Question 1

The production volume variance measures the difference between applied and budgeted fixed overhead.

Accepted Answer

A) True 
 B)False

Question 2

Oklahoma Company has obtained the following data for the first year of operations:
   Required: 
A)Using variable costing,prepare an income statement for the first year of operations.Assume budgeted fixed costs were equal to actual fixed costs.
B)Using absorption costing,prepare an income statement for the first year of operations.Assume budgeted fixed costs were equal to actual fixed costs.

Accepted Answer

A) @#IMG-DLM& Variab

Question 3

Dorglass Incorporated reported the following information about the production and sale of its only product during the first month of operations:   Under variable costing,the product cost per unit is ________.

Accepted Answer

A) $160 
B) $170 
C) $200 
D) $225 
A) $160 
B) $170 
C) $200 
D) $225

Question 4

Wrobel Industries Inc.reported the following information about the production and sale of its only product during the first month of operations:   Under variable costing,what is the cost of the finished goods ending inventory?

Accepted Answer

A) $63,000 
B) $72,000 
C) $126,000 
D) $144,000 
A) $63,000 
B) $72,000 
C) $126,000 
D) $144,000

Question 5

The following information was gathered for Elliott Company:
   Required: 
A)Compute the budgeted factory overhead rate.
B)Compute the factory overhead applied.
C)Compute the amount of underapplied or overapplied factory overhead.

Accepted Answer

A)$562,500/75,000 = $7.50 per

Question 6

When the actual production volume exceeds the expected production volume,the production volume variance is favorable.

Accepted Answer

A) True 
 B)False

Question 7

The only difference between the net income between variable costing and absorption costing is the treatment of ________.

Accepted Answer

A) variable selling costs 
B) variable administrative costs 
C) fixed selling costs 
D) fixed manufacturing overhead costs 
A) variable selling costs 
B) variable administrative costs 
C) fixed selling costs 
D) fixed manufacturing overhead costs

Question 8

Fixed manufacturing overhead costs are excluded from product costs under absorption costing.

Accepted Answer

A) True 
 B)False

Question 9

In the immediate write-off approach to overhead variances,overapplied overhead is regarded as a(n)________.

Accepted Answer

A) addition to the cost of inventory 
B) reduction to the cost of inventory 
C) increase in cost of goods sold 
D) decrease in cost of goods sold 
A) addition to the cost of inventory 
B) reduction to the cost of inventory 
C) increase in cost of goods sold 
D) decrease in cost of goods sold

Question 10

Underapplied fixed factory overhead can be explained by ________ variance and ________ variance.

Accepted Answer

A) production volume; fixed overhead efficiency 
B) fixed overhead spending; fixed overhead efficiency 
C) fixed overhead spending; fixed overhead flexible budget 
D) fixed overhead spending; production volume 
A) production volume; fixed overhead efficiency 
B) fixed overhead spending; fixed overhead efficiency 
C) fixed overhead spending; fixed overhead flexible budget 
D) fixed overhead spending; production volume

Question 11

Indians Company had the following information:   Assume direct labor hours are the cost driver for factory overhead costs.The budgeted factory overhead rate is ________.

Accepted Answer

A) $27.27 per direct labor hour 
B) $27.61 per direct labor hour 
C) $27.77 per direct labor hour 
D) $29.03 per direct labor hour 
A) $27.27 per direct labor hour 
B) $27.61 per direct labor hour 
C) $27.77 per direct labor hour 
D) $29.03 per direct labor hour

Question 12

Panthers Company reported the following information about the production and sale of its only product during the first month of operations:   Under absorption costing,what is the cost of the ending inventory of finished goods?

Accepted Answer

A) $78,000 
B) $96,000 
C) $120,000 
D) $135,000 
A) $78,000 
B) $96,000 
C) $120,000 
D) $135,000

Question 13

Underapplied and overapplied fixed overhead has two components that include a production-volume variance and a fixed overhead flexible budget variance.

Accepted Answer

A) True 
 B)False

Question 14

The following information was compiled by Gorgeous Incorporated:   What is the fixed overhead production volume variance?

Accepted Answer

A) $15,000 Favorable 
B) $15,000 Unfavorable 
C) $20,000 Favorable 
D) $20,000 Unfavorable 
A) $15,000 Favorable 
B) $15,000 Unfavorable 
C) $20,000 Favorable 
D) $20,000 Unfavorable

Question 15

A direct-costing income statement has a subtotal for ________ whereas an absorption-costing income statement has a subtotal for ________.

Accepted Answer

A) gross profit; contribution margin 
B) contribution margin; gross profit 
C) variable expenses; fixed expenses 
D) fixed expenses; variable expenses 
A) gross profit; contribution margin 
B) contribution margin; gross profit 
C) variable expenses; fixed expenses 
D) fixed expenses; variable expenses

Question 16

If a department identifies more than one cost driver for overhead costs,the department ideally should ________.

Accepted Answer

A) put 80 percent of the cost into one pool and 20 percent into a second pool 
B) select a single cost driver 
C) allocate 80 percent of the costs with 20% of the cost drivers 
D) create as many cost pools as there are cost drivers 
A) put 80 percent of the cost into one pool and 20 percent into a second pool 
B) select a single cost driver 
C) allocate 80 percent of the costs with 20% of the cost drivers 
D) create as many cost pools as there are cost drivers

Question 17

Chester Company reported the following information about the production and sale of its only product during the first month of operations:   Under absorption costing,what is the operating income or loss?

Accepted Answer

A) $(6,000) 
B) $(70,000) 
C) $10,000 
D) $20,000 
A) $(6,000) 
B) $(70,000) 
C) $10,000 
D) $20,000

Question 18

Yesteryear Industries Inc.reported the following information about the production and sale of its only product during the first month of operations:   The company sold one-half of the units it produced.Under absorption costing,what is the cost of goods sold?

Accepted Answer

A) $30,000 
B) $42,000 
C) $58,000 
D) $78,000 
A) $30,000 
B) $42,000 
C) $58,000 
D) $78,000

Question 19

BOTH variable-costing and absorption-costing include ________ as product costs.

Accepted Answer

A) indirect manufacturing costs 
B) variable selling and administrative expenses 
C) fixed selling and administrative expenses 
D) direct manufacturing costs 
A) indirect manufacturing costs 
B) variable selling and administrative expenses 
C) fixed selling and administrative expenses 
D) direct manufacturing costs

Question 20

In an absorption-costing income statement,revenue less variable manufacturing costs is equal to the gross margin.

Accepted Answer

A) True 
 B)False

The production volume variance measures the difference between applied and budgeted fixed overhead.

Dorglass Incorporated reported the following information about the production and sale of its only product during the first month of operations: Under variable costing,the product cost per unit is ________.

Wrobel Industries Inc.reported the following information about the production and sale of its only product during the first month of operations: Under variable costing,what is the cost of the finished goods ending inventory?

The following information was gathered for Elliott Company: Required: A)Compute the budgeted factory overhead rate. B)Compute the factory overhead applied. C)Compute the amount of underapplied or overapplied factory overhead.

When the actual production volume exceeds the expected production volume,the production volume variance is favorable.

The only difference between the net income between variable costing and absorption costing is the treatment of ________.

Fixed manufacturing overhead costs are excluded from product costs under absorption costing.

In the immediate write-off approach to overhead variances,overapplied overhead is regarded as a(n)________.

Underapplied fixed factory overhead can be explained by variance and variance.

Indians Company had the following information: Assume direct labor hours are the cost driver for factory overhead costs.The budgeted factory overhead rate is ________.

Panthers Company reported the following information about the production and sale of its only product during the first month of operations: Under absorption costing,what is the cost of the ending inventory of finished goods?

Underapplied and overapplied fixed overhead has two components that include a production-volume variance and a fixed overhead flexible budget variance.

The following information was compiled by Gorgeous Incorporated: What is the fixed overhead production volume variance?

A direct-costing income statement has a subtotal for whereas an absorption-costing income statement has a subtotal for .

If a department identifies more than one cost driver for overhead costs,the department ideally should ________.

Chester Company reported the following information about the production and sale of its only product during the first month of operations: Under absorption costing,what is the operating income or loss?

Yesteryear Industries Inc.reported the following information about the production and sale of its only product during the first month of operations: The company sold one-half of the units it produced.Under absorption costing,what is the cost of goods sold?

BOTH variable-costing and absorption-costing include ________ as product costs.

In an absorption-costing income statement,revenue less variable manufacturing costs is equal to the gross margin.

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 13: Accounting for Overhead Costs

The production volume variance measures the difference between applied and budgeted fixed overhead.

Dorglass Incorporated reported the following information about the production and sale of its only product during the first month of operations: Under variable costing,the product cost per unit is ________.

Wrobel Industries Inc.reported the following information about the production and sale of its only product during the first month of operations: Under variable costing,what is the cost of the finished goods ending inventory?

The following information was gathered for Elliott Company: Required: A)Compute the budgeted factory overhead rate. B)Compute the factory overhead applied. C)Compute the amount of underapplied or overapplied factory overhead.

When the actual production volume exceeds the expected production volume,the production volume variance is favorable.

The only difference between the net income between variable costing and absorption costing is the treatment of ________.

Fixed manufacturing overhead costs are excluded from product costs under absorption costing.

In the immediate write-off approach to overhead variances,overapplied overhead is regarded as a(n)________.

Underapplied fixed factory overhead can be explained by ________ variance and ________ variance.

Indians Company had the following information: Assume direct labor hours are the cost driver for factory overhead costs.The budgeted factory overhead rate is ________.

Panthers Company reported the following information about the production and sale of its only product during the first month of operations: Under absorption costing,what is the cost of the ending inventory of finished goods?

Underapplied and overapplied fixed overhead has two components that include a production-volume variance and a fixed overhead flexible budget variance.

The following information was compiled by Gorgeous Incorporated: What is the fixed overhead production volume variance?

A direct-costing income statement has a subtotal for ________ whereas an absorption-costing income statement has a subtotal for ________.

If a department identifies more than one cost driver for overhead costs,the department ideally should ________.

Chester Company reported the following information about the production and sale of its only product during the first month of operations: Under absorption costing,what is the operating income or loss?

Yesteryear Industries Inc.reported the following information about the production and sale of its only product during the first month of operations: The company sold one-half of the units it produced.Under absorption costing,what is the cost of goods sold?

BOTH variable-costing and absorption-costing include ________ as product costs.

In an absorption-costing income statement,revenue less variable manufacturing costs is equal to the gross margin.

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

Underapplied fixed factory overhead can be explained by variance and variance.

A direct-costing income statement has a subtotal for whereas an absorption-costing income statement has a subtotal for .