Question 1

Under standard costing,________.

Accepted Answer

A) fixed overhead costs are treated as if they are a variable cost 
B) fixed overhead costs are treated as if they are a fixed cost 
C) variable overhead costs are treated as if they are a fixed cost 
D) fixed overhead costs are treated as if they are a sunk cost 
A) fixed overhead costs are treated as if they are a variable cost 
B) fixed overhead costs are treated as if they are a fixed cost 
C) variable overhead costs are treated as if they are a fixed cost 
D) fixed overhead costs are treated as if they are a sunk cost

Question 2

Hockey Accessories Corporation manufactured 22,400 duffle bags during March.The following fixed overhead data pertain to March:
$\begin{array}{lll}& \text { Actual } & \text { Static Buidget } \
\text { Production } & 22,400 \text { units } & 23,000 \text { units } \
\text { Machine-hours } & 10,450 \text { hours } & 11,500 \text { hours } \
\text { Fixed overhead cost for March } & \$ 451,700 & \$ 460,000
\end{array}$
What is the flexible-budget amount?

Accepted Answer

A) $451,700 
B) $472,321 
C) $460,000 
D) $448,000 
A) $451,700 
B) $472,321 
C) $460,000 
D) $448,000

Question 3

J&J Materials and Construction Corporation produces mulch and distributes the product by using dump trucks.The company uses budgeted fleet hours to allocate variable manufacturing overhead.The following information pertains to the company's manufacturing overhead data:
$\begin{array}{ll}
\text { Budgeted output units } & 710 \text { truckloads } \
\text { Budgeted fleet hours } & 568 \text { hours } \
\text { Budgeted variable manufacturing overhead costs for } 710 \text { loads } & \$ 87,756.00
\end{array}$
$\begin{array}{ll}
\text { Actual output units produced and delivered } & 635 \text { truckloads } \
\text { Actual fleet hours } & 468 \text { hours } \
\text { Actual variable manufacturing overhead costs } & \$ 82,896.00
\end{array}$
What is the budgeted variable manufacturing overhead cost per unit?

Accepted Answer

A) $154.50 per unit 
B) $177.13 per unit 
C) $130.54 per unit 
D) $123.60 per unit 
A) $154.50 per unit 
B) $177.13 per unit 
C) $130.54 per unit 
D) $123.60 per unit

Question 4

The variable overhead efficiency variance is computed ________ and interpreted ________ the direct-cost efficiency variance.

Accepted Answer

A) the same as;the same as 
B) the same as;differently than 
C) differently than;the same as 
D) differently than;differently than 
A) the same as;the same as 
B) the same as;differently than 
C) differently than;the same as 
D) differently than;differently than

Question 5

An unfavorable price variance for materials-handling labor indicates that the actual cost per materials-handling labor-hour is less than the budgeted cost per materials-handling labor-hour.

Accepted Answer

A) True 
 B)False

Question 6

Majestic Corporation manufactures wheel barrows and uses budgeted machine hours to allocate variable manufacturing overhead.The following information relates to the company's manufacturing overhead data:
 
$\begin{array}{ll}
\text { Actual output units produced } & 32,475 \text { units } \
\text { Actual machine-hours used } & 15,000 \text { hours } \
\text { Actual variable manufacturing overhead costs } & \$ 384,060
\end{array}$
What is the flexible-budget amount for variable manufacturing overhead?

Accepted Answer

A) $358,785 
B) $409,185 
C) $384,060 
D) $336,755 
A) $358,785 
B) $409,185 
C) $384,060 
D) $336,755

Question 7

Teddy Company uses a standard cost system.In May,$234,000 of variable manufacturing overhead costs were incurred and the flexible-budget amount for the month was $240,000.Which of the following variable manufacturing overhead entries would have been recorded for May?

Accepted Answer

The answer of Teddy Company uses a standard cost system.In...

Question 8

Castleton Corporation manufactured 41,000 units during March.The following fixed overhead data relates to March:
$\begin{array}{lll}& \text { Actual } & \text { Static Buidget } \
\text { Production } & 41,000 \text { units } & 39,000 \text { units } \
\text { Machine-hours } & 6,020 \text { hours } & 5,850 \text { hours } \
\text { Fixed overhead costs for March } & \$ 125,500 & \$ 117,000
\end{array}$
What is the amount of fixed overhead allocated to production?

Accepted Answer

A) $128,210.13 
B) $117,000.00 
C) $125,500.00 
D) $123,000.00 
A) $128,210.13 
B) $117,000.00 
C) $125,500.00 
D) $123,000.00

Question 9

While calculating the costs of products and services,a standard costing system ________.

Accepted Answer

A) allocates overhead costs on the basis of the actual overhead-cost rates 
B) uses standard costs to determine the cost of products 
C) does not keep track of overhead cost 
D) traces direct costs to output by multiplying the standard prices or rates by the actual quantities 
A) allocates overhead costs on the basis of the actual overhead-cost rates 
B) uses standard costs to determine the cost of products 
C) does not keep track of overhead cost 
D) traces direct costs to output by multiplying the standard prices or rates by the actual quantities

Question 10

The flexible budget highlights the differences between budgeted costs and budgeted quantities versus actual costs and actual quantities for the budgeted output level.

Accepted Answer

A) True 
 B)False

Question 11

A company is using a standard cost system and receives its electricity bill.Electricity is considered a variable cost of operations for this company.The bill is for $15,000 and will be paid next month.Which of the following entries would be the correct recording of the electricity bill?

Accepted Answer

The answer of A company is using a standard cost...

Question 12

What are the arguments for prorating a production-volume variance that has been deemed to be material among work-in-process,finished goods,cost and cost of goods sold as opposed to writing it all off to cost of goods sold?

Accepted Answer

If variances are always written off to c

Question 13

Causes of a favorable variable overhead efficiency variance might include using lower-skilled workers than expected.

Accepted Answer

A) True 
 B)False

Question 14

Lazy Guy Corporation manufactured 6,000 chairs during June.The following variable overhead data relates to June:
 
What is the variable overhead spending variance?

Accepted Answer

A) $5,110 favorable 
B) $5,900 favorable 
C) $5,900 unfavorable 
D) $5,110 unfavorable 
A) $5,110 favorable 
B) $5,900 favorable 
C) $5,900 unfavorable 
D) $5,110 unfavorable

Question 15

Managers can use variance analysis to make decisions about the mix of products to make.

Accepted Answer

A) True 
 B)False

Question 16

At the end of the fiscal year,the fixed overhead spending variance is always prorated among work-in-process control,finished goods control,and cost of goods sold on the basis of the fixed overhead allocated to these accounts.

Accepted Answer

A) True 
 B)False

Question 17

Russo Corporation manufactured 15,000 air conditioners during November.The overhead cost-allocation base is $33.25 per machine-hour.The following variable overhead data pertain to November:
$\begin{array}{lll}&\text { Actual }&\text { Budgeted } \
\text { Production } & 15,000 \text { units } & 18,000 \text { units } \
\text { Machine-hours } & 13,275 \text { hours } & 14,400 \text { hours } \
\text { Variable overhead cost per machine-hour: } & \$ 33,00 & \$ 33.25
\end{array}$
What is the flexible-budget amount?

Accepted Answer

A) $441,394 
B) $399,000 
C) $396,000 
D) $475,200 
A) $441,394 
B) $399,000 
C) $396,000 
D) $475,200

Question 18

The planning of fixed overhead costs differs from the planning of variable overhead costs in terms of timing.

Accepted Answer

A) True 
 B)False

Question 19

Comfort Company manufactures pillows.The 2015 operating budget is based on production of 25,000 pillows with 0.75 machine-hour allowed per pillow.Budgeted variable overhead per hour was $25.
Actual production for 2015 was 27,000 pillows using 19,050 machine-hours.Actual variable costs were $23 per machine-hour.
Required:
Calculate the variable overhead spending and efficiency variances.

Accepted Answer

Budgeted variable overhead = $25 × (25,0

Question 20

Skizone Company's 4-Variance Analysis:
 
If Skizone's combined 4-Variance Analysis shows an unfavorable spending variance of $2,900,what is the fixed overhead spending variance (a)?

Accepted Answer

A) $9,800 favorable 
B) $4,000 unfavorable 
C) $9,800 unfavorable 
D) $4,000 favorable 
A) $9,800 favorable 
B) $4,000 unfavorable 
C) $9,800 unfavorable 
D) $4,000 favorable

Under standard costing,________.

The variable overhead efficiency variance is computed and interpreted the direct-cost efficiency variance.

An unfavorable price variance for materials-handling labor indicates that the actual cost per materials-handling labor-hour is less than the budgeted cost per materials-handling labor-hour.

Teddy Company uses a standard cost system.In May,$234,000 of variable manufacturing overhead costs were incurred and the flexible-budget amount for the month was $240,000.Which of the following variable manufacturing overhead entries would have been recorded for May?

While calculating the costs of products and services,a standard costing system ________.

The flexible budget highlights the differences between budgeted costs and budgeted quantities versus actual costs and actual quantities for the budgeted output level.

A company is using a standard cost system and receives its electricity bill.Electricity is considered a variable cost of operations for this company.The bill is for $15,000 and will be paid next month.Which of the following entries would be the correct recording of the electricity bill?

What are the arguments for prorating a production-volume variance that has been deemed to be material among work-in-process,finished goods,cost and cost of goods sold as opposed to writing it all off to cost of goods sold?

Causes of a favorable variable overhead efficiency variance might include using lower-skilled workers than expected.

Lazy Guy Corporation manufactured 6,000 chairs during June.The following variable overhead data relates to June: What is the variable overhead spending variance?

Managers can use variance analysis to make decisions about the mix of products to make.

At the end of the fiscal year,the fixed overhead spending variance is always prorated among work-in-process control,finished goods control,and cost of goods sold on the basis of the fixed overhead allocated to these accounts.

The planning of fixed overhead costs differs from the planning of variable overhead costs in terms of timing.

Skizone Company's 4-Variance Analysis: If Skizone's combined 4-Variance Analysis shows an unfavorable spending variance of $2,900,what is the fixed overhead spending variance (a)?

The Manager and Management Accounting

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

Strategy,balanced Scorecard,and Strategic Profitability Analysis

Pricing Decisions and Cost Management

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 and Time

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

Under standard costing,________.

The variable overhead efficiency variance is computed ________ and interpreted ________ the direct-cost efficiency variance.

An unfavorable price variance for materials-handling labor indicates that the actual cost per materials-handling labor-hour is less than the budgeted cost per materials-handling labor-hour.

Teddy Company uses a standard cost system.In May,$234,000 of variable manufacturing overhead costs were incurred and the flexible-budget amount for the month was $240,000.Which of the following variable manufacturing overhead entries would have been recorded for May?

While calculating the costs of products and services,a standard costing system ________.

The flexible budget highlights the differences between budgeted costs and budgeted quantities versus actual costs and actual quantities for the budgeted output level.

A company is using a standard cost system and receives its electricity bill.Electricity is considered a variable cost of operations for this company.The bill is for $15,000 and will be paid next month.Which of the following entries would be the correct recording of the electricity bill?

What are the arguments for prorating a production-volume variance that has been deemed to be material among work-in-process,finished goods,cost and cost of goods sold as opposed to writing it all off to cost of goods sold?

Causes of a favorable variable overhead efficiency variance might include using lower-skilled workers than expected.

Lazy Guy Corporation manufactured 6,000 chairs during June.The following variable overhead data relates to June: What is the variable overhead spending variance?

Managers can use variance analysis to make decisions about the mix of products to make.

At the end of the fiscal year,the fixed overhead spending variance is always prorated among work-in-process control,finished goods control,and cost of goods sold on the basis of the fixed overhead allocated to these accounts.

The planning of fixed overhead costs differs from the planning of variable overhead costs in terms of timing.

Skizone Company's 4-Variance Analysis: If Skizone's combined 4-Variance Analysis shows an unfavorable spending variance of $2,900,what is the fixed overhead spending variance (a)?

The Manager and Management Accounting

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

Strategy,balanced Scorecard,and Strategic Profitability Analysis

Pricing Decisions and Cost Management

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 and Time

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

The variable overhead efficiency variance is computed and interpreted the direct-cost efficiency variance.