Question 1

Variable-manufacturing overhead costs were ________ for actual output.

Accepted Answer

A) higher than expected 
B) lower than expected 
C) the same as expected 
D) indeterminable 
A) higher than expected 
B) lower than expected 
C) the same as expected 
D) indeterminable B

Question 2

John's Football Manufacturing Company reported:
$\begin{array}{ll}
\text { Actual fixed overhead } & \$ 800000 \
\text { Fixed manufacturing overhead spend ing variance } & \$ 20000 \text { favourable } \
\text { Fixed manufacturing production-volume variance } & \$ 30000 \text { unfavourable }
\end{array}$

To isolate these variances at the end of the accounting period,John would debit Fixed Manufacturing Overhead Allocated for:

Accepted Answer

A) $780 000 
B) $790 000 
C) $800 000 
D) $810 000 
A) $780 000 
B) $790 000 
C) $800 000 
D) $810 000 B

Question 3

Answer the following questions using the information below:
 $\begin{array}{lrcc}
&&\text { Production- }\
\text { Variances }&\text { Spending }&\text { Efficiency }&\text { Volume }\
\text { Variable manufacturing overhead } & \$ 4500 \mathrm{~F} & \$ 15000 \mathrm{U} & \text { (B) } \
\text { Fixed manufacturing overhead } & \$ 10000 \mathrm{U} & (\mathrm{A}) & \$ 40000 \mathrm{U}
\end{array}$

-In the above chart,the amounts for (A)and (B),respectively,are:

Accepted Answer

A) Zero;$55 000 U 
B) Zero;Zero 
C) $10 500 U;$55 000 U 
D) $10 500 U;Zero 
A) Zero;$55 000 U 
B) Zero;Zero 
C) $10 500 U;$55 000 U 
D) $10 500 U;Zero B

Question 4

Answer the following questions using the information below:
Norman & Appleby Corporation manufactured 15 000 golf bags during March.The fixed overhead cost-allocation rate is $20.00 per machine-hour.The following fixed overhead data pertain to March:
 $$\begin{array} { l r r } 
& \text { Actual } & \text { Static Budget } \
\text { Production } & 15000 \text { units } & 18000 \text { units } \
\text { Machine-hours } & 7650 \text { hours } & 9000 \text { hours } \
\text { Fixed overhead cost for March } & \$ 122000 & \$ 120000
\end{array}$$
-What is the fixed overhead production-volume variance?

Accepted Answer

A) $27 000 favourable 
B) $33 000 unfavourable 
C) $30 000 unfavourable 
D) $3000 unfavourable 
A) $27 000 favourable 
B) $33 000 unfavourable 
C) $30 000 unfavourable 
D) $3000 unfavourable

Question 5

Answer the following questions using the information below:
Harvey Corporation manufactured 1500 chairs during June.The following variable overhead data pertain to June:
 $\begin{array}{ll}
\text { Budgeted variable overhead cost per unit } & \$ 12.00 \
\text { Actual variable manufacturing overhead cost } & \$ 20800 \
\text { Flexible-bud get amount for variable manufacturing overhead } & \$ 18000 \
\text { Variable manufacturing overhead efficiency variance } & \$ 360 \text { unfavourable }
\end{array}$

-What is the variable overhead flexible-budget variance?

Accepted Answer

A) $2800 unfavourable 
B) $2800 favourable 
C) $1560 favourable 
D) $360 unfavourable 
A) $2800 unfavourable 
B) $2800 favourable 
C) $1560 favourable 
D) $360 unfavourable

Question 6

A $5000 unfavourable flexible-budget variance indicates that:

Accepted Answer

A) the standard variable manufacturing overhead exceeded the flexible-budget amount by $5000. 
B) the actual variable manufacturing overhead exceeded the flexible-budget amount by $5000. 
C) the flexible-budget amount exceeded actual variable manufacturing overhead by $5000. 
D) the flexible-budget amount exceeded standard variable manufacturing overhead by $5000. 
A) the standard variable manufacturing overhead exceeded the flexible-budget amount by $5000. 
B) the actual variable manufacturing overhead exceeded the flexible-budget amount by $5000. 
C) the flexible-budget amount exceeded actual variable manufacturing overhead by $5000. 
D) the flexible-budget amount exceeded standard variable manufacturing overhead by $5000.

Question 7

Swandow Pillow Company manufactures pillows.The 2018 operating budget is based on production of 40 000 pillows with 0.5 machine-hour allowed per pillow.Variable manufacturing overhead is anticipated to be $220 000.Actual production for 2018 was 36 000 pillows using 19 000 machine-hours.Actual variable costs were $10 per machine-hour.
Required:
Calculate the variable overhead spending and efficiency variances.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

Budgeted variable overhead per hour = $2

Question 8

If the production planners set the budgeted machine hours standards too tight,one could anticipate there would be an unfavourable variable overhead efficiency variance.

Accepted Answer

A) True 
 B)False

Question 9

A favourable variable overhead spending variance is not always desirable.

Accepted Answer

A) True 
 B)False

Question 10

Managers of small businesses understand their operations better based on personal observations and non-financial measures.

Accepted Answer

A) True 
 B)False

Question 11

The term cost-allocation base can be used interchangeably with __________ rate when dealing with indirect costs.

Accepted Answer

A) cost-driver 
B) activity 
C) allocation 
D) target 
A) cost-driver 
B) activity 
C) allocation 
D) target

Question 12

A favourable production-volume variance arises when manufacturing capacity planned for is not used.

Accepted Answer

A) True 
 B)False

Question 13

What are the arguments for prorating a production-volume variance that has been deemed to be material among work-in-process,finished goods,cost and cost of goods sold as opposed to writing it all off to cost of goods sold?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

If variances are always written off to c

Question 14

Answer the following questions using the information below:
Wagga Wagga Corporation manufactured 30 000 eskies during September.The overhead cost-allocation base is $12.50 per machine-hour.The following variable overhead data pertain to September:
 $$\begin{array} { l r r } 
& \text { Actual } & \text { Budgeted } \
\text { Production } & 30000 \text { units } & 24000 \text { units } \
\text { Machine-hours } & 15000 \text { hours } & 10800 \text { hours } \
\text { Variable overhead cost per machine-hour: } & \$ 12.00 & \$ 12.50
\end{array}$$
-What is the flexible-budget amount?

Accepted Answer

A) $121 500 
B) $151 875 
C) $180 000 
D) $168 750 
A) $121 500 
B) $151 875 
C) $180 000 
D) $168 750

Question 15

Answer the following questions using the information below:
Hobart Corporation manufactured 20 000 heaters during November.The overhead cost-allocation base is $15.75 per machine-hour.The following variable overhead data pertain to November:
 $$\begin{array} { l r r } 
& \text { Actual } & \text { Budgeted } \
\text { Production } & 20000 \text { units } & 22000 \text { units } \
\text { Machine-hours } & 7875 \text { hours } & 9000 \text { hours } \
\text { Variable overhead cost per machine-hour: } & \$ 15.50 & \$ 15.75
\end{array}$$
-What is the flexible-budget amount?

Accepted Answer

A) $124 031.30 
B) $128 863.64 
C) $139 500.00 
D) $124 000.00 
A) $124 031.30 
B) $128 863.64 
C) $139 500.00 
D) $124 000.00

Question 16

Answer the following questions using the information below:
Chappell Brothers Corporation manufactures promotional cricket hoodies and uses budgeted machine-hours to allocate variable manufacturing overhead.The following information pertains to the company's manufacturing overhead data:
 $$\begin{array} { l r } 
\text { Budgeted output units } & 25000 \text { units } \
\text { Budgeted machine-hours } & 30000 \text { hours } \
\text { Budgeted variable manufacturing overhead costs for } 25000 \text { units } & \$ 360000 \
& \
\text { Actual output units produced } & 20000 \text { units } \
\text { Actual machine-hours used } & 28000 \text { hours } \
\text { Actual variable manufacturing overhead costs } & \$ 342000
\end{array}$$
-What is the flexible-budget variance for variable manufacturing overhead?

Accepted Answer

A) zero 
B) $54 000 unfavourable 
C) $54 000 favourable 
D) None of these answers are correct. 
A) zero 
B) $54 000 unfavourable 
C) $54 000 favourable 
D) None of these answers are correct.

Question 17

Which of the following is not included in the effective planning of variable overheads?

Accepted Answer

A) Choosing the appropriate level of capacity 
B) Redesigning products to use fewer resources 
C) Eliminating nonvalue-adding costs 
D) Redesigning the plant layout for more efficient processing 
A) Choosing the appropriate level of capacity 
B) Redesigning products to use fewer resources 
C) Eliminating nonvalue-adding costs 
D) Redesigning the plant layout for more efficient processing

Question 18

In the long run,the amount of labour-hours used is the only cost driver of fixed overhead costs.

Accepted Answer

A) True 
 B)False

Question 19

Why is a favourable variable overhead spending variance not always desirable?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The variable overhead spending variance

Question 20

A non-financial measure of performance evaluation is:

Accepted Answer

A) increased sales. 
B) energy used per machine-hour. 
C) reducing distribution costs. 
D) All of these answers are correct. 
A) increased sales. 
B) energy used per machine-hour. 
C) reducing distribution costs. 
D) All of these answers are correct.

Variable-manufacturing overhead costs were ________ for actual output.

Answer the following questions using the information below: Production- Variances Spending Efficiency Volume Variable manufacturing overhead \ 4500 \ 15000 (B) Fixed manufacturing overhead \ 10000 () \ 40000 -In the above chart,the amounts for (A)and (B),respectively,are:

A $5000 unfavourable flexible-budget variance indicates that:

If the production planners set the budgeted machine hours standards too tight,one could anticipate there would be an unfavourable variable overhead efficiency variance.

A favourable variable overhead spending variance is not always desirable.

Managers of small businesses understand their operations better based on personal observations and non-financial measures.

The term cost-allocation base can be used interchangeably with __________ rate when dealing with indirect costs.

A favourable production-volume variance arises when manufacturing capacity planned for is not used.

What are the arguments for prorating a production-volume variance that has been deemed to be material among work-in-process,finished goods,cost and cost of goods sold as opposed to writing it all off to cost of goods sold? _ _

Which of the following is not included in the effective planning of variable overheads?

In the long run,the amount of labour-hours used is the only cost driver of fixed overhead costs.

Why is a favourable variable overhead spending variance not always desirable? _ _

A non-financial measure of performance evaluation is:

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

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

Measuring and Reporting Sustainability

Filters

Exam 13: Flexible Budgets, Overhead Cost Variances and Management Control

Variable-manufacturing overhead costs were ________ for actual output.

Answer the following questions using the information below: Production- Variances Spending Efficiency Volume Variable manufacturing overhead \ 4500 \ 15000 (B) Fixed manufacturing overhead \ 10000 () \ 40000 -In the above chart,the amounts for (A)and (B),respectively,are:

A $5000 unfavourable flexible-budget variance indicates that:

If the production planners set the budgeted machine hours standards too tight,one could anticipate there would be an unfavourable variable overhead efficiency variance.

A favourable variable overhead spending variance is not always desirable.

Managers of small businesses understand their operations better based on personal observations and non-financial measures.

The term cost-allocation base can be used interchangeably with __________ rate when dealing with indirect costs.

A favourable production-volume variance arises when manufacturing capacity planned for is not used.

Which of the following is not included in the effective planning of variable overheads?

In the long run,the amount of labour-hours used is the only cost driver of fixed overhead costs.

Why is a favourable variable overhead spending variance not always desirable? _____________________________________________________________________________________________ _____________________________________________________________________________________________

A non-financial measure of performance evaluation is:

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Pricing and Customer Profitability

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

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

Measuring and Reporting Sustainability

Filters

Why is a favourable variable overhead spending variance not always desirable? _ _