Exam 8: Flexible Budgets, Variances, and Management Control: II

Different management levels in Bates Inc.require varying degrees of managerial accounting information.Because of the need to comply with the managers' requests, four different variances for manufacturing overhead are computed each month.The information for the September overhead expenditures is as follows: Required: a.Compute a 4-variance analysis for the plant controller. b.Compute a 3-variance analysis for the plant manager. c.Compute a 2-variance analysis for the corporate controller. d.Compute the flexible-budget variance for the manufacturing vice-president.

Answer the following question(s)using the information below.Jenny's Corporation manufactured 25,000 grooming kits for horses during March.The fixed-overhead cost allocation rate is $20.00 per machine-hour.The following fixed overhead data pertain to March: -What is the flexible-budget amount for fixed-overhead?

Answer the following question(s)using the information below.Jenny's Corporation manufactured 25,000 grooming kits for horses during March.The fixed-overhead cost allocation rate is $20.00 per machine-hour.The following fixed overhead data pertain to March: -What is the production-volume variance?

When machine-hours are used as a cost allocation base, the item MOST likely to contribute to a favourable production-volume variance is

Which decisions are most likely to have been made by the start of the accounting period?

Answer the following question(s)using the information below.Cakewalk Ltd.delivers shoes in batches.The following information pertains to shipping dance shoes in June: -What is the Cakewalk Ltd.rate variance for fixed shipping overhead costs?

Cirilla's Weathervane Company manufactures weathervanes.The current year operating budget is based on the production of 10,000 weathervanes with 1.25 machine-hour allowed per weathervane.Variable manufacturing overhead is anticipated to be $300,000.Actual production was 11,000 weathervanes using 12,100 machine-hours.Actual variable costs were $23.75 per machine-hour.Required: Calculate the variable overhead rate and the efficiency variances.

The production-volume variance arises because the actual output level differs from the output level used as the denominator to calculate the budgeted fixed overhead rate.

Answer the following question(s)using the information below.Willis Corporation manufactures industrial-sized gas furnaces and uses budgeted machine-hours to allocate variable manufacturing overhead.The following information pertains to the company's manufacturing overhead data: -What is the flexible-budget amount for variable manufacturing overhead?

An unfavourable variable overhead rate variance indicates that

Managers have found that non-financial measures provide useful information for their planning and control decisions.

In the journal entry that records overhead variances, the manufacturing overhead allocated accounts are closed.

Answer the following question(s)using the information below.Lukehart Industries Inc.produces air purifiers in batches.To manufacture a batch of the purifiers Lukehart Inc.must setup the machines and assembly line tooling.Setup costs are batch-level costs because they are associated with batches rather than individual units of products.A separate Setup Department is responsible for setting up machines and tooling for different models of the air purifiers.Setup overhead costs consist of some costs that are variable and some costs that are fixed with respect to the number of setup hours.The following information pertains to June 2012: -Calculate the rate variance for fixed setup overhead costs.

Answer the following question(s)using the information below.Cakewalk Ltd.delivers shoes in batches.The following information pertains to shipping dance shoes in June: -What is the Cakewalk Ltd.production-volume variance for fixed shipping overhead costs?

Johnston Equipment develops food processing equipment.The budgeted fixed overhead costs for 2018 total $768,000.The company uses direct labour-hours for fixed overhead allocation and anticipates 480,000 hours during the year for 960,000 units.An equal number of units are budgeted for each month.During April 84,000 packages (units)were produced and $66,000 was spent on fixed overhead.Required: a.Determine the fixed overhead rate for 2018 based on direct labour-hours. b.Determine the fixed overhead static-budget variance for April. c.Determine the production-volume overhead variance for April.

Answer the following question(s)using the information below.Lukehart Industries Inc.produces air purifiers in batches.To manufacture a batch of the purifiers Lukehart Inc.must setup the machines and assembly line tooling.Setup costs are batch-level costs because they are associated with batches rather than individual units of products.A separate Setup Department is responsible for setting up machines and tooling for different models of the air purifiers.Setup overhead costs consist of some costs that are variable and some costs that are fixed with respect to the number of setup hours.The following information pertains to June 2012: -Calculate the efficiency variance for variable setup overhead costs.