Question 1

Which of the following steps is not one of the four steps of developing a budgeted fixed overhead rate?

Accepted Answer

A) Choose the period to use for the budget. 
B) Select the cut-off parameters of the fixed overhead cost allocations. 
C) Select the cost-allocation bases to use in allocating fixed overhead costs to output produced. 
D) Compute the rate per unit of each cost allocation base used to allocate fixed overhead costs to output produced. 
E) Identify the fixed overhead costs associated with each cost allocation base. 
A) Choose the period to use for the budget. 
B) Select the cut-off parameters of the fixed overhead cost allocations. 
C) Select the cost-allocation bases to use in allocating fixed overhead costs to output produced. 
D) Compute the rate per unit of each cost allocation base used to allocate fixed overhead costs to output produced. 
E) Identify the fixed overhead costs associated with each cost allocation base.

Question 2

Why are detailed variance analyses common in larger businesses?

Accepted Answer

It is difficult for managers to keep tra

Question 3

Why is a practice of calculating variances valuable to managers when there are trends in the market?

Accepted Answer

Variances operate as an early

Question 4

To indicate revenues,an F indicates ________.

Accepted Answer

A) actual costs are less than budgeted costs. 
B) actual revenues exceed budgeted revenues. 
C) operating income is decreasing relative to the budgeted amount. 
D) actual costs are decreasing relative to the budgeted amount. 
E) variable costs are decreasing relative to operating income. 
A) actual costs are less than budgeted costs. 
B) actual revenues exceed budgeted revenues. 
C) operating income is decreasing relative to the budgeted amount. 
D) actual costs are decreasing relative to the budgeted amount. 
E) variable costs are decreasing relative to operating income.

Question 5

Standards are usually expressed on a per-unit basis.

Accepted Answer

A) True 
 B)False

Question 6

Micro-Niche,a mobile home manufacturer,has a sales volume variance of $600,000,U,and a flexible-budget variance of $345,000,F.
Required
Compute the static-budget variance and identify whether the variance is favorable,F,or unfavorable,U.

Accepted Answer

A) $350,000 F 
B) $245,000 U 
C) $255,000 F 
D) $245,000 F 
E) $255,000 U 
A) $350,000 F 
B) $245,000 U 
C) $255,000 F 
D) $245,000 F 
E) $255,000 U

Question 7

How does variance analysis relate to the five-step decision-making process?

Accepted Answer

Variance analysis allows managers to eva

Question 8

The following data was gathered for Anu-U,an electronic commercial hair dryer manufacturer:
 
Required
Compute the static-budget variance and identify whether the variance is favorable,F,or unfavorable,U.

Accepted Answer

A) $75,000 U variance 
B) $89,000 F variance 
C) $64,000 U variance 
D) $97,000 F variance 
E) $58,000 U variance 
A) $75,000 U variance 
B) $89,000 F variance 
C) $64,000 U variance 
D) $97,000 F variance 
E) $58,000 U variance

Question 9

An overemphasis on performance evaluation may also cause managers to take actions to achieve the budget and avoid an unfavorable variance.

Accepted Answer

A) True 
 B)False

Question 10

Greenhouse Corporation used the following data to evaluate their current operating system.The company sells items for $12 each and had used a budgeted selling price of $13 per unit.
 
Required
Compute the static-budget variance of revenues,the static-budget variance of variable costs,and the static-budget variance of operating income.

Accepted Answer

A) $200,000 F;$8,000 F;$258,000 F 
B) $210,000 U;$8,100 U;$259,000 U 
C) $205,000 F;$8,500 F;$260,000 F 
D) $210,000 U;$9,250 U;$261,000 F 
E) $249,000 U;$9,750 U;$262,000 U 
A) $200,000 F;$8,000 F;$258,000 F 
B) $210,000 U;$8,100 U;$259,000 U 
C) $205,000 F;$8,500 F;$260,000 F 
D) $210,000 U;$9,250 U;$261,000 F 
E) $249,000 U;$9,750 U;$262,000 U

Question 11

Which of the following is true about the variable-analysis approach?

Accepted Answer

A) Detailed variance analyses are common in small businesses. 
B) Managers use an increased detailed analysis that separates the variable overhead and fixed overhead into a combined overhead. 
C) Managers use a less detailed analysis that combines the variable overhead and fixed overhead into a single overhead. 
D) Managers find more value in doing additional measurements required for comprehensive variance analyses. 
E) The detailed analysis help managers identify and focus only on the areas that are operating as expected. 
A) Detailed variance analyses are common in small businesses. 
B) Managers use an increased detailed analysis that separates the variable overhead and fixed overhead into a combined overhead. 
C) Managers use a less detailed analysis that combines the variable overhead and fixed overhead into a single overhead. 
D) Managers find more value in doing additional measurements required for comprehensive variance analyses. 
E) The detailed analysis help managers identify and focus only on the areas that are operating as expected.

Question 12

Fixed overhead costs are,by definition,a lump-sum of costs that remains unchanged in total for a given period.

Accepted Answer

A) True 
 B)False

Question 13

Dynamo Building Supply Company's management is calculating the variable overhead flexible-budget variance for 2012.The actual variable overhead costs incurred amounted to $245,000 while the flexible budgeted amount was $230,000.
Required
Compute the variable overhead flexible-budget variance for Dynamo Building Supply Company and identify whether the variance is favorable,F,or unfavorable,U.

Accepted Answer

A) $575,000;U 
B) $15,000;F 
C) $15,000;U 
D) $575,000;F 
E) $56,350;U 
A) $575,000;U 
B) $15,000;F 
C) $15,000;U 
D) $575,000;F 
E) $56,350;U

Question 14

To make sure that managers interpret variances correctly and make appropriate decisions based on them,managers need to recognize that ________.

Accepted Answer

A) variances are active indicators 
B) variances are easily miscalculated 
C) variances can have multiple causes 
D) variances are not accurate indicators 
E) decisions should not be made based on variances 
A) variances are active indicators 
B) variances are easily miscalculated 
C) variances can have multiple causes 
D) variances are not accurate indicators 
E) decisions should not be made based on variances

Question 15

Effective planning for fixed overhead costs is similar to effective planning for ________.

Accepted Answer

A) variable overhead costs 
B) production operations 
C) product differentiation 
D) performance improvement 
E) acquiring new customers 
A) variable overhead costs 
B) production operations 
C) product differentiation 
D) performance improvement 
E) acquiring new customers

Question 16

Unfavorable variances are also referred to as ________.

Accepted Answer

A) favorable variances 
B) adverse variances 
C) bottom-out variances 
D) substandard variances 
E) dissatisfactory variances 
A) favorable variances 
B) adverse variances 
C) bottom-out variances 
D) substandard variances 
E) dissatisfactory variances

Question 17

Paige's Oasis Supplies,a backyard and garden super-store,has retained an accountant to assess the variances in their budget for more efficient ordering and sale practices.The accountant compiled the following data:
 
Required
Compute the actual amount spent on Sod 1,Sod 2,and Sod 3.

Accepted Answer

A) $1,300,U;$1,140,F;$1,450,U 
B) $1,100,F;$1,270,U;$1,650,F 
C) $1,360,U;$1,040,F;$1,350,F 
D) $1,200,U;$1,000,F;$1,600,F 
E) $1,850,U;$1,700,U;$1,988,U 
A) $1,300,U;$1,140,F;$1,450,U 
B) $1,100,F;$1,270,U;$1,650,F 
C) $1,360,U;$1,040,F;$1,350,F 
D) $1,200,U;$1,000,F;$1,600,F 
E) $1,850,U;$1,700,U;$1,988,U

Question 18

Scribe Paper Production Company's operational manager budgeted fixed overhead cost to be $450,000 for the month of February.The actual amount of fixed overhead costs for February turned out to be $480,000.
Required
Compute the fixed overhead flexible-budget variance for Scribe Paper Company,and identify whether the data indicates a favorable F,or unfavorable,U,variance.

Accepted Answer

A) $40,000;U 
B) $30,000;F 
C) $930,000;F 
D) $40,000;F 
E) $30,000;U 
A) $40,000;U 
B) $30,000;F 
C) $930,000;F 
D) $40,000;F 
E) $30,000;U

Question 19

Why is there not an efficiency variance for fixed overhead costs?

Accepted Answer

There is no efficiency variance for fixe

Question 20

The managerial accountant at Niagara Fishing Company needs to estimate the expected revenues in 2014.The company purchased materials at $1,750,000 to produce 25,000 fishing poles.The price per fishing pole is estimated to be $260.
Required
Compute the expected revenues.

Accepted Answer

A) $4,860,000 
B) $5,800,000 
C) $3,200,000 
D) $6,500,000 
E) $11,590,000 
A) $4,860,000 
B) $5,800,000 
C) $3,200,000 
D) $6,500,000 
E) $11,590,000

Which of the following steps is not one of the four steps of developing a budgeted fixed overhead rate?

Why are detailed variance analyses common in larger businesses?

Why is a practice of calculating variances valuable to managers when there are trends in the market?

To indicate revenues,an F indicates ________.

Standards are usually expressed on a per-unit basis.

Micro-Niche,a mobile home manufacturer,has a sales volume variance of $600,000,U,and a flexible-budget variance of $345,000,F. Required Compute the static-budget variance and identify whether the variance is favorable,F,or unfavorable,U.

How does variance analysis relate to the five-step decision-making process?

The following data was gathered for Anu-U,an electronic commercial hair dryer manufacturer: Required Compute the static-budget variance and identify whether the variance is favorable,F,or unfavorable,U.

An overemphasis on performance evaluation may also cause managers to take actions to achieve the budget and avoid an unfavorable variance.

Which of the following is true about the variable-analysis approach?

Fixed overhead costs are,by definition,a lump-sum of costs that remains unchanged in total for a given period.

To make sure that managers interpret variances correctly and make appropriate decisions based on them,managers need to recognize that ________.

Effective planning for fixed overhead costs is similar to effective planning for ________.

Unfavorable variances are also referred to as ________.

Paige's Oasis Supplies,a backyard and garden super-store,has retained an accountant to assess the variances in their budget for more efficient ordering and sale practices.The accountant compiled the following data: Required Compute the actual amount spent on Sod 1,Sod 2,and Sod 3.

Why is there not an efficiency variance for fixed overhead costs?

The managerial accountant at Niagara Fishing Company needs to estimate the expected revenues in 2014.The company purchased materials at $1,750,000 to produce 25,000 fishing poles.The price per fishing pole is estimated to be $260. Required Compute the expected revenues.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Performance Measurement and Compensation

Filters

Exam 13: Flexible Budgets, cost Variances, and Management Control

Which of the following steps is not one of the four steps of developing a budgeted fixed overhead rate?

Why are detailed variance analyses common in larger businesses?

Why is a practice of calculating variances valuable to managers when there are trends in the market?

To indicate revenues,an F indicates ________.

Standards are usually expressed on a per-unit basis.

Micro-Niche,a mobile home manufacturer,has a sales volume variance of $600,000,U,and a flexible-budget variance of $345,000,F. Required Compute the static-budget variance and identify whether the variance is favorable,F,or unfavorable,U.

How does variance analysis relate to the five-step decision-making process?

The following data was gathered for Anu-U,an electronic commercial hair dryer manufacturer: Required Compute the static-budget variance and identify whether the variance is favorable,F,or unfavorable,U.

An overemphasis on performance evaluation may also cause managers to take actions to achieve the budget and avoid an unfavorable variance.

Which of the following is true about the variable-analysis approach?

Fixed overhead costs are,by definition,a lump-sum of costs that remains unchanged in total for a given period.

To make sure that managers interpret variances correctly and make appropriate decisions based on them,managers need to recognize that ________.

Effective planning for fixed overhead costs is similar to effective planning for ________.

Unfavorable variances are also referred to as ________.

Paige's Oasis Supplies,a backyard and garden super-store,has retained an accountant to assess the variances in their budget for more efficient ordering and sale practices.The accountant compiled the following data: Required Compute the actual amount spent on Sod 1,Sod 2,and Sod 3.

Why is there not an efficiency variance for fixed overhead costs?

The managerial accountant at Niagara Fishing Company needs to estimate the expected revenues in 2014.The company purchased materials at $1,750,000 to produce 25,000 fishing poles.The price per fishing pole is estimated to be $260. Required Compute the expected revenues.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Performance Measurement and Compensation

Filters