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

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: What is the flexible-budget amount?

When variances are immaterial, which of the following statements is true of the journal entry to write-off the variable overhead variance accounts?

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: 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.)

The fixed setup overhead flexible-budget variance is calculated as actual costs - flexible-budget variance.

If budgeted and actual machine hours are equal, spending variance will always be nil.

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.

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?

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: What is the variable overhead spending variance?

Most of the decisions determining the level of fixed overhead costs to be incurred will be made ________.

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?

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

Outdoor Gear Corporation manufactured 5,000 coolers during October. The following variable overhead data relates to October: Calculate the actual machine hours used by Stark during October.

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.)

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.

In a combined 3-variance analysis, the total spending variance would be ________.

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

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

The above table is a ________.

Prorated allocation of production-volume variance has the effect of approximating the allocation of fixed costs based on actual costs and actual output.

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.)