Exam 11: Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Dean Company used a standard cost system to prepare the following budget at normal capacity for the month of May. Actual data for May were as follows: Determine the fixed overhead budget and volume variances.

The sales price variance equals:

To which ledger account are the standard costs of direct material, direct labour and manufacturing overhead charged?

The fixed overhead volume variance

Felter Company reported that the total variance between actual and budgeted total contribution margin in April was $1000 favourable. The sales price variance was $5000 favourable. The fixed overhead budget variance was $1200 unfavourable. The sales volume variance was

Security Doors has a standard variable overhead rate of $4 per direct labour hour. The standard quantity of direct labour per unit of production is 3 hours. The company's static budget was based on 50 000 units. Actual results for the year are as follows. What was Security Door's variable overhead efficiency variance?

Which of the following formulas is the relationship between activity and total budgeted overhead cost is represented by?

A correct interpretation of an unfavourable variance is that it measures the cost of underutilising productive capacity.

In a standard costing system, the total manufacturing overhead variance is measured as

Which of the following statements about variable overhead variances is correct?

As overall productive activity changes, the following should move in the same direction, in roughly the same proportion:

The following table provides information about a company's production. If variable costs increased in 2005 by 10 per cent and fixed overheads increased in 2006 by 20 per cent, what was the variable cost per unit in 2004?

What can create the variable overhead efficiency variance?

Z Company uses a variable costing system. There was no opening or closing stock. The following data is available. Use this data to determine Z's sales price variance.

Which of the following is used in the calculation of the variable overhead spending variance?

An unfavourable fixed overhead budget is likely to the result of

Since variances are temporary accounts, how are they usually handled?

Carvelle Cabinets set the following standard cost per unit for 2008. The standards were set based on a capacity of 20 000 machine hours. During the year, 5100 units were produced. What was Carvelle's fixed overhead budget variance?

Which of the following statements on flexible budgets is false?

A static budget is always: