Question 1

A flexible budgetary approach can be used to emphasize cost reduction and process management.

Accepted Answer

A) True 
 B)False

Question 2

$\begin{array}{ll}
\text { Fixed costs per month } & \$ 240,000 \
\text { Variable cost per setup } & \$ 5,400
\end{array}$
-Refer to the Figure.Actual costs incurred were $246,000 fixed and $144,000 variable.Suppose the actual number of setups in June was 30.What would be the activity-based flexible budget variance?

Accepted Answer

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

Question 3

What is the formula for the variable overhead spending variance?

Accepted Answer

A)  (AH − SH)SVOR 
B)  (AVOR − SVOR)SH 
C)  (AVOR − SVOR)AH 
D)  (AH − SH)AVOR 
A)  (AH − SH)SVOR 
B)  (AVOR − SVOR)SH 
C)  (AVOR − SVOR)AH 
D)  (AH − SH)AVOR

Question 4

What are the two variances for fixed overhead?

Accepted Answer

A)  budget and efficiency 
B)  efficiency and usage 
C)  volume and spending 
D)  usage and volume 
A)  budget and efficiency 
B)  efficiency and usage 
C)  volume and spending 
D)  usage and volume

Question 5

Assume that the expectations on the static budget were met.What can be concluded?

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. 
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.

Question 6

What are the two variances for variable overhead?

Accepted Answer

A)  spending and efficiency variances 
B)  budget and spending variances 
C)  volume and budget variances 
D)  efficiency and volume variances 
A)  spending and efficiency variances 
B)  budget and spending variances 
C)  volume and budget variances 
D)  efficiency and volume variances

Question 7

$\begin{array}{lrr}\text { Overhead Item }&\text { Fixed Cost }&\text { Variable Rate per DLH }\
\text { Maintenance } & \$ 52,000 & \$ 1.20 \
\text { Power } & & 1.50 \
\text { Indirect labour } & 79,500 & 4.80 \
\text { Rent } & 54,000 &
\end{array}$
-Refer to the Figure.Prepare an annual budget for the activity,assuming that all of the capacity of the activity is used (use kilometres as the activity driver).Identify which resources you would treat as fixed costs and which would be viewed as variable costs.

Accepted Answer

@#IMG-DLM& Capacity is determined by dri

Question 8

The difference between which two amounts equals the total variable overhead variance?

Accepted Answer

A)  the actual overhead and the budgeted overhead 
B)  the total actual variable overhead and the total budgeted variable overhead 
C)  the total actual variable overhead and the total applied variable overhead 
D)  the total actual variable overhead and the total applied overhead 
A)  the actual overhead and the budgeted overhead 
B)  the total actual variable overhead and the total budgeted variable overhead 
C)  the total actual variable overhead and the total applied variable overhead 
D)  the total actual variable overhead and the total applied overhead

Question 9

$\begin{array}{lrr}&\text { Static budget } & \text { Actual costs } \
&(20,000 \text { hours }) & (22,000 \text { hours })\
\text { Direct materials } & \$ 80,000 & \$ 87,000 \
\text { Direct labour } & 160,000 & 174,000 \
\text { Rent } & 48,000 & 50,000 \
\text { Total } & \$ 288,000 & \$ 311000
\end{array}$
-Refer to the Figure.Which of the following can be concluded when comparing the static budget to the actual outcomes?

Accepted Answer

A)  The manager had less direct labour hours. 
B)  The variances are all unfavourable. 
C)  The comparison is useful for assessing managerial efficiency. 
D)  A static budget should be used for assessing efficiency. 
A)  The manager had less direct labour hours. 
B)  The variances are all unfavourable. 
C)  The comparison is useful for assessing managerial efficiency. 
D)  A static budget should be used for assessing efficiency.

A flexible budgetary approach can be used to emphasize cost reduction and process management.

Fixed costs per month \ 240,000 Variable cost per setup \ 5,400 -Refer to the Figure.Actual costs incurred were $246,000 fixed and $144,000 variable.Suppose the actual number of setups in June was 30.What would be the activity-based flexible budget variance?

What is the formula for the variable overhead spending variance?

What are the two variances for fixed overhead?

Assume that the expectations on the static budget were met.What can be concluded?

What are the two variances for variable overhead?

The difference between which two amounts equals the total variable overhead variance?

Static budget Actual costs (20,000 hours ) (22,000 hours ) Direct materials \ 80,000 \ 87,000 Direct labour 160,000 174,000 Rent 48,000 50,000 Total \ 288,000 \ 311000 -Refer to the Figure.Which of the following can be concluded when comparing the static budget to the actual outcomes?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters

Exam 11: Flexible Budgets and Overhead Analysis

A flexible budgetary approach can be used to emphasize cost reduction and process management.

Fixed costs per month \ 240,000 Variable cost per setup \ 5,400 -Refer to the Figure.Actual costs incurred were $246,000 fixed and $144,000 variable.Suppose the actual number of setups in June was 30.What would be the activity-based flexible budget variance?

What is the formula for the variable overhead spending variance?

What are the two variances for fixed overhead?

Assume that the expectations on the static budget were met.What can be concluded?

What are the two variances for variable overhead?

The difference between which two amounts equals the total variable overhead variance?

Static budget Actual costs (20,000 hours ) (22,000 hours ) Direct materials \ 80,000 \ 87,000 Direct labour 160,000 174,000 Rent 48,000 50,000 Total \ 288,000 \ 311000 -Refer to the Figure.Which of the following can be concluded when comparing the static budget to the actual outcomes?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing,and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters