Question 1

The planning of fixed overhead costs does NOT differ from the planning of variable overhead costs.

Accepted Answer

A) True 
 B)False

Question 2

Answer the following questions using the information below:
Christine Corporation manufactures baseball uniforms 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?

Accepted Answer

A) $162,000 
B) $171,000 
C) $190,000 
D) None of these answers is correct. 
A) $162,000 
B) $171,000 
C) $190,000 
D) None of these answers is correct.

Question 3

Answer the following questions using the information below:
Fearless Frank's Fertilizer Farm produces fertilizer and distributes the product by using his tanker trucks. Frank's uses budgeted fleet hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data:
    
-The variable overhead flexible-budget variance can be further subdivided into the:

Accepted Answer

A) price variance and the efficiency variance 
B) static-budget variance and sales-volume variance 
C) spending variance and the efficiency variance 
D) sales-volume variance and the spending variance 
A) price variance and the efficiency variance 
B) static-budget variance and sales-volume variance 
C) spending variance and the efficiency variance 
D) sales-volume variance and the spending variance

Question 4

Which of the following is NOT a step in developing budgeted fixed overhead rates?

Accepted Answer

A) Choose the period to use for the budget. 
B) Select the cost-allocation bases to use in allocating fixed overhead costs to output produced. 
C) Identify the fixed overhead costs associated with each cost-allocation base. 
D) All of the above are steps in developing budgeted fixed overhead rates. 
A) Choose the period to use for the budget. 
B) Select the cost-allocation bases to use in allocating fixed overhead costs to output produced. 
C) Identify the fixed overhead costs associated with each cost-allocation base. 
D) All of the above are steps in developing budgeted fixed overhead rates.

Question 5

Fixed overhead costs include:

Accepted Answer

A) the cost of sales commissions 
B) property taxes paid on plant facilities 
C) energy costs 
D) indirect materials 
A) the cost of sales commissions 
B) property taxes paid on plant facilities 
C) energy costs 
D) indirect materials

Question 6

Briefly explain why a favorable variable overhead spending variance may not always be desireable.

Accepted Answer

The variable overhead spending variance

Question 7

When machine-hours are used as a cost-allocation base, the item most likely to contribute to an unfavorable production-volume variance is:

Accepted Answer

A) a new competitor gaining market share 
B) a new manufacturing machine costing considerably more than expected 
C) an increase in the cost of energy 
D) strengthened demand for the product 
A) a new competitor gaining market share 
B) a new manufacturing machine costing considerably more than expected 
C) an increase in the cost of energy 
D) strengthened demand for the product

Question 8

Managers should use unitized fixed manufacturing overhead costs for planning and control.

Accepted Answer

A) True 
 B)False

Question 9

For fixed manufacturing overhead, there is no:

Accepted Answer

A) spending variance 
B) efficiency variance 
C) flexible-budget variance 
D) production-volume variance 
A) spending variance 
B) efficiency variance 
C) flexible-budget variance 
D) production-volume variance

Question 10

The fixed overhead efficiency variance is the difference between actual fixed overhead costs and fixed overhead costs in the flexible budget.

Accepted Answer

A) True 
 B)False

Question 11

Marshall Company uses a standard cost system. In April, $266,000 of variable manufacturing overhead costs were incurred and the flexible-budget amount for the month was $300,000. Which of the following variable manufacturing overhead entries would have been recorded for March?

Accepted Answer

A)   
B)   
C)   
D)   
A)   
B)   
C)   
D)

The planning of fixed overhead costs does NOT differ from the planning of variable overhead costs.

Which of the following is NOT a step in developing budgeted fixed overhead rates?

Fixed overhead costs include:

Briefly explain why a favorable variable overhead spending variance may not always be desireable.

When machine-hours are used as a cost-allocation base, the item most likely to contribute to an unfavorable production-volume variance is:

Managers should use unitized fixed manufacturing overhead costs for planning and control.

For fixed manufacturing overhead, there is no:

The fixed overhead efficiency variance is the difference between actual fixed overhead costs and fixed overhead costs in the flexible budget.

Marshall Company uses a standard cost system. In April, $266,000 of variable manufacturing overhead costs were incurred and the flexible-budget amount for the month was $300,000. Which of the following variable manufacturing overhead entries would have been recorded for March?

The Accountants Role in the Organization

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality, Time, and the Theory of Constraints

Inventory Management, Just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters

Exam 8: Flexible Budgets, Overhead Cost Variances, and Management Control

The planning of fixed overhead costs does NOT differ from the planning of variable overhead costs.

Which of the following is NOT a step in developing budgeted fixed overhead rates?

Fixed overhead costs include:

Briefly explain why a favorable variable overhead spending variance may not always be desireable.

When machine-hours are used as a cost-allocation base, the item most likely to contribute to an unfavorable production-volume variance is:

Managers should use unitized fixed manufacturing overhead costs for planning and control.

For fixed manufacturing overhead, there is no:

The fixed overhead efficiency variance is the difference between actual fixed overhead costs and fixed overhead costs in the flexible budget.

Marshall Company uses a standard cost system. In April, $266,000 of variable manufacturing overhead costs were incurred and the flexible-budget amount for the month was $300,000. Which of the following variable manufacturing overhead entries would have been recorded for March?

The Accountants Role in the Organization

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality, Time, and the Theory of Constraints

Inventory Management, Just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters