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| 1 | |
Consider the following schedule: <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/9352606310/856415/ch11_1.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (10.0K)</a>]]>
At an actual level of 6,200 process hours, what will be the expected utilities expense if you use the concepts of a flexible budget? |
| | A) | $22,500 |
| | B) | $18,750 |
| | C) | $18,600 |
| | D) | $26,250 |
| | E) | $30,000 |
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| 2 | |
Which of the following is the formula flexible budget? |
| | A) | (Budgeted variable-overhead cost per activity unit x Total activity units) + Budgeted fixed overhead cost for the month |
| | B) | (Budgeted variable-overhead cost per planned-activity unit x Total activity units) + Budgeted fixed overhead cost for the month |
| | C) | (Actual variable-overhead cost per activity unit x Total activity units) + Budgeted fixed overhead cost for the month |
| | D) | Budgeted variable and fixed cost per unit x Total planned process hours |
| | E) | Budgeted variable and fixed cost per unit/Total planned process hours |
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| 3 | |
Stripe Corporation applies overhead to production based on machine hours. Stripe had the following cost data related to manufacturing overhead for the year ended 12/31/2009:  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/9352606310/856415/ch11_3.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (8.0K)</a>]]>
Assuming Stripe uses a standard costing system, which of the following would be included in the entry to apply overhead to production? |
| | A) | debit to Work-in-Process for $554,400 |
| | B) | debit to Manufacturing Overhead for $510,000 |
| | C) | debit to Cost of Goods Sold for $554,400 |
| | D) | debit to Work-in-Process for $510,000 |
| | E) | none of the above would be included in the entry to apply manufacturing overhead. |
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| 4 | |
Which of the following is an overhead variance? |
| | A) | Flexible overhead spending variance. |
| | B) | Variable overhead volume variance |
| | C) | Fixed overhead efficiency variance |
| | D) | Flexible overhead budget variance |
| | E) | Fixed overhead budget variance. |
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| 5 | |
Tango applies overhead to production based on direct labor hours. The purchasing manager for Tango Corporation was able to get a lower price on a large purchase of direct materials. Once production was started it was determined that the material was of a lower grade than what was usually used in production. Because of this, the material was more difficult to work with and more labor time was incurred. Which of the following correctly depicts a likely outcome of this situation? |
| | A) | a favorable flexible overhead spending variance. |
| | B) | an unfavorable variable overhead volume variance |
| | C) | an unfavorable variable overhead efficiency variance |
| | D) | Both b and c |
| | E) | It is impossible to tell from the information provided. |
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| 6 | |
Variable overhead is applied at a rate of $2.15 per machine hour. The standard number of machine hours allowed for actual production was 39,000 machine hours. 40,000 machine hours were used in achieving actual production and actual variable overhead cost totaled $90,000.
What is the variable overhead spending variance? |
| | A) | $4,000 favorable |
| | B) | $2,150 unfavorable |
| | C) | $6,150 unfavorable |
| | D) | $2,150 unfavorable |
| | E) | $4,000 unfavorable |
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| 7 | |
Consider the following chart for 7,000 actual process hours, 6,500 standard hours allowed, an actual overhead rate of $4.00 and a standard overhead rate of $3.80:
 <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::11_7::/sites/dl/free/9352606310/856744/11_7.JPG','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif">11_7 (22.0K)</a>]]>11_7
Which of the following is true? |
| | A) | The difference between A and B is a favorable variable-overhead spending variance. |
| | B) | The difference between A and B is an unfavorable variable-overhead spending variance. |
| | C) | The difference between B and C is a favorable variable-overhead efficiency variance. |
| | D) | The difference between A and B is a favorable variable-overhead efficiency variance. |
| | E) | The difference between B and C is an unfavorable variable-overhead spending variance |
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| 8 | |
Which of the following is not a criterion for choosing an activity measure? |
| | A) | Identifying the cost driver that most significantly affects overhead costs |
| | B) | The activity measure and the variable-overhead costs move together as overall production activity changes |
| | C) | The activity measure must be a dollar measure |
| | D) | Using an activity measure that is more closely linked with changing manufacturing technology |
| | E) | All of the above |
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| 9 | |
Which of the following statements is true about the variable-overhead spending variance? |
| | A) | An unfavorable variance means that the total actual cost of variable overhead is greater than expected, after adjusting for the actual quantity of process hours used. |
| | B) | An unfavorable variance could result from paying a higher-than-expected price per unit for variable-overhead items. |
| | C) | An unfavorable variance could result from using more of the variable-overhead items than expected. |
| | D) | All of the above are true about the variable-overhead spending variance. |
| | E) | None of the above are true |
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| 10 | |
Consider the following variable designations:  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/9352606310/856415/ch11_10.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (13.0K)</a>]]>
Using the variable designations given above, determine which of the following expresses the fixed-overhead volume variance? |
| | A) | Actual Fixed Overhead – Budgeted Fixed Overhead |
| | B) | SVR(AH – SH) |
| | C) | (PFR x Planned Activity) – (PFR x SH) |
| | D) | AH(PFR – SVR) |
| | E) | None of the above |
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| 11 | |
Budgeted fixed overhead is $36,000 for a planned capacity of 18,000 process hours. The fixed-overhead volume variance was $2,400 unfavorable. What were the standard hours allowed for the number of units produced? |
| | A) | 19,200 |
| | B) | 16,800 |
| | C) | 18,000 |
| | D) | 18,600 |
| | E) | 16,600 |
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| 12 | |
In an overhead cost performance report, which variance is not reported? |
| | A) | Variable-overhead spending variance |
| | B) | Variable-overhead efficiency variance |
| | C) | Fixed-overhead budget variance |
| | D) | Fixed-overhead volume variance |
| | E) | Both (C) and (D) are not reported |
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| 13 | |
Which of the following is true about an activity-based flexible budget? |
| | A) | It is based on cost drivers assigned to various cost pools. |
| | B) | It is a less accurate reporting device than the traditional flexible budget. |
| | C) | It treats facility level costs as fixed costs. |
| | D) | Both (A) and (C). |
| | E) | None of the above. |
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| 14 | |
Consider the following monthly activity-based flexible budget: <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/9352606310/856415/ch11_14.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (57.0K)</a>]]>
The manufacturing activity in November consisted of 8,000 process hours, 120 production runs, 800 products tested, and 16,500 direct materials handled. What is the activity-based flexible budget for November? |
| | A) | $40,725 |
| | B) | $37,300 |
| | C) | $39,525 |
| | D) | $40,600 |
| | E) | None of the above |
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| 15 | |
Consider the following yearly activity-based flexible budget for a limousine service: <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/9352606310/856415/ch11_15.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (59.0K)</a>]]>
The limousine rental activity for the year consisted of 40,500 miles and 315 customer contacts. What is the activity-based flexible budget for the year? |
| | A) | $78,900 |
| | B) | $31,365 |
| | C) | $79,545 |
| | D) | $75,365 |
| | E) | None of the above |
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