Question 1

When the variable costing method is used,fixed factory overhead appears on the income statement as a ________.

Accepted Answer

A)  component of cost of goods sold 
B)  component of cost of goods sold and production volume variance 
C)  production volume variance 
D)  fixed expense 
A)  component of cost of goods sold 
B)  component of cost of goods sold and production volume variance 
C)  production volume variance 
D)  fixed expense

Question 2

A department's applied overhead cost will ________ equal the actual overhead cost incurred.

Accepted Answer

A)  always 
B)  never 
C)  about fifty percent of the time 
D)  rarely 
A)  always 
B)  never 
C)  about fifty percent of the time 
D)  rarely

Question 3

The production volume variance measures the difference between applied and budgeted fixed overhead.

Accepted Answer

A) True 
 B)False

Question 4

Why is variable costing used for internal reports?

Accepted Answer

A)  It can also be used for external reports. 
B)  It is readily available through most computer systems. 
C)  It removes the impact of changing inventory levels from the financial results. 
D)  B and C 
A)  It can also be used for external reports. 
B)  It is readily available through most computer systems. 
C)  It removes the impact of changing inventory levels from the financial results. 
D)  B and C

Question 5

Underapplied and overapplied fixed overhead has two components that include a production-volume variance and a fixed overhead flexible budget variance.

Accepted Answer

A) True 
 B)False

Question 6

To determine the cost of a manufactured product,a normal costing system uses ________.

Accepted Answer

A)  actual direct material, actual direct labor and actual overhead costs 
B)  applied direct material, applied direct labor and applied overhead costs 
C)  applied direct material, applied direct labor and actual overhead costs 
D)  actual direct materials, actual direct labor and normal applied overhead costs 
A)  actual direct material, actual direct labor and actual overhead costs 
B)  applied direct material, applied direct labor and applied overhead costs 
C)  applied direct material, applied direct labor and actual overhead costs 
D)  actual direct materials, actual direct labor and normal applied overhead costs

Question 7

When the actual production volume exceeds the expected production volume,the production volume variance is favorable.

Accepted Answer

A) True 
 B)False

Question 8

The proration method of disposing of overhead variances assigns the variance in proportion to the sizes of the ending account balances of ________.

Accepted Answer

A)  work-in-process inventory, finished goods inventory and direct materials inventory 
B)  work-in-process inventory, direct materials inventory and cost of goods sold 
C)  work-in-process inventory and direct materials inventory 
D)  work-in-process inventory, finished goods inventory and cost of goods sold 
A)  work-in-process inventory, finished goods inventory and direct materials inventory 
B)  work-in-process inventory, direct materials inventory and cost of goods sold 
C)  work-in-process inventory and direct materials inventory 
D)  work-in-process inventory, finished goods inventory and cost of goods sold

Question 9

Fixed manufacturing overhead costs are excluded from product costs under absorption costing.

Accepted Answer

A) True 
 B)False

Question 10

The cost-allocation base used for the fixed overhead rate should be ________.

Accepted Answer

A)  underestimated due to the conservatism principle 
B)  overestimated due to the conservatism principle 
C)  the most plausible and reliable measure available of the cause and effect relationship between overhead costs and production volume 
D)  the most plausible and reliable measure available of the relationship between overhead costs and sales 
A)  underestimated due to the conservatism principle 
B)  overestimated due to the conservatism principle 
C)  the most plausible and reliable measure available of the cause and effect relationship between overhead costs and production volume 
D)  the most plausible and reliable measure available of the relationship between overhead costs and sales

Question 11

If the actual volume of production differs from the expected volume of production,the same variable overhead costs per unit are used for ________ and ________ purposes.

Accepted Answer

A)  budgeting; employee motivation 
B)  budgeting; product costing 
C)  flexible budgets; employee hiring 
D)  planning; employee hiring 
A)  budgeting; employee motivation 
B)  budgeting; product costing 
C)  flexible budgets; employee hiring 
D)  planning; employee hiring

Question 12

Which of the following statements is FALSE?

Accepted Answer

A)  The expected variable overhead costs per unit used in the flexible budget are equal to the variable overhead costs per unit used in product costing. 
B)  If the actual volume of production equals the expected volume of production, the variable overhead costs per unit are the same for product costing and budgeting. 
C)  If the actual volume of production exceeds the expected volume of production, the variable overhead costs per unit are different for product costing and budgeting. 
D)  If the actual volume of production exceeds the expected volume of production, the variable overhead costs per unit are the same for product costing and budgeting. 
A)  The expected variable overhead costs per unit used in the flexible budget are equal to the variable overhead costs per unit used in product costing. 
B)  If the actual volume of production equals the expected volume of production, the variable overhead costs per unit are the same for product costing and budgeting. 
C)  If the actual volume of production exceeds the expected volume of production, the variable overhead costs per unit are different for product costing and budgeting. 
D)  If the actual volume of production exceeds the expected volume of production, the variable overhead costs per unit are the same for product costing and budgeting.

When the variable costing method is used,fixed factory overhead appears on the income statement as a ________.

A department's applied overhead cost will ________ equal the actual overhead cost incurred.

The production volume variance measures the difference between applied and budgeted fixed overhead.

Why is variable costing used for internal reports?

Underapplied and overapplied fixed overhead has two components that include a production-volume variance and a fixed overhead flexible budget variance.

To determine the cost of a manufactured product,a normal costing system uses ________.

When the actual production volume exceeds the expected production volume,the production volume variance is favorable.

The proration method of disposing of overhead variances assigns the variance in proportion to the sizes of the ending account balances of ________.

Fixed manufacturing overhead costs are excluded from product costs under absorption costing.

The cost-allocation base used for the fixed overhead rate should be ________.

If the actual volume of production differs from the expected volume of production,the same variable overhead costs per unit are used for and purposes.

Which of the following statements is FALSE?

Managerial Accounting,the Business Organization,and Professional Ethics

Introduction to Cost Behavior and Cost Volume Profit Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus on Pricing Decisions

Relevant Information for Decision Making With a Focus on Operational Decisions

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

Exam 13: Accounting for Overhead Costs

When the variable costing method is used,fixed factory overhead appears on the income statement as a ________.

A department's applied overhead cost will ________ equal the actual overhead cost incurred.

The production volume variance measures the difference between applied and budgeted fixed overhead.

Why is variable costing used for internal reports?

Underapplied and overapplied fixed overhead has two components that include a production-volume variance and a fixed overhead flexible budget variance.

To determine the cost of a manufactured product,a normal costing system uses ________.

When the actual production volume exceeds the expected production volume,the production volume variance is favorable.

The proration method of disposing of overhead variances assigns the variance in proportion to the sizes of the ending account balances of ________.

Fixed manufacturing overhead costs are excluded from product costs under absorption costing.

The cost-allocation base used for the fixed overhead rate should be ________.

If the actual volume of production differs from the expected volume of production,the same variable overhead costs per unit are used for ________ and ________ purposes.

Which of the following statements is FALSE?

Managerial Accounting,the Business Organization,and Professional Ethics

Introduction to Cost Behavior and Cost Volume Profit Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus on Pricing Decisions

Relevant Information for Decision Making With a Focus on Operational Decisions

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Job-Order Costing and Process-Costing Systems

Basic Accounting: Concepts, techniques, and Conventions

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

Filters

If the actual volume of production differs from the expected volume of production,the same variable overhead costs per unit are used for and purposes.