Just Bags Just Bags produces leather purses. The company has developed a static budget for the first quarter, which is based on 20,000 direct labour hours. During the quarter, the actual activity was 22,000 direct labour hours. Data for the first quarter are summarized as follows: $\begin{array}{lrr} &\underline{\text { Static budget }}&\underline{\text { Actual costs }}\\ &\underline{(20,000 \text { hours })} &\underline{(22,000 \text { hours })}\\ \text { Direct materials } & \$ 80,000 & \$ 87,000 \\ \text { Direct labour } & 160,000 & 174,000 \\ \text { Rent } &\underline{ 48,000} &\underline{ 50,000} \\ \text { Total } & \underline{\$ 288,000} & \underline{\$ 311,000} \end{array}$ -Refer to Just Bags. What is the flexible budget amount for the first quarter?

A) $261,000 B) $288,000 C) $311,000 D) $312,000 A) $261,000 B) $288,000 C) $311,000 D) $312,000

Universal Forklifts, Inc.Universal Forklifts, Inc. produces a specialized machine part used in forklifts. For last year's operations, the following data were gathered: $\begin{array}{ll} \text { Units produced: } & 60,000 \\ \text { Direct labour: } & 30,000 \text { hours }(a) \$ 9.00 \text { per hour } \\ \text { Actual variable overhead: } & \$ 150,000 \end{array}$ The company employs a standard costing system. During the year, a variable overhead rate of $4.50 per hour was used. The labour standard requires a half hour per unit produced. -Refer to Universal Forklifts. What is the variable overhead spending variances?

A) $7,500 U B) $10,000 U C) $15,000 U D) $15,000 F A) $7,500 U B) $10,000 U C) $15,000 U D) $15,000 F

CarParts Company was planning to produce 3,200,000 carburetors for the current year. Each carburetor requires 0.375 standard hours of labour for completion. The company uses direct labour hours to assign overhead to products. The total fixed overhead budgeted for the current year was $1,980,000. Total budgeted overhead was $4,050,000. Predetermined overhead rates are calculated using expected production, measured in direct labour hours. Actual results for the year follow: \[\begin{array} { l r } \text { Actual production (units) } & 3,540,000 \\ \text { Actual direct labour hours } & 1,190,000 \\ \text { Actual fixed ov erhead } & \$ 1,920,000 \\ \text { Actual variable overhead } & 2,150,000 \end{array}\] Required: A. Compute the applied fixed overhead. B. Compute the fixed overhead spending and volume variances. C. Compute the applied variable overhead. D. Compute the variable overhead spending and efficiency variances. Carry per hour computations out to three decimal places.

A. Fixed overhead rate (SFOR) = $1,980,0

Universal Forklifts, Inc.Universal Forklifts, Inc. produces a specialized machine part used in forklifts. For last year's operations, the following data were gathered: $\begin{array}{ll} \text { Units produced: } & 60,000 \\ \text { Direct labour: } & 30,000 \text { hours }(a) \$ 9.00 \text { per hour } \\ \text { Actual variable overhead: } & \$ 150,000 \end{array}$ The company employs a standard costing system. During the year, a variable overhead rate of $4.50 per hour was used. The labour standard requires a half hour per unit produced. -Refer to Long, Inc. What is the variable overhead efficiency variance?

A) $20,000 U B) $20,000 F C) $80,000 U D) $80,000 F A) $20,000 U B) $20,000 F C) $80,000 U D) $80,000 F

Exam 11: Flexible Budgets and Overhead Analysis

During the year, Plasticine produced 10,000 units, used 21,000 direct labour hours, and incurred variable overhead of $100,000. Budgeted variable overhead for the year was $88,000. The hours allowed per unit are 2.1. The standard variable overhead rate is $4.10 per direct labour hour. What was the variable overhead spending variance?

(Multiple Choice)

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Question 21

What is characteristic of a before-the-fact flexible budget?

(Multiple Choice)

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Question 22

What is characteristic of activity-based budgeting?

(Multiple Choice)

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Question 23

What does the fixed overhead volume variance measure?

(Multiple Choice)

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Question 24

Activity-based budgeting approach focuses on cost items required by organizational units.

(True/False)

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Question 25

Using activity-based budgeting, flexible budgets are computed for a single cost driver.

(True/False)

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Question 26

What is NOT one of the three steps in building an activity-based budget?

(Multiple Choice)

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Question 27

Just Bags Just Bags produces leather purses. The company has developed a static budget for the first quarter, which is based on 20,000 direct labour hours. During the quarter, the actual activity was 22,000 direct labour hours. Data for the first quarter are summarized as follows: Direct materials \ 80,000 \ 87,000 Direct labour 160,000 174,000 Rent Total -Refer to Just Bags. What is the flexible budget amount for the first quarter?

(Multiple Choice)

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(64)

Question 28

Which formula reflects the fixed overhead volume variance?

(Multiple Choice)

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(67)

Question 29

Universal Forklifts, Inc.Universal Forklifts, Inc. produces a specialized machine part used in forklifts. For last year's operations, the following data were gathered: Units produced: 60,000 Direct labour: 30,000 hours (a)\ 9.00 per hour Actual variable overhead: \ 150,000 The company employs a standard costing system. During the year, a variable overhead rate of $4.50 per hour was used. The labour standard requires a half hour per unit produced. -Refer to Universal Forklifts. What is the variable overhead spending variances?

(Multiple Choice)

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(71)

Question 30

Refer to Cannon Company. What is the standard activity level on which the company based its fixed overhead rate?

(Multiple Choice)

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Question 31

Which formula reflects the variable overhead spending variance?

(Multiple Choice)

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Question 32

What is characteristic of an after-the-fact flexible budget?

(Multiple Choice)

4.8/5

(64)

Question 33

CarParts Company was planning to produce 3,200,000 carburetors for the current year. Each carburetor requires 0.375 standard hours of labour for completion. The company uses direct labour hours to assign overhead to products. The total fixed overhead budgeted for the current year was $1,980,000. Total budgeted overhead was $4,050,000. Predetermined overhead rates are calculated using expected production, measured in direct labour hours. Actual results for the year follow: Actual production (units) 3,540,000 Actual direct labour hours 1,190,000 Actual fixed ov erhead \ 1,920,000 Actual variable overhead 2,150,000 Required: A. Compute the applied fixed overhead. B. Compute the fixed overhead spending and volume variances. C. Compute the applied variable overhead. D. Compute the variable overhead spending and efficiency variances. Carry per hour computations out to three decimal places.

(Essay)

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(97)

Question 34

Which two costs are compared in a performance report that uses activity flexible budgeting?

(Multiple Choice)

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(77)

Question 35

Bridgestone Company Bridgestone Company has developed the following flexible budget formulas for its four overhead items: Variable rate per Overhead item Fixed cost direct labour hour Maintenance \ 8,000 \ 2.00 Power \ 2,000 \ 0.40 The company normally produces 10,000 units (each unit requires 0.10 direct labour hours); however, this year 15,000 units were produced with the following actual costs: Overhead item Actual costs Maintenance \ 14,000 Power \ 3,600 Equipment lease \ 5,000 -Refer to Bridgestone Company. When using an after-the-fact flexible budget, what is the total overhead budget variance?

(Multiple Choice)

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Question 36

What are the two variances for variable overhead?

(Multiple Choice)

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Question 37

Universal Forklifts, Inc.Universal Forklifts, Inc. produces a specialized machine part used in forklifts. For last year's operations, the following data were gathered: Units produced: 60,000 Direct labour: 30,000 hours (a)\ 9.00 per hour Actual variable overhead: \ 150,000 The company employs a standard costing system. During the year, a variable overhead rate of $4.50 per hour was used. The labour standard requires a half hour per unit produced. -Refer to Long, Inc. What is the variable overhead efficiency variance?

(Multiple Choice)

4.9/5

(76)

Question 38

Refer to Lifter Company. What is the fuel budget for the year for moving materials?

(Multiple Choice)

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(81)

Question 39

Price changes of variable overhead items are easily controlled by production supervisors.

(True/False)

4.7/5

(79)

Question 40

Showing 21 - 40 of 147

What is characteristic of a before-the-fact flexible budget?

What is characteristic of activity-based budgeting?

What does the fixed overhead volume variance measure?

Activity-based budgeting approach focuses on cost items required by organizational units.

Using activity-based budgeting, flexible budgets are computed for a single cost driver.

What is NOT one of the three steps in building an activity-based budget?

Which formula reflects the fixed overhead volume variance?

Refer to Cannon Company. What is the standard activity level on which the company based its fixed overhead rate?

Which formula reflects the variable overhead spending variance?

What is characteristic of an after-the-fact flexible budget?

Which two costs are compared in a performance report that uses activity flexible budgeting?

What are the two variances for variable overhead?

Refer to Lifter Company. What is the fuel budget for the year for moving materials?

Price changes of variable overhead items are easily controlled by production supervisors.

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Budgeting, Production, Cash, and Master Budget

Standard Costing: a Managerial Control Tool

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

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