Answer the following questions using the information below: Melbourne Corporation manufactured 57 000 door jambs during September.The fixed-overhead cost-allocation rate is $50.00 per machine-hour.The following fixed overhead data pertain to September: \[\begin{array} { l r r } & \text { Actual } & \text { Static Budget } \\ \text { Production } & 57000 \text { units } & 60000 \text { units } \\ \text { Machine-hours } & 985 \text { hours } & 1200 \text { hours } \\ \text { Fixed overhead costs for September } & \$ 54300 & \$ 60000 \end{array}\] -What is the flexible-budget amount?

A) $54 300 B) $51 750 C) $60 000 D) $100 000 A) $54 300 B) $51 750 C) $60 000 D) $100 000

Answer the following questions using the information below: Melbourne Corporation manufactured 57 000 door jambs during September.The fixed-overhead cost-allocation rate is $50.00 per machine-hour.The following fixed overhead data pertain to September: \[\begin{array} { l r r } & \text { Actual } & \text { Static Budget } \\ \text { Production } & 57000 \text { units } & 60000 \text { units } \\ \text { Machine-hours } & 985 \text { hours } & 1200 \text { hours } \\ \text { Fixed overhead costs for September } & \$ 54300 & \$ 60000 \end{array}\] -What is the amount of fixed overhead allocated to production?

A) $57 000 B) $54 300 C) $60 000 D) $100 000 A) $57 000 B) $54 300 C) $60 000 D) $100 000

Answer the following questions using the information below: Healesville Animal Products manufactured 32 000 horse grooming kits during 2018.The fixed-overhead cost-allocation rate is $20.00 per machine-hour.The following fixed overhead data pertain to 2018: \[\begin{array} { l r r } & \text { Actual } & \text { Static Budget } \\ \text { Production } & 32000 \text { units } & 30000 \text { units } \\ \text { Machine-hours } & 6100 \text { hours } & 6000 \text { hours } \\ \text { Fixed overhead costs for } 2018 & \$ 123000 & \$ 120000 \end{array}\] -What is the amount of fixed overhead allocated to production?

A) $120 000 B) $122 000 C) $123 000 D) $128 000 A) $120 000 B) $122 000 C) $123 000 D) $128 000

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

Fixed costs are usually included in flexible budgets,but they remain the same total amount within the relevant range of activity regardless of the output level chosen to 'flex' the variable costs and revenues.

(True/False)

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Question 101

Answer the following questions using the information below: Melbourne Corporation manufactured 57 000 door jambs during September.The fixed-overhead cost-allocation rate is $50.00 per machine-hour.The following fixed overhead data pertain to September: Actual Static Budget Production 57000 units 60000 units Machine-hours 985 hours 1200 hours Fixed overhead costs for September \ 54300 \ 60000 -What is the flexible-budget amount?

(Multiple Choice)

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Question 102

Alvarado Company made the following journal entry: Variable Manufacturing Overhead Allocated 100000 Variable Manufacturing Overhead Efficiency Variance 30000 Variable Manufacturing Overhead Control 125000 Variable Manufacturing Overhead Spending Variance 5000

(Multiple Choice)

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(65)

Question 103

Caution is appropriate before interpreting the production-volume variance as a measure of the economic cost of unused capacity.

(True/False)

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Question 104

Managers can reduce ______________ costs by,say,selling equipment or laying off employees.

(Multiple Choice)

5.0/5

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Question 105

Managers consider variance analysis of all variable overhead costs when making such decisions and when managing costs.

(True/False)

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Question 106

_______________ costs never have any unused capacity.

(Multiple Choice)

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Question 107

Variance information regarding non-manufacturing costs can be used to:

(Multiple Choice)

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Question 108

To plan variable overhead costs effectively for a product or service,managers must eliminate the activities that do not add __________ to the product or service.

(Multiple Choice)

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Question 109

When machine-hours are used as an overhead cost-allocation base,the MOST likely cause of a favourable variable overhead spending variance is:

(Multiple Choice)

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Question 110

Answer the following questions using the information below: Melbourne Corporation manufactured 57 000 door jambs during September.The fixed-overhead cost-allocation rate is $50.00 per machine-hour.The following fixed overhead data pertain to September: Actual Static Budget Production 57000 units 60000 units Machine-hours 985 hours 1200 hours Fixed overhead costs for September \ 54300 \ 60000 -What is the amount of fixed overhead allocated to production?

(Multiple Choice)

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Question 111

Which type of costs are overhead costs of products,and consist of some costs that are variable and some that are fixed with respect to the number of set-up hours?

(Multiple Choice)

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Question 112

At the end of the financial year,the variance accounts are written off to cost of goods sold if immaterial in amount.

(True/False)

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Question 113

The variable overhead efficiency variance is computed in a different way than the efficiency variance for direct-cost items.

(True/False)

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(70)

Question 114

The variable overhead flexible-budget variance measures the difference between:

(Multiple Choice)

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(80)

Question 115

Fixed overhead has no efficiency variance.

(True/False)

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Question 116

Kim Hughes 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 84 000 units a month,although it generally produces only 74 000 units.However,in any given month the actual production is probably something other than 74 000. Required: a.Does the production-volume overhead variance measure the difference between the 84 000 and 74 000,or the difference between the 74 000 and the actual monthly production? Explain. b.What advice can you provide the managers that will help them interpret the production-volume overhead variances? _ _

(Essay)

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Question 117

Under activity-based costing,the flexible-budget amount equals the static-budget amount for fixed overhead costs.

(True/False)

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Question 118

An unfavourable fixed set-up overhead spending variance could be due to higher lease costs of new set-up equipment.

(True/False)

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Question 119

Answer the following questions using the information below: Healesville Animal Products manufactured 32 000 horse grooming kits during 2018.The fixed-overhead cost-allocation rate is $20.00 per machine-hour.The following fixed overhead data pertain to 2018: Actual Static Budget Production 32000 units 30000 units Machine-hours 6100 hours 6000 hours Fixed overhead costs for 2018 \ 123000 \ 120000 -What is the amount of fixed overhead allocated to production?

(Multiple Choice)

4.8/5

(78)

Question 120

Fixed costs are usually included in flexible budgets,but they remain the same total amount within the relevant range of activity regardless of the output level chosen to 'flex' the variable costs and revenues.

Alvarado Company made the following journal entry: Variable Manufacturing Overhead Allocated 100000 Variable Manufacturing Overhead Efficiency Variance 30000 Variable Manufacturing Overhead Control 125000 Variable Manufacturing Overhead Spending Variance 5000

Caution is appropriate before interpreting the production-volume variance as a measure of the economic cost of unused capacity.

Managers can reduce ______________ costs by,say,selling equipment or laying off employees.

Managers consider variance analysis of all variable overhead costs when making such decisions and when managing costs.

_______________ costs never have any unused capacity.

Variance information regarding non-manufacturing costs can be used to:

To plan variable overhead costs effectively for a product or service,managers must eliminate the activities that do not add __________ to the product or service.

When machine-hours are used as an overhead cost-allocation base,the MOST likely cause of a favourable variable overhead spending variance is:

Which type of costs are overhead costs of products,and consist of some costs that are variable and some that are fixed with respect to the number of set-up hours?

At the end of the financial year,the variance accounts are written off to cost of goods sold if immaterial in amount.

The variable overhead efficiency variance is computed in a different way than the efficiency variance for direct-cost items.

The variable overhead flexible-budget variance measures the difference between:

Fixed overhead has no efficiency variance.

Under activity-based costing,the flexible-budget amount equals the static-budget amount for fixed overhead costs.

An unfavourable fixed set-up overhead spending variance could be due to higher lease costs of new set-up equipment.

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

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