Exam 8: Flexible Budgets, overhead Cost Variances, and Management Control

The variable overhead efficiency variance measures the difference between the ________,multiplied by the budgeted variable overhead cost per unit of the cost-allocation base.

Effective planning of fixed overhead costs includes ________.

The accounting for 3-variance analysis is simpler than the 4-variance analysis,but some information is lost because the variable and fixed overhead spending variances are combined into a single total overhead spending variance.

Bismith Company reported: Actual fixed overhead \ 500,000 Fixed manufacturing overhead spending variance \ 30,000 favorable Fixed manufacturing production-volume variance \ 20,000 unfavorable To record the write-off of these variances at the end of the accounting period,Bismith would ________.

A $5,000 unfavorable flexible-budget variance indicates that ________.

Answer the following questions using the information below: Deocomfort Corporation manufactured 54,000 door jambs during September. The following fixed overhead data relates to September: Actual Static Budget Production 55,500 units 55,000 units Machine-hours 985 hours 1,100 hours Fixed overhead costs for September \ 50,500 \ 50,600 -What is the fixed overhead spending variance?

Prod uction- Variances Spending Efficiency Volume Variable manufacturing overhead \ 7,500 \ 30,000 () Fixed manufacturing overhead \ 28,000 () \ 80,000 -The above table is a ________.

Use the following information to answer the following questions: Autogas Corporation manufactures industrial-sized gas furnaces and uses budgeted machine hours to allocate variable manufacturing overhead. The following information relates to the company's manufacturing overhead data: Budgeted output units 31,000 urits Budgeted machine-hours 16,585 hours Budgeted variable manufacturing overhead costs for 31,000 units \ 348,285 Actual output units produced 33,000 urits Actual machine-hours used 14,400 hours Actual variable manufacturing overhead costs \ 384,000 -What is the flexible-budget amount for variable manufacturing overhead?

Answer the following questions using the information below: Russo Corporation manufactured 16,000 air conditioners during November. The overhead cost-allocation base is $31.50 per machine-hour. The following variable overhead data pertain to November: Actual Budgeted Production 16,000 units 18,000 units Machine-hours 7,875 hours 9,000 hours Variable overhead cost per machine-hour: \ 31.00 \ 31.50 -What is the total variable overhead variance

If the production planners set the budgeted machine hours standards too loose,one could anticipate there would be a favorable fixed overhead efficiency variance.

The variable overhead efficiency variance is the difference between actual quantity of the cost-allocation base used and budgeted quantity of the cost-allocation base allowed for actual output,multiplied by the budgeted variable overhead cost per unit of the cost-allocation base.

Answer the following questions using the information below: Lukehart Industries, Inc., produces air purifiers. Lukehart, Inc., produces the air purifiers in batches. To manufacture a batch of the purifiers, Lukehart, Inc., must set up 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 2015: Budget Actual Amounts Amounts Units produced and sold 10,000 9,000 Batch size (number of units per batch) 400 375 Setup-hours per batch 6 5.5 Variable overhead cost per setup-hour \ 50 \ 52 Total fixed setup overhead costs \ 18,000 \ 17,750 -Calculate the efficiency variance for variable overhead setup costs.

Which of the following journal entries is used to record fixed overhead costs allocated?

Explain how service-sector companies can benefit from variance analysis.

The planning of fixed overhead costs differs from the planning of variable overhead costs in terms of timing.

For fixed manufacturing overhead,there is no ________.

Managers can use variance analysis to make decisions about the mix of products to make.

Explain why there is no production-volume variance for variable manufacturing overhead costs.

The planning of fixed overhead costs does not differ from the planning of variable overhead costs.

Briefly explain the meaning of the variable overhead efficiency variance and the variable overhead spending variance.