Exam 8: Flexible Budgets,variances,and Management Control: II

Use the information below to answer the following question(s). Moeller Electric manufactures light fixtures.The following information pertains to the company's manufacturing overhead data. -What is Moeller Electric's variable manufacturing overhead sales-volume variance?

Answer the following question(s)using the information below. Jenny's Corporation manufactured 25,000 grooming kits for horses during March.The fixed-overhead cost allocation rate is $20.00 per machine-hour.The following fixed overhead data pertain to March: -What is the amount of fixed overhead allocated to production?

Fixed and variable cost variances can ________ be applied to activity-based costing systems.

Answer the following question(s)using the information below. Munoz Inc.produces a special line of plastic toy racing cars in batches.To manufacture a batch of the cars Munoz Inc.must setup 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 2012: -Calculate the efficiency variance for variable setup overhead costs.

Answer the following question(s)using the information below. Rutch Corporation manufactured 54,000 door jambs during September.The fixed-overhead cost allocation rate is $50.00 per machine-hour.The following fixed overhead data pertain to September: -What is the amount of fixed overhead allocated to production?

Brown Company makes watches.The budgeted fixed overhead costs for 2016 total $324,000.The company uses direct labour-hours for fixed overhead allocation and anticipates 10,800 hours during the year for 540,000 units.An equal number of units are budgeted for each month. During October,48,000 watches were produced and $28,000 was spent on fixed overhead. Required: a.Determine the fixed overhead rate for 2016 based on the units of input. b.Determine the fixed overhead static-budget variance for October. c.Determine the production-volume overhead variance for October.

Everjoice Company makes clocks.The budgeted fixed overhead costs for 2015 total $720,000.The company uses direct labour-hours for fixed overhead allocation and anticipates 240,000 hours during the year for 480,000 units.An equal number of units are budgeted for each month. During June,42,000 clocks were produced and $63,000 were spent on fixed overhead. Required: a.Determine the fixed overhead rate for 2015 based on units of input. b.Determine the fixed overhead static-budget variance for June. c.Determine the production-volume overhead variance for June.

Answer the following question(s)using the information below. Lukehart Industries Inc.produces air purifiers in batches.To manufacture a batch of the purifiers Lukehart Inc.must setup 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 2012: -Calculate the rate variance for variable setup overhead costs.

Explain the meaning of a favourable production-volume variance.

The difference between budgeted fixed manufacturing overhead and the fixed manufacturing overhead allocated to actual output units achieved is called

Capacity cost is a variable overhead cost.

What is the variable manufacturing overhead static-budget variance given the following information?

Mostly Miniatures 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 static-budget variance,they are unclear as to how to interpret the production-volume overhead variances.Currently the company has a production capacity of 54,000 miniatures a month although it generally produces only 46,000 cases.However,in any given month the actual production is probably something other than 46,000. Required: a.Does the production-volume overhead variance measure the difference between the 54,000 and 46,000,or the difference between the 46,000 and the actual monthly production? Explain. b.What advice can you provide the managers that will help them interpret the production-volume overhead variances?

Answer the following question(s)using the information below. Jenny's Corporation manufactured 25,000 grooming kits for horses during March.The fixed-overhead cost allocation rate is $20.00 per machine-hour.The following fixed overhead data pertain to March: -What is the production-volume variance?

The variable overhead efficiency variance can be interpreted the same way as the efficiency variance for direct-cost items.

Answer the following question(s)using the information below. Rutch Corporation manufactured 54,000 door jambs during September.The fixed-overhead cost allocation rate is $50.00 per machine-hour.The following fixed overhead data pertain to September: -What is the flexible-budget amount for fixed overhead?

Human capital refers to the intangible skills provided by people and is an inventoriable cost under ASPE/IFRS.

If a manager views the proration approach as not being cost-effective,then adjusting cost of goods sold is acceptable provide the amount is material.

Explain why there is no efficiency variance for fixed manufacturing overhead costs.

Using a standard costing system makes it possible to use a simple recording system.