Question 1

Explain why there is no efficiency variance for fixed manufacturing overhead costs.

Accepted Answer

There is no efficiency variance for fixe

Question 2

Bismith Company reported:
 
To record the write-off of these variances at the end of the accounting period,Bismith would ________.

Accepted Answer

A) credit Fixed Manufacturing Overhead Allocated for $700,000 
B) debit Fixed Manufacturing Overhead Spending Variance for $40,000 
C) credit Fixed Manufacturing Production-Volume Variance for $30,000 
D) debit Fixed Manufacturing Control for $700,000 
A) credit Fixed Manufacturing Overhead Allocated for $700,000 
B) debit Fixed Manufacturing Overhead Spending Variance for $40,000 
C) credit Fixed Manufacturing Production-Volume Variance for $30,000 
D) debit Fixed Manufacturing Control for $700,000

Question 3

Russo Corporation manufactured 21,000 air conditioners during November.The overhead cost-allocation base is $34.25 per machine-hour.The following variable overhead data pertain to November:
$\begin{array}{lll}&\text { Actual }&\text { Budgeted } \
\text { Production } & 21,000 \text { units } & 24,000 \text { units } \
\text { Machine-hours } & 13,300 \text { hours } & 14,400 \text { hours } \
\text { Variable overhead cost per machine-hour: } & \$ 34,00 & \$ 34,25
\end{array}$
What is the variable overhead spending variance?

Accepted Answer

A) $3,600.00 unfavorable 
B) $3,325.00 unfavorable 
C) $3,600.00 favorable 
D) $3,325.00 favorable 
A) $3,600.00 unfavorable 
B) $3,325.00 unfavorable 
C) $3,600.00 favorable 
D) $3,325.00 favorable

Question 4

Possible reasons for the larger actual materials-handling labor-hours per batch include the possibility of inefficient layout of production facilities.

Accepted Answer

A) True 
 B)False

Question 5

Computing standard costs at the start of the budget period results in a complex record keeping system.

Accepted Answer

A) True 
 B)False

Question 6

Favorable overhead variances are always recorded with credits in a standard cost system.

Accepted Answer

A) True 
 B)False

Question 7

Marshall Company uses a standard cost system.In March,$270,000 of variable manufacturing overhead costs were incurred and the flexible-budget amount for the month was $310,000.Which of the following variable manufacturing overhead entries would have been recorded for March?

Accepted Answer

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

Question 8

Davidson Corporation manufactured 52,400 units during September.The following fixed overhead data relates to September:
$\begin{array}{lll}& \text { Actual } & \text { Static Buidget } \
\text { Production } & 52,400 \text { units } & 52,000 \text { units } \
\text { Machine-hours } & 2,485 \text { hours } & 2,600 \text { hours } \
\text { Fixed overhead costs for September } & \$ 108,900 & \$ 109,200
\end{array}$
What is the flexible-budget amount?

Accepted Answer

A) $108,900 
B) $110,040 
C) $109,200 
D) $52,400 
A) $108,900 
B) $110,040 
C) $109,200 
D) $52,400

Question 9

Tightly budgeted machine time standards can lead to unfavorable variable overhead efficiency variance.

Accepted Answer

A) True 
 B)False

Question 10

Radon Corporation manufactured 37,500 units during March.The following fixed overhead data pertain to March:
 
What is the fixed overhead production-volume variance?

Accepted Answer

A) $9,200.00 unfavorable 
B) $21,000.00 favorable 
C) $21,000.00 unfavorable 
D) $9,200.00 favorable 
A) $9,200.00 unfavorable 
B) $21,000.00 favorable 
C) $21,000.00 unfavorable 
D) $9,200.00 favorable

Question 11

When fixed overhead spending variance is unfavorable,it can be safely assumed that ________.

Accepted Answer

A) flexible budget amount is higher than actual costs incurred 
B) fixed overhead allocated for actual output is lower than actual costs incurred 
C) flexible budget amount is lower than actual costs incurred 
D) fixed overhead allocated for actual output is higher than actual costs incurred 
A) flexible budget amount is higher than actual costs incurred 
B) fixed overhead allocated for actual output is lower than actual costs incurred 
C) flexible budget amount is lower than actual costs incurred 
D) fixed overhead allocated for actual output is higher than actual costs incurred

Question 12

J&J Materials and Construction Corporation produces fertilizer 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:
$\begin{array}{ll}
\text { Budgeted output units } & 680 \text { truckloads } \
\text { Budgeted fleet hours } & 476 \text { hours } \
\text { Budgeted variable manufacturing overhead costs for } 680 \text { loads } & \$ 72,590.00
\end{array}$
$\begin{array}{ll}
\text { Actual output units produced and delivered } & 615 \text { truckloads } \
\text { Actual fleet hours } & 376 \text { hours } \
\text { Actual variable manufacturing overhead costs } & \$ 67,790,00
\end{array}$
What is the flexible-budget variance for variable manufacturing overhead?

Accepted Answer

A) $4,800 favorable 
B) $4,800 unfavorable 
C) $2,139 favorable 
D) $2,139 unfavorable 
A) $4,800 favorable 
B) $4,800 unfavorable 
C) $2,139 favorable 
D) $2,139 unfavorable

Question 13

Cold Products Corporation manufactured 27,000 ice chests during September.The variable overhead cost-allocation base is $15.00 per machine-hour.The following variable overhead data pertain to September:
$\begin{array}{lll}&\text { Actual }&\text { Budgeted } \
\text { Production } & 27,000 \text { units } & 20,000 \text { units } \
\text { Machine-hours } & 21,600 \text { hours } & 6,000 \text { hours } \
\text { Variable overhead cost per machine-hour: } & \$ 14.75 & \$ 15,00
\end{array}$
What is the flexible-budget amount?

Accepted Answer

A) $90,000 
B) $121,500 
C) $318,600 
D) $324,000 
A) $90,000 
B) $121,500 
C) $318,600 
D) $324,000

Question 14

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:
 
$\begin{array}{ll}
\text { Actual output units produced } & 47,500 \text { units } \
\text { Actual machine-hours used } & 15,100 \text { hours } \
\text { Actual variable manufacturing overhead costs } & \$ 387,518
\end{array}$
What is the amount of the budgeted variable manufacturing overhead cost per unit? (Do not round any intermediary calculations.Round your final answer to the nearest cent. )

Accepted Answer

A) $8.91 
B) $8.06 
C) $8.80 
D) $8.16 
A) $8.91 
B) $8.06 
C) $8.80 
D) $8.16

Question 15

Healthy Earth Products Inc.produces fertilizer and distributes the product by using company trucks.The controller of the company uses budgeted fleet hours to allocate variable manufacturing overhead.The following information relates to the company's manufacturing overhead data:

What is the budgeted variable overhead cost rate per output unit?

Accepted Answer

A) $114.00 
B) $117.00 
C) $123.16 
D) $120.00 
A) $114.00 
B) $117.00 
C) $123.16 
D) $120.00

Question 16

Russo Corporation manufactured 17,000 air conditioners during November.The overhead cost-allocation rate is $35.50 per machine-hour.The following variable overhead data pertain to November:
$\begin{array}{lll}&\text { Actual }&\text { Budgeted } \
\text { Production } & 17,000 \text { units } & 19,000 \text { units } \
\text { Machine-hours } & 8,325 \text { hours } & 9,500 \text { hours } \
\text { Variable overhead cost per machine-hour: } & \$ 35.00 & \$ 35.50
\end{array}$
What is the variable overhead efficiency variance?

Accepted Answer

A) $6,212.50 favorable 
B) $6,212.50 unfavorable 
C) $4,750.00 favorable 
D) $4,750.00 unfavorable 
A) $6,212.50 favorable 
B) $6,212.50 unfavorable 
C) $4,750.00 favorable 
D) $4,750.00 unfavorable

Question 17

List the four steps to develop budgeted variable overhead cost-allocation.

Accepted Answer

Step 1: Choose the period to be used for

Question 18

Which of the following mathematical expression is used to calculate budgeted variable overhead cost rate per output unit?

Accepted Answer

A) Budgeted output allowed per input unit × Budgeted variable overhead cost rate per input unit 
B) Budgeted input allowed per output unit ÷ Budgeted variable overhead cost rate per input unit 
C) Budgeted output allowed per input unit ÷ Budgeted variable overhead cost rate per input unit 
D) Budgeted input allowed per output unit × Budgeted variable overhead cost rate per input unit 
A) Budgeted output allowed per input unit × Budgeted variable overhead cost rate per input unit 
B) Budgeted input allowed per output unit ÷ Budgeted variable overhead cost rate per input unit 
C) Budgeted output allowed per input unit ÷ Budgeted variable overhead cost rate per input unit 
D) Budgeted input allowed per output unit × Budgeted variable overhead cost rate per input unit

Question 19

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 spending variance for variable overhead setup costs.(Round all intermediary calculations two decimal places and your final answer to the nearest whole number. )

Accepted Answer

A) $2,313 unfavorable 
B) $2,313 favorable 
C) $682 unfavorable 
D) $682 favorable 
A) $2,313 unfavorable 
B) $2,313 favorable 
C) $682 unfavorable 
D) $682 favorable

Question 20

Briefly explain the meaning of the variable overhead efficiency variance and the variable overhead spending variance.

Accepted Answer

The variable overhead efficiency varianc

Explain why there is no efficiency variance for fixed manufacturing overhead costs.

Bismith Company reported: To record the write-off of these variances at the end of the accounting period,Bismith would ________.

Possible reasons for the larger actual materials-handling labor-hours per batch include the possibility of inefficient layout of production facilities.

Computing standard costs at the start of the budget period results in a complex record keeping system.

Favorable overhead variances are always recorded with credits in a standard cost system.

Marshall Company uses a standard cost system.In March,$270,000 of variable manufacturing overhead costs were incurred and the flexible-budget amount for the month was $310,000.Which of the following variable manufacturing overhead entries would have been recorded for March?

Tightly budgeted machine time standards can lead to unfavorable variable overhead efficiency variance.

Radon Corporation manufactured 37,500 units during March.The following fixed overhead data pertain to March: What is the fixed overhead production-volume variance?

When fixed overhead spending variance is unfavorable,it can be safely assumed that ________.

List the four steps to develop budgeted variable overhead cost-allocation.

Which of the following mathematical expression is used to calculate budgeted variable overhead cost rate per output unit?

Briefly explain the meaning of the variable overhead efficiency variance and the variable overhead spending variance.

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

Explain why there is no efficiency variance for fixed manufacturing overhead costs.

Bismith Company reported: To record the write-off of these variances at the end of the accounting period,Bismith would ________.

Possible reasons for the larger actual materials-handling labor-hours per batch include the possibility of inefficient layout of production facilities.

Computing standard costs at the start of the budget period results in a complex record keeping system.

Favorable overhead variances are always recorded with credits in a standard cost system.

Marshall Company uses a standard cost system.In March,$270,000 of variable manufacturing overhead costs were incurred and the flexible-budget amount for the month was $310,000.Which of the following variable manufacturing overhead entries would have been recorded for March?

Tightly budgeted machine time standards can lead to unfavorable variable overhead efficiency variance.

Radon Corporation manufactured 37,500 units during March.The following fixed overhead data pertain to March: What is the fixed overhead production-volume variance?

When fixed overhead spending variance is unfavorable,it can be safely assumed that ________.

List the four steps to develop budgeted variable overhead cost-allocation.

Which of the following mathematical expression is used to calculate budgeted variable overhead cost rate per output unit?

Briefly explain the meaning of the variable overhead efficiency variance and the variable overhead spending variance.

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