$20.00 ACC-350 Managerial Accounting Quiz 5ISBN: 9780073379
Book Title: Introduction to Managerial Accounting
Book Author: Peter C. Brewer, Ray H Garrison, Eric Noreen,
Found in Business: Accounting
Chapter 1, # 0
1. A key feature of a flexible budget is that actual results can be compared to budgeted costs at the same level of activity.
2. Fixed costs should not be included in a flexible budget because they do not change when the level of activity changes.
3. The overhead spending variance is not affected by excessive usage or waste of overhead materials.
4. A company has a standard cost system in which fixed and variable manufacturing overhead costs are applied to products on the basis of direct labor-hours. The company's choice of the denominator level of activity affects the fixed overhead volume variance.
5. When fixed manufacturing overhead cost is applied to work in process, it is treated as if it were a variable cost.
6. There can be a volume variance for either variable manufacturing overhead or fixed manufacturing overhead.
7. The purpose of a flexible budget is to:
A) Allow management some latitude in meeting goals.
B) Eliminate fluctuations in production reports by ignoring variable costs.
C) Compare actual and budgeted results at virtually any level of activity.
D) Reduce the time to prepare the annual budget.
8. The activity base that is used for a flexible budget for an overhead cost should be:
A) Direct labor-hours.
B) Units of output.
C) Expressed in dollars, if possible.
D) The cause of the overhead cost.
9. The fixed manufacturing overhead budget variance equals:
A) Actual fixed manufacturing overhead cost--Applied fixed manufacturing overhead cost.
B) Actual fixed manufacturing overhead cost--Budgeted fixed manufacturing overhead cost.
C) Budgeted fixed manufacturing overhead cost--Applied fixed manufacturing overhead cost.
D) Actual fixed manufacturing overhead cost-- (Actual hours x Standard fixed overhead rate).
10. The manufacturing overhead variance that is a measure of capacity utilization is:
A) The overhead spending variance.
B) The overhead efficiency variance.
C) The overhead budget variance.
D) The overhead volume variance.
11. The volume variance is nonzero whenever:
A) Standard hours allowed for the output of a period differ from the denominator level of activity.
B) Actual hours differ from the denominator level of activity.
C) Standard hours allowed for the output of a period differ from the actual hours during the period.
D) Actual fixed overhead costs incurred during a period differ from budgeted fixed overhead costs as contained in the flexible budget.
12. A volume variance is computed for:
A) Both variable and fixed overhead.
B) Variable overhead only.
C) Fixed overhead only.
D) Direct labor costs as well as overhead costs.
13. Riggs Enterprise's flexible budget cost formula for indirect materials, a variable cost, is $0.45 per unit of output. If the company's performance report for last month shows a $90 favorable variance for indirect materials and if 8,700 units of output were produced last month, then the actual costs incurred for indirect materials for the month must have been:
14. Chmielewski Medical Clinic measures its activity in terms of patient-visits. Last month, the budgeted level of activity was 1,560 patient-visits and the actual level of activity was 1,530 patient-visits. The clinic's director budgets for variable overhead costs of $1.10 per patient-visit and fixed overhead costs of $19,900 per month. The actual variable overhead cost last month was $1,400 and the actual fixed overhead cost was $21,720. In the clinic's flexible budget performance report for last month, what would have been the variance for the total overhead cost?
A) $33 F.
B) $1,504 U.
C) $1,537 U.
D) $283 F.
15. Rodriques Tile Installation Corporation measures its activity in terms of square feet of tile installed. Last month, the budgeted level of activity was 1,630 square feet and the actual level of activity was 1,720 square feet. The company's owner budgets for supply costs, a variable overhead cost, at $3.40 per square foot. The actual supply cost last month was $6,750. In the company's flexible budget performance report for last month, what would have been the variance for supply costs?
A) $353 U.
B) $306 U.
C) $902 U.
D) $1,208 U.
A) $4,000 unfavorable.
B) $4,000 favorable.
C) $570 favorable.
D) $570 unfavorable.
A) $3,720 favorable.
B) $2,280 unfavorable.
C) $1,840 favorable.
D) $1,880 unfavorable.
A) $7,800; $14,400
B) $7,800; $18,000
C) $6,240; $14,400
D) $6,240; $18,000
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