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

Fixed overhead costs for March for a factory were Salaries of $44,000,depreciation of $10,000,and property taxes of $4,000.Which of the following journal entries would be correct?

Lump-sum fixed costs of acquiring capacity decrease automatically if the capacity needed turns out to be less than the capacity acquired.

The major challenge when planning fixed overhead is ________.

Raposa,Inc. ,produces a special line of plastic toy racing cars.Raposa,Inc. ,produces the cars in batches.To manufacture a batch of the cars,Raposa,Inc. ,must set up the machines and molds.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 molds for different styles of car. 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 2015: Calculate the efficiency variance for variable overhead setup costs.(Round all intermediary calculations two decimal places and your final answer to the nearest whole number. )

When machine-hours are used as an overhead cost-allocation base and annual leasing costs for equipment unexpectedly increase,the most likely result would be to report a(n)________.

If the production planners set the budgeted machine hours standards too loose,one could anticipate there would be a favorable fixed overhead efficiency variance.

The variable overhead flexible-budget variance can be further explained by calculating the:

Bristol Fabricators,Inc. ,produces air purifiers in batches.To manufacture a batch of the purifiers,Bristol Fabricators,Inc. ,must set up 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 2015: Calculate the spending variance for fixed overhead setup costs.

Fixed overhead costs include ________.

Compared to variable overhead costs planning,fixed overhead cost planning has an additional strategic issue beyond undertaking only essential activities and efficient operations.That additional requirement is best described as:

Russo Corporation manufactured 21,000 air conditioners during November.The overhead cost-allocation base is $34.50 per machine-hour.The following variable overhead data pertain to November: Actual Budgeted Production 21,000 units 23,000 units Machine-hours 12,700 hours 13,800 hours Variable overhead cost per machine-hour: \ 34,00 \ 34,50 What is the total variable overhead variance?

What is a standard costing system?

Fixed costs automatically increase or decrease with the level of activity within a relevant range of activity.

Davidson Corporation manufactured 53,400 units during September.The following fixed overhead data relates to September: Actual Static Buidget Production 53,400 units 53,000 units Machine-hours 1,960 hours 2,120 hours Fixed overhead costs for September \ 86,520 \ 86,920 What is the fixed overhead spending variance?

Which of the following best defines standard costing?

Managers can always view a favorable variable overhead spending variance as desirable.

Lancelot Corporation manufactures tennis gear and uses budgeted machine-hours to allocate variable manufacturing overhead.The following information relates to the company's manufacturing overhead data: Actual output units produced 9,800 units Actual machine-hours used 28,100 hours Actual variable manufacturing overhead costs \ 250,000 What is the amount of the budgeted variable manufacturing overhead cost per unit?

Prorated allocation of production-volume variance results in a higher operating income for current year than if the entire favorable production-volume variance were credited to Cost of Goods Sold.

Bristol Fabricators,Inc. ,produces air purifiers in batches.To manufacture a batch of the purifiers,Bristol Fabricators,Inc. ,must set up 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 2015: Calculate the flexible-budget variance for variable overhead setup costs.(Round all intermediary calculations two decimal places and your final answer to the nearest whole number. )

Hockey Accessories Corporation manufactured 23,000 duffle bags during March.The following fixed overhead data pertain to March: Actual Static Buidget Production 23,000 units 23,500 units Machine-hours 13,100 hours 14,100 hours Fixed overhead cost for March \ 626,100 \ 634,500 What is the amount of fixed overhead allocated to production?