Question 1

An after-the-fact flexible budget

Accepted Answer

A)  is a budget for the actual level of activity. 
B)  is used for performance reports. 
C)  calculates what costs should have been for the actual level of activity. 
D)  is used to compare expected costs with actual costs. 
E)  All of these. 
A)  is a budget for the actual level of activity. 
B)  is used for performance reports. 
C)  calculates what costs should have been for the actual level of activity. 
D)  is used to compare expected costs with actual costs. 
E)  All of these.

Question 2

At the beginning of the year, Folsom Company had the following standard cost sheet for one of its food products:
   Folsom computes its overhead rates using practical capacity, which is 72,000 units. The actual results for the year are:

Accepted Answer

The answer of At the beginning of the year, Folsom...

Question 3

_______________________ is the prediction of what activity costs will be as related output changes.

Accepted Answer

Activity f

Question 4

During the year, Hawkings produced 10,000 units, used 20,000 direct labor hours, and incurred variable overhead of $90,000. Budgeted variable overhead for the year was $88,000. The hours allowed per unit are 2.1. The standard variable overhead rate is $4.00 per direct labor hour. The variable overhead spending variance is

Accepted Answer

A)  $2,000 F. 
B)  $6,000 U. 
C)  $10,000 U. 
D)  $2,000 U. 
E)  None of these. 
A)  $2,000 F. 
B)  $6,000 U. 
C)  $10,000 U. 
D)  $2,000 U. 
E)  None of these.

Question 5

The first step of building an activity-based budget is to identify the activities within an organization.

Accepted Answer

A) True 
 B)False

Question 6

-Refer to Figure 11-2. Comparing the static budget to the actual costs, we can conclude that

Accepted Answer

A)  the manager spent more than should have been spent. 
B)  immediate action is needed to reduce costs. 
C)  the plant manager was clearly not efficient. 
D)  the plant manager should be dismissed. 
E)  None of these. 
A)  the manager spent more than should have been spent. 
B)  immediate action is needed to reduce costs. 
C)  the plant manager was clearly not efficient. 
D)  the plant manager should be dismissed. 
E)  None of these.

Question 7

Assume that the expectations on the static budget were met. We can conclude that

Accepted Answer

A)  the static budget was ill conceived. 
B)  the effectiveness of the manager is not in question. 
C)  the manager is very efficient. 
D)  there is no need for a flexible budget. 
E)  None of these. 
A)  the static budget was ill conceived. 
B)  the effectiveness of the manager is not in question. 
C)  the manager is very efficient. 
D)  there is no need for a flexible budget. 
E)  None of these.

Question 8

An unfavorable variable overhead spending variance may be caused by

Accepted Answer

A)  the use of excessive quantities of variable overhead items. 
B)  the payment of lower prices for variable overhead items used. 
C)  the use of excessive quantities of the variable overhead allocation base. 
D)  both the use of excessive quantities of variable overhead items and the payment of lower prices for variable overhead items used. 
A)  the use of excessive quantities of variable overhead items. 
B)  the payment of lower prices for variable overhead items used. 
C)  the use of excessive quantities of the variable overhead allocation base. 
D)  both the use of excessive quantities of variable overhead items and the payment of lower prices for variable overhead items used.

Question 9

Discuss the following statement: "As long as the total variable overhead variance is small, the managers can be assured that actual activity is proceeding as planned. No further action is necessary."

Accepted Answer

While it may be reassuring for managers

Question 10

Match the following terms with the items below:
-Fixed overhead volume variance

Accepted Answer

A) (Actual hours - Standard hours)SVOR 
B) Prediction of what activity costs will be as activity output changes 
C) A measure of capacity utilization 
D) Actual variable overhead - (SVOR * Actual hours) 
E) Difference between the actual amount and the flexible budget amount
F)A budget that specifies costs for a range of activity
G)A budget for a particular level of activity
H)Estimating activity output and then assessing the cost of resources to produce this output
I)A report that compares actual with planned costs
J)Difference between actual and budgeted fixed overhead 
A) (Actual hours - Standard hours)SVOR 
B) Prediction of what activity costs will be as activity output changes 
C) A measure of capacity utilization 
D) Actual variable overhead - (SVOR * Actual hours) 
E) Difference between the actual amount and the flexible budget amount
F)A budget that specifies costs for a range of activity
G)A budget for a particular level of activity
H)Estimating activity output and then assessing the cost of resources to produce this output
I)A report that compares actual with planned costs
J)Difference between actual and budgeted fixed overhead

Question 11

The total fixed overhead variance is

Accepted Answer

A)  actual fixed overhead - applied fixed overhead. 
B)  the sum of the spending and volume variances. 
C)  the sum of the spending and efficiency variances. 
D)  both actual fixed overhead - applied fixed overhead and the sum of the spending and efficiency variances. 
E)  both actual fixed overhead - applied fixed overhead and the sum of the spending and volume variances. 
A)  actual fixed overhead - applied fixed overhead. 
B)  the sum of the spending and volume variances. 
C)  the sum of the spending and efficiency variances. 
D)  both actual fixed overhead - applied fixed overhead and the sum of the spending and efficiency variances. 
E)  both actual fixed overhead - applied fixed overhead and the sum of the spending and volume variances.

Question 12

The following costs were developed for one of the products of Larry Corporation:
   The following information is available regarding the company's operations for the period:
   Budgeted fixed overhead for the period is $960,000, and the standard fixed overhead rate is based on expected capacity of 80,000 direct labor hours.
Required:

Accepted Answer

The answer of The following costs were developed for one...

Question 13

Match the following terms with the items below:
-Activity flexible budget

Accepted Answer

A) (Actual hours - Standard hours)SVOR 
B) Prediction of what activity costs will be as activity output changes 
C) A measure of capacity utilization 
D) Actual variable overhead -(SVOR * Actual hours) 
E) Difference between the actual amount and the flexible budget amount
F)A budget that specifies costs for a range of activity
G)A budget for a particular level of activity
H)Estimating activity output and then assessing the cost of resources to produce this output
I)A report that compares actual with planned costs
J)Difference between actual and budgeted fixed overhead 
A) (Actual hours - Standard hours)SVOR 
B) Prediction of what activity costs will be as activity output changes 
C) A measure of capacity utilization 
D) Actual variable overhead -(SVOR * Actual hours) 
E) Difference between the actual amount and the flexible budget amount
F)A budget that specifies costs for a range of activity
G)A budget for a particular level of activity
H)Estimating activity output and then assessing the cost of resources to produce this output
I)A report that compares actual with planned costs
J)Difference between actual and budgeted fixed overhead

Question 14

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.
Required:

Accepted Answer

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

Question 15

Folson Company is planning to produce 4,250,000 speakers for the coming year. Actual production was 4,000,000 speakers. Each speaker requires 0.80 direct labor hours per unit. Predetermined overhead rates are calculated using expected production, measured in direct labor hours. The budgeted variable overhead for the coming year is $680,000. The actual variable overhead incurred was $714,000. The applied variable overhead for the year is

Accepted Answer

A)  $800,000. 
B)  $714,000. 
C)  $640,000. 
D)  $680,000. 
E)  None of these. 
A)  $800,000. 
B)  $714,000. 
C)  $640,000. 
D)  $680,000. 
E)  None of these.

Question 16

Allen Company produced 44,000 units last year. The information on the actual costs and budgeted costs at actual production of three activities is provided below.
   Required:
Prepare an activity-based performance report for the three activities for the past year.

Accepted Answer

@#IMG-DLM& Variances equal actual amounts less bud

Question 17

The _________________________ focuses on the estimation of the costs of activities rather than the costs of departments and plants.

Accepted Answer

Activity-b

Question 18

The formula for the variable overhead spending variance can be expressed as follows:

Accepted Answer

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

Question 19

A company had the following information for the year:
   Required:

Accepted Answer

The answer of A company had the following information for...

Question 20

A static budget is

Accepted Answer

A)  considered a good choice for benchmarks in preparing a performance report. 
B)  computes expected costs for a range of activity levels. 
C)  compares actual costs with budgeted costs. 
D)  prepared for a particular level of activity. 
E)  None of these are correct. 
A)  considered a good choice for benchmarks in preparing a performance report. 
B)  computes expected costs for a range of activity levels. 
C)  compares actual costs with budgeted costs. 
D)  prepared for a particular level of activity. 
E)  None of these are correct.

An after-the-fact flexible budget

At the beginning of the year, Folsom Company had the following standard cost sheet for one of its food products: Folsom computes its overhead rates using practical capacity, which is 72,000 units. The actual results for the year are:

_______________________ is the prediction of what activity costs will be as related output changes.

The first step of building an activity-based budget is to identify the activities within an organization.

-Refer to Figure 11-2. Comparing the static budget to the actual costs, we can conclude that

Assume that the expectations on the static budget were met. We can conclude that

An unfavorable variable overhead spending variance may be caused by

Discuss the following statement: "As long as the total variable overhead variance is small, the managers can be assured that actual activity is proceeding as planned. No further action is necessary."

Match the following terms with the items below: -Fixed overhead volume variance

The total fixed overhead variance is

Match the following terms with the items below: -Activity flexible budget

Allen Company produced 44,000 units last year. The information on the actual costs and budgeted costs at actual production of three activities is provided below. Required: Prepare an activity-based performance report for the three activities for the past year.

The _________________________ focuses on the estimation of the costs of activities rather than the costs of departments and plants.

The formula for the variable overhead spending variance can be expressed as follows:

A company had the following information for the year: Required:

A static budget is

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

An after-the-fact flexible budget

At the beginning of the year, Folsom Company had the following standard cost sheet for one of its food products: Folsom computes its overhead rates using practical capacity, which is 72,000 units. The actual results for the year are:

_______________________ is the prediction of what activity costs will be as related output changes.

The first step of building an activity-based budget is to identify the activities within an organization.

-Refer to Figure 11-2. Comparing the static budget to the actual costs, we can conclude that

Assume that the expectations on the static budget were met. We can conclude that

An unfavorable variable overhead spending variance may be caused by

Discuss the following statement: "As long as the total variable overhead variance is small, the managers can be assured that actual activity is proceeding as planned. No further action is necessary."

Match the following terms with the items below: -Fixed overhead volume variance

The total fixed overhead variance is

Match the following terms with the items below: -Activity flexible budget

Allen Company produced 44,000 units last year. The information on the actual costs and budgeted costs at actual production of three activities is provided below. Required: Prepare an activity-based performance report for the three activities for the past year.

The _________________________ focuses on the estimation of the costs of activities rather than the costs of departments and plants.

The formula for the variable overhead spending variance can be expressed as follows:

A company had the following information for the year: Required:

A static budget is

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