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

Unskilled workforce can lead to unfavorable efficiency variance.

Answer the following questions using the information below: Zitrik Corporation manufactured 100,000 buckets during February. The variable overhead cost-allocation base is $5.00 per machine-hour. The following variable overhead data pertain to February: Actual Budgeted Production 90,000 units 90,000 units Machine-hours 9,800 hours 9,000 hours Variable overhead cost per machine-hour \ 5.15 \ 5.05 -What is the actual variable overhead cost?

Answer the following questions using the information below: Roberson Corporation manufactured 30,000 ice chests during September. The variable overhead cost-allocation base is $11.25 per machine-hour. The following variable overhead data pertain to September: Actual Budgeted Production 30,000 units 24,000 units Machine-hours 15,000 hours 10,800 hours Variable overhead cost per machine-hour: \ 11.00 \ 11.25 -What is the variable overhead efficiency variance?

When variable overhead efficiency variance is favorable,it can be safely assumed that the ________.

The production-volume variance is a component of the sales-volume variance.

Answer the following questions using the information below: Zitrik Corporation manufactured 100,000 buckets during February. The variable overhead cost-allocation base is $5.00 per machine-hour. The following variable overhead data pertain to February: Actual Budgeted Production 90,000 units 90,000 units Machine-hours 9,800 hours 9,000 hours Variable overhead cost per machine-hour \ 5.15 \ 5.05 -What is the variable overhead spending variance?

Use the following information to answer the questions below: Mynarc Corporation produces fertilizer and distributes the product by using his tanker trucks. Mynarc uses budgeted fleet hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data: Budgeted output units 675 truckloads Budgeted fleet hours 540 hours Budgeted variable manufacturing overhead costs for 675 loads \ 82,350 Actual output units produced and delivered 630 truckloads Actual fleet hours 436 hours Actual variable manufacturing overhead costs \ 77,490 -What is the budgeted variable manufacturing overhead cost per unit?

The major challenge when planning fixed overhead is ________.

Luke's Football Manufacturing Company reported: Actual fixed overhead \ 400,000 Fixed manufacturing overhead spending variance \ 10,000 favorable Fixed manufacturing production-volume variance \ 15,000 unfavorable To isolate these variances at the end of the accounting period,John would debit Fixed Manufacturing Overhead Allocated for ________.

Alka Corporation manufactures industrial-sized gas furnaces and uses budgeted machine-hours to allocate variable manufacturing overhead.The following information pertains to the company's manufacturing overhead data: Budgeted output units 29,000 urits Budgeted machine-hours 10,150 hours Budgeted variable manufacturing overhead costs for 29,000 units \ 324,800 Actual output units produced 31,000 urits Actual machine-hours used 14,400 hours Actual variable manufacturing overhead costs \ 333,250 What is the budgeted variable overhead cost rate per output unit?

An effective plan for variable overhead costs will eliminate activities that do not add value.

When machine-hours are used as an overhead cost-allocation base and annual leasing costs for equipment unexpectedly increase,the most likely result would be to report a(n)________.

Prod uction- Variances Spending Efficiency Volume Variable manufacturing overhead \ 7,500 \ 30,000 () Fixed manufacturing overhead \ 28,000 () \ 80,000 -In a combined 3-variance analysis,the total spending variance would be ________.

Casey Corporation produces a special line of basketball hoops.Casey Corporation produces the hoops in batches.To manufacture a batch of the basketball hoops,Casey Corporation must set up 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 basketball hoops. 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 January 2005. Static-budget Actual Amounts Amounts Basketball hoops produced and sold 30,000 28,000 Batch size (number of units per batch) 200 250 Setup-hours per batch 5 4 Variable overhead cost per setup hour \ 10 \ 9 Total fixed setup overhead costs \ 22,500 \ 21,000 Required: a.Calculate the efficiency variance for variable overhead setup costs. b.Calculate the spending variance for variable overhead setup costs. c.Calculate the flexible-budget variance for variable overhead setup costs. d.Calculate the spending variance for fixed overhead setup costs. e.Calculate the production-volume variance for fixed overhead setup costs.

Allocated fixed overhead can be expressed in terms of allocation-base units or in terms of the budgeted fixed cost per unit.

Answer the following questions using the information below: Munoz, Inc., produces a special line of plastic toy racing cars. Munoz, Inc., produces the cars in batches. To manufacture a batch of the cars, Munoz, Inc., must set up 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 2015: -Calculate the efficiency variance for variable overhead setup costs.

Answer the following questions using the information below: Sport-in Corporation manufactured 10,000 golf bags during April. The following fixed overhead data pertain to March: Actual Static Budget Production 20,000 units 20,500 units Machine-hours 5,100 hours 6,150 hours Fixed overhead cost for March \ 250,000 \ 258,300 -What is the amount of fixed overhead spending variance?

If budgeted and actual machine hours are equal,spending variance will always be nil.

Tightly budgeted machine time standards can lead to unfavorable variable overhead efficiency variance.

Fixed overhead costs ________.