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

'Managers should be wary of using the same unitized fixed overhead costs for planning and control purposes'.Do you agree with this argument? Give reasons for your answer.

Abby Company has just implemented a new cost accounting system that provides two variances for fixed manufacturing overhead.While the company's managers are familiar with the concept of spending variances,they are unclear as to how to interpret the production-volume overhead variances.Currently,the company has a production capacity of 54,000 units a month,although it generally produces only 46,000 units.However,in any given month the actual production is probably something other than 46,000. Required: a.Does the production-volume overhead variance measure the difference between the 54,000 and 46,000,or the difference between the 46,000 and the actual monthly production? Explain. b.What advice can you provide the managers that will help them interpret the production-volume overhead variances?

Hockey Accessories Corporation manufactured 21,400 duffle bags during March.The following fixed overhead data pertain to March: Actual Static Buidget Production 21,400 units 22,000 units Machine-hours 3,400 hours 4,400 hours Fixed overhead cost for March \ 176,300 \ 184.800 What is the amount of fixed overhead spending variance?

Radon Corporation manufactured 38,100 units during March.The following fixed overhead data pertain to March: What is the fixed overhead spending variance?

Which of the following is the correct mathematical expression to calculate the fixed overhead spending variance?

Zitrik Corporation manufactured 130,000 buckets during February.The variable overhead cost-allocation base is $5.30 per machine-hour.The following variable overhead data pertain to February: Actual Budgeted Production 130,000 units 130,000 units Machine-hours 9,500 hours 9,000 hours Variable overhead cost per machine-hour \ 5.35 \ 5.30 What is the variable overhead efficiency variance?

Bristol Fabricators,Inc. ,produces air purifiers in batches.To manufacture a batch of the purifiers,Bristol Fabricator,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 variable overhead setup costs.(Round all intermediary calculations two decimal places and your final answer to the nearest whole number. )

Outdoor Gear Corporation manufactured 1,000 coolers during October.The following variable overhead data relates to October: Calculate the variable overhead flexible-budget variance.

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

Standard costing is a costing system that allocates overhead costs on the basis of the standard overhead-cost rates times the standard quantities of the allocation bases allowed for the actual outputs produced.

Cold Products Corporation manufactured 27,000 ice chests during September.The variable overhead cost-allocation base is $11.75 per machine-hour.The following variable overhead data pertain to September: Actual Budgeted Production 27,000 units 26,000 units Machine-hours 13,500 hours 7,800 hours Variable overhead cost per machine-hour: \ 11,25 \ 11.75 What is the variable overhead efficiency variance?

Which of the following journal entries is used to record actual variable overhead costs incurred?

An unfavorable fixed overhead spending variance indicates that ________.

Unskilled work force can lead to unfavorable efficiency variance.

Effective planning of variable overhead costs means that managers must

Home Plate 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 budgeted variable overhead cost rate per output unit?

Castleton Corporation manufactured 36,000 units during March.The following fixed overhead data relates to March: Actual Static Buidget Production 36,000 units 34,000 units Machine-hours 6,960 hours 6,800 hours Fixed overhead costs for March \ 164,700 \ 156,400 What is the flexible-budget amount?

The amount reported for fixed overhead on the static budget is also reported ________.

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

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: Budgeted output units 690 truckloads Budgeted fleet hours 621 hours Budgeted variable manufacturing overhead costs for 690 loads \ 94,392 Actual output units produced and delivered 630 truckloads Actual fleet hours 546 hours Actual variable manufacturing overhead costs \ 89,592 What is the flexible-budget amount for variable manufacturing overhead? (Round intermediary calculations two decimal places and your final answer to the nearest whole dollar. )