

In an activity framework controlling costs translates into

Static budgets are the best benchmarks for preparing a performance report.

-Refer to Figure 11-4. Calculate the variable overhead efficiency variance.

-Refer to Figure 11-4. The predetermined variable overhead rate is

Activity flexible budgeting

Inefficient usage of labor implies a(n)

The ____________________ is the difference between budgeted fixed overhead and applied fixed overhead.

Often, the flexible budget formulas are based on ________________ instead of units.

-Refer to Figure 11-4. Calculate the fixed overhead spending variance.

Montgomery normally produces 15,000 units (each unit requires 0.30 direct labor hours); however this year 19,000 units were produced with the following actual costs: -Refer to Figure 11-3. Using an after-the-fact flexible budget, calculate the total budget variance.

Building an activity-based budget requires

What is the fixed overhead volume variance? Suppose that the fixed overhead volume variance is unfavorable; what does that mean?

The fixed overhead volume variance is a measure of

In an activity flexible budget, the fixed cost component typically corresponds to

In a standard cost system, variable overhead is applied

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

Exam 11: Flexible Budgets and Overhead Analysis

-Refer to Figure 11-4. Calculate the variable overhead spending variance.

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

Which of the following is not one of the steps in building an activity-based budget?

In an activity framework controlling costs translates into

Static budgets are the best benchmarks for preparing a performance report.

-Refer to Figure 11-4. Calculate the variable overhead efficiency variance.

-Refer to Figure 11-4. The predetermined variable overhead rate is

Activity flexible budgeting

Inefficient usage of labor implies a(n)

The ____________________ is the difference between budgeted fixed overhead and applied fixed overhead.

Often, the flexible budget formulas are based on ________________ instead of units.

-Refer to Figure 11-4. Calculate the fixed overhead spending variance.

Montgomery normally produces 15,000 units (each unit requires 0.30 direct labor hours); however this year 19,000 units were produced with the following actual costs: -Refer to Figure 11-3. Using an after-the-fact flexible budget, calculate the total budget variance.

Building an activity-based budget requires

What is the fixed overhead volume variance? Suppose that the fixed overhead volume variance is unfavorable; what does that mean?

The fixed overhead volume variance is a measure of

In an activity flexible budget, the fixed cost component typically corresponds to

In a standard cost system, variable overhead is applied

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