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

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

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 flexible-budget amount for variable manufacturing overhead?

Answer the following questions using the information below: Ecocomfort Corporation manufactured 1,000 coolers during October. The following variable overhead data relates to October: Variable overhead spending variance \ 1,230 Unfavorable Variable overhead efficiency variance \ 175 Unfavorable Budgeted machine hours allowed for actual output 615 machine hours Actual cost per machine hour \ 27 Budgeted cost per machine hour \ 25 -Calculate the variable overhead flexible-budget variance.

Which of the following statements is true of variable overhead costs?

Standard costing is a costing system that allocates overhead costs on the basis of the standard overhead-cost rates times the standard quantities of the allocation bases allowed for the actual outputs produced.

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 flexible-budget amount?

The production-volume variance may also be referred to as the ________.

Most of the decisions determining the level of fixed overhead costs to be incurred will be made ________.

Use the following information to answer the questions below: Baseballic Corporation manufactures baseball uniforms and uses budgeted machine-hours to allocate variable manufacturing overhead. The following information relates to the company's manufacturing overhead data: Budgeted output units 11,250 units Budgeted machine-hours 22,500 hours Budgeted variable manufacturing overhead costs for 11,250 units \ 213,750 Actual output urits produced 11,500 units Actual machine-hours used 22,000 hours Actual variable manufacturing overhead costs \ 225,000 -What is the amount of the budgeted variable manufacturing overhead cost per unit?

Which of the following is the correct mathematical expression is used to calculate variable overhead efficiency variance?

Fixed overhead has no production-volume variance.

The flexible budget enables to highlight the differences between budgeted costs and budgeted quantities versus actual costs and actual quantities for the budgeted output level.

Service-sector companies have no use of variance analysis as only few costs can be traced to their outputs in a cost effective way.

Fixed costs automatically increase or decrease with the level of activity within a relevant range of activity.

Causes of a favorable variable overhead efficiency variance might include using lower-skilled workers than expected.

Use the below information to answer the following questions: Bekits Corporation manufactured 25,000 grooming kits for horses during March. The following fixed overhead data relates to March: Actual Static Budget Production 37,500 units 36,000 units Machine-hours 6,100 hours 5,940 hours Fixed overhead costs for March \ 133,000 \ 124,740 -What is the fixed overhead spending variance?