Question 1

Budgeted costs change because total variable costs go up as output increases, therefore flexible budgets are sometimes referred to as _______________.

Accepted Answer

The answer of Budgeted costs change because total variable costs...

Question 2

The company expects to perform 25 setups in May.
-Refer to Figure 11-6. Prepare a flexible budget formula for the moving materials activity.

Accepted Answer

A)  $880,000 + $1.71* moves 
B)  $1,450,000 + $3.80 * moves 
C)  $905,000 + $.45 * moves 
D)  $1,080,000 + $1.71 * moves 
E)  $850,000 + $2.00 * moves 
A)  $880,000 + $1.71* moves 
B)  $1,450,000 + $3.80 * moves 
C)  $905,000 + $.45 * moves 
D)  $1,080,000 + $1.71 * moves 
E)  $850,000 + $2.00 * moves

Question 3

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. Calculate the variance for maintenance using an after-the-fact flexible budget.

Accepted Answer

A)  $13,000 U 
B)  $13,100 F 
C)  $11,000 U 
D)  $1,000 F 
E)  None of these. 
A)  $13,000 U 
B)  $13,100 F 
C)  $11,000 U 
D)  $1,000 F 
E)  None of these.

Question 4

______________________ is a prerequisite for assigning responsibility.

Accepted Answer

The answer of ______________________ is a prerequisite for assigning responsibility....

Question 5

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

Accepted Answer

A)  $1,000 U 
B)  $23,000 U 
C)  $23,000 F 
D)  $1,000 F 
E)  None of these. 
A)  $1,000 U 
B)  $23,000 U 
C)  $23,000 F 
D)  $1,000 F 
E)  None of these.

Question 6

Match the following terms with the items below:
-Activity-based budgeting

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 7

The company expects to perform 25 setups in May.
-Refer to Figure 11-6. Suppose that the actual moves made are 80% of the forklifts' capacity. What is the after-the-fact budgeted fuel cost?

Accepted Answer

A)  $448,000 
B)  $299,600 
C)  $492,000 
D)  $353,600 
E)  $350,208 
A)  $448,000 
B)  $299,600 
C)  $492,000 
D)  $353,600 
E)  $350,208

Question 8

The _____________________ measures the aggregate effect of differences between the actual variable overhead rate and the standard variable overhead rate.

Accepted Answer

variable o

Question 9

Responsibility for the fixed overhead volume variance is

Accepted Answer

A)  not assigned because fixed overhead costs do not change with activity changes. 
B)  usually assigned to the production department. 
C)  usually assigned to top management. 
D)  usually assigned to the planning department. 
E)  None of these. 
A)  not assigned because fixed overhead costs do not change with activity changes. 
B)  usually assigned to the production department. 
C)  usually assigned to top management. 
D)  usually assigned to the planning department. 
E)  None of these.

Question 10

In budgeting at the activity level, the cost behavior of each activity is defined with respect to

Accepted Answer

A)  direct labor hours. 
B)  machine hours. 
C)  the activity output measure. 
D)  the activity's resource driver. 
E)  None of these. 
A)  direct labor hours. 
B)  machine hours. 
C)  the activity output measure. 
D)  the activity's resource driver. 
E)  None of these.

Question 11

Which budget should be used to determine managerial effectiveness?

Accepted Answer

A)  before-the-fact flexible budget 
B)  after-the-fact flexible budget 
C)  static budget 
D)  financial budget 
E)  cash budget 
A)  before-the-fact flexible budget 
B)  after-the-fact flexible budget 
C)  static budget 
D)  financial budget 
E)  cash budget

Question 12

Activity flexible budgeting is the prediction of what activity costs will be as related output changes.

Accepted Answer

A) True 
 B)False

Question 13

The company expects to perform 25 setups in May.
-Refer to Figure 11-5. Actual costs incurred were $246,000 fixed and $144,000 variable. If the actual number of setups in May was 30, what is the activity-based flexible budget variance?

Accepted Answer

A)  $15,000 U 
B)  $15,000 F 
C)  $12,000 F 
D)  $12,000 U 
A)  $15,000 U 
B)  $15,000 F 
C)  $12,000 F 
D)  $12,000 U

Question 14

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. Prepare an overhead budget for the expected activity level of 10,000 units. The total budgeted overhead is

Accepted Answer

A)  $139,400. 
B)  $64,400. 
C)  $124,000. 
D)  $12,400. 
E)  None of these. 
A)  $139,400. 
B)  $64,400. 
C)  $124,000. 
D)  $12,400. 
E)  None of these.

Question 15

Bushman Company is planning to produce 3,200,000 carburetors for the coming year. Each carburetor requires 0.375 standard hours of labor for completion. The company uses direct labor hours to assign overhead to products. The total fixed overhead budgeted for the coming year is $1,980,000. Total budgeted overhead is $4,050,000. Predetermined overhead rates are calculated using expected production, measured in direct labor hours. Actual results for the year follow:
   Required:

Accepted Answer

The answer of Bushman Company is planning to produce 3,200,000...

Question 16

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

Accepted Answer

A)  $3.35 per direct labor hour. 
B)  $1.02 per direct labor hour. 
C)  $5.50 per direct labor hour. 
D)  $4 per direct labor hour. 
E)  None of these. 
A)  $3.35 per direct labor hour. 
B)  $1.02 per direct labor hour. 
C)  $5.50 per direct labor hour. 
D)  $4 per direct labor hour. 
E)  None of these.

Question 17

Crawford Company's standard fixed overhead cost is $6 per direct labor hour based on budgeted fixed costs of $600,000. The standard allows one direct labor hour per unit. During 2011, Crawford produced 110,000 units of product, incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labor. What is Crawford's fixed overhead spending variance for 2011?

Accepted Answer

A)  $60,000 F 
B)  $24,000 F 
C)  $36,000 U 
D)  $30,000 U 
A)  $60,000 F 
B)  $24,000 F 
C)  $36,000 U 
D)  $30,000 U

Question 18

An activity-budgetary system has the following benefit(s):

Accepted Answer

A)  it supports continuous improvement. 
B)  it supports process management. 
C)  it emphasizes cost reduction through elimination of wasteful activities. 
D)  it helps improve the efficiency of necessary activities. 
E)  all of these. 
A)  it supports continuous improvement. 
B)  it supports process management. 
C)  it emphasizes cost reduction through elimination of wasteful activities. 
D)  it helps improve the efficiency of necessary activities. 
E)  all of these.

Question 19

Fixed overhead was budgeted at $200,000, and 25,000 direct labor hours were budgeted. If the fixed overhead volume variance was $8,000 favorable and the fixed overhead spending variance was $6,000 unfavorable, fixed overhead applied must be

Accepted Answer

A)  $208,000. 
B)  $206,000. 
C)  $202,000. 
D)  $194,000. 
A)  $208,000. 
B)  $206,000. 
C)  $202,000. 
D)  $194,000.

Question 20

Activity flexible budgeting is the prediction of what activity costs will be as production output changes.

Accepted Answer

A) True 
 B)False

Budgeted costs change because total variable costs go up as output increases, therefore flexible budgets are sometimes referred to as _______________.

The company expects to perform 25 setups in May. -Refer to Figure 11-6. Prepare a flexible budget formula for the moving materials activity.

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. Calculate the variance for maintenance using an after-the-fact flexible budget.

______________________ is a prerequisite for assigning responsibility.

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

Match the following terms with the items below: -Activity-based budgeting

The company expects to perform 25 setups in May. -Refer to Figure 11-6. Suppose that the actual moves made are 80% of the forklifts' capacity. What is the after-the-fact budgeted fuel cost?

The _____________________ measures the aggregate effect of differences between the actual variable overhead rate and the standard variable overhead rate.

Responsibility for the fixed overhead volume variance is

In budgeting at the activity level, the cost behavior of each activity is defined with respect to

Which budget should be used to determine managerial effectiveness?

Activity flexible budgeting is the prediction of what activity costs will be as related output changes.

The company expects to perform 25 setups in May. -Refer to Figure 11-5. Actual costs incurred were $246,000 fixed and $144,000 variable. If the actual number of setups in May was 30, what is the activity-based flexible budget 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. Prepare an overhead budget for the expected activity level of 10,000 units. The total budgeted overhead is

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

An activity-budgetary system has the following benefit(s):

Fixed overhead was budgeted at $200,000, and 25,000 direct labor hours were budgeted. If the fixed overhead volume variance was $8,000 favorable and the fixed overhead spending variance was $6,000 unfavorable, fixed overhead applied must be

Activity flexible budgeting is the prediction of what activity costs will be as production output changes.

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

Budgeted costs change because total variable costs go up as output increases, therefore flexible budgets are sometimes referred to as _______________.

The company expects to perform 25 setups in May. -Refer to Figure 11-6. Prepare a flexible budget formula for the moving materials activity.

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. Calculate the variance for maintenance using an after-the-fact flexible budget.

______________________ is a prerequisite for assigning responsibility.

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

Match the following terms with the items below: -Activity-based budgeting

The company expects to perform 25 setups in May. -Refer to Figure 11-6. Suppose that the actual moves made are 80% of the forklifts' capacity. What is the after-the-fact budgeted fuel cost?

The _____________________ measures the aggregate effect of differences between the actual variable overhead rate and the standard variable overhead rate.

Responsibility for the fixed overhead volume variance is

In budgeting at the activity level, the cost behavior of each activity is defined with respect to

Which budget should be used to determine managerial effectiveness?

Activity flexible budgeting is the prediction of what activity costs will be as related output changes.

The company expects to perform 25 setups in May. -Refer to Figure 11-5. Actual costs incurred were $246,000 fixed and $144,000 variable. If the actual number of setups in May was 30, what is the activity-based flexible budget 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. Prepare an overhead budget for the expected activity level of 10,000 units. The total budgeted overhead is

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

An activity-budgetary system has the following benefit(s):

Fixed overhead was budgeted at $200,000, and 25,000 direct labor hours were budgeted. If the fixed overhead volume variance was $8,000 favorable and the fixed overhead spending variance was $6,000 unfavorable, fixed overhead applied must be

Activity flexible budgeting is the prediction of what activity costs will be as production output changes.

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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