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46 Cards in this Set
- Front
- Back
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Overhead costs have been increasing due to all of the following EXCEPT:
a. increased automation b. more complexity in distribution processes c. tracing more costs as direct costs with the help of technology d. product proliferation |
c`
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Effective planning of variable overhead costs means that a company performs those
variable overhead costs that primarily add value for: a. the current shareholders b. the customer using the products or services c. plant employees d. major suppliers of component parts |
b
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Variable overhead costs include:
a. plant-leasing costs b. the plant manager’s salary c. depreciation on plant equipment d. machine maintenance |
d
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Fixed overhead costs include:
a. the cost of sales commissions b. property taxes paid on plant facilities c. energy costs d. indirect materials |
b
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Effective planning of fixed overhead costs includes all of the following EXCEPT:
a. planning day-to-day operational decisions b. eliminating nonvalue-added costs c. planning to be efficient d. choosing the appropriate level of capacity |
a
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Effective planning of variable overhead includes all of the following EXCEPT:
a. choosing the appropriate level of capacity b. eliminating nonvalue-adding costs c. redesigning products to use fewer resources d. redesigning the plant layout for more efficient processing |
a
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Choosing the appropriate level of capacity:
a. is a key strategic decision b. may lead to loss of sales if overestimated c. may lead to idle capacity if underestimated d. All of these answers are correct. |
a
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The MAJOR challenge when planning fixed overhead is:
a. calculating total costs b. calculating the cost-allocation rate c. choosing the appropriate level of capacity d. choosing the appropriate planning period |
c
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In a standard costing system, a cost-allocation base would MOST likely be:
a. actual machine-hours b. normal machine-hours c. standard machine-hours d. Any of these answers is correct. |
c
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For calculating the costs of products and services, a standard costing system:
a. only requires a simple recording system b. uses standard costs to determine the cost of products c. does not have to keep track of actual costs d. All of these answers are correct. |
d
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The variable overhead flexible-budget variance measures the difference between:
a. actual variable overhead costs and the static budget for variable overhead costs b. actual variable overhead costs and the flexible budget for variable overhead costs c. the static budget for variable overhead costs and the flexible budget for variable overhead costs d. None of these answers is correct. |
b
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A $5,000 unfavorable flexible-budget variance indicates that:
a. the flexible-budget amount exceeded actual variable manufacturing overhead by $5,000 b. the actual variable manufacturing overhead exceeded the flexible-budget amount by $5,000 c. the flexible-budget amount exceeded standard variable manufacturing overhead by $5,000 d. the standard variable manufacturing overhead exceeded the flexible-budget amount by $5,000 |
b
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Which of the following is NOT a step in developing budgeted variable overhead
rates? a. identifying the variable overhead costs associated with each cost-allocation base b. estimating the budgeted denominator level based on expected utilization of available capacity c. selecting the cost-allocation bases to use d. choosing the period to be used for the budget |
b
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In flexible budgets, costs that remain the same regardless of the output levels within
the relevant range are: a. allocated costs b. budgeted costs c. fixed costs d. variable costs |
c
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Variable-manufacturing overhead costs were __________ for actual output.
a. higher than expected b. the same as expected c. lower than expected d. indeterminable |
a
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The variable overhead flexible-budget variance can be further subdivided into the:
a. price variance and the efficiency variance b. static-budget variance and sales-volume variance c. spending variance and the efficiency variance d. sales-volume variance and the spending variance |
c
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An unfavorable variable overhead spending variance indicates that:
a. variable overhead items were not used efficiently b. the price of variable overhead items was more than budgeted c. the variable overhead cost-allocation base was not used efficiently d. the denominator level was not accurately determined |
b
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When machine-hours are used as an overhead cost-allocation base, the MOST
likely cause of a favorable variable overhead spending variance is: a. excessive machine breakdowns b. the production scheduler efficiently scheduled jobs c. a decline in the cost of energy d. strengthened demand for the product |
c
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When machine-hours are used as an overhead cost-allocation base and the
unexpected purchase of a new machine results in fewer expenditures for machine maintenance, the MOST likely result would be to report a(n): a. favorable variable overhead spending variance b. unfavorable variable overhead efficiency variance c. favorable fixed overhead flexible-budget variance d. unfavorable production-volume variance |
a
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For variable manufacturing overhead, there is no:
a. spending variance b. efficiency variance c. flexible-budget variance d. production-volume variance |
d
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An unfavorable variable overhead efficiency variance indicates that:
a. variable overhead items were not used efficiently b. the price of variable overhead items was less than budgeted c. the variable overhead cost-allocation base was not used efficiently d. the denominator level was not accurately determined |
c
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Variable overhead costs can be managed by:
a. reducing the consumption of the cost-allocation base b. eliminating nonvalue-adding variable costs c. planning for appropriate capacity levels d. Both a and b are correct. |
d
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When machine-hours are used as a cost-allocation base, the item MOST likely to
contribute to a favorable variable overhead efficiency variance is: a. excessive machine breakdowns b. the production scheduler’s impressive scheduling of machines c. a decline in the cost of energy d. strengthened demand for the product |
b
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When machine-hours are used as a cost-allocation base, the item MOST likely to
contribute to an unfavorable variable overhead efficiency variance is: a. using more machine hours than budgeted b. workers wastefully using variable overhead items c. unused capacity d. more units being produced than planned |
a
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When machine-hours are used as an overhead cost-allocation base, a rush order
resulting in unplanned overtime that used less-skilled workers on the machines would MOST likely contribute to reporting a(n): a. favorable variable overhead spending variance b. unfavorable variable overhead efficiency variance c. favorable fixed overhead flexible-budget variance b. unfavorable production-volume variance |
b
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When machine-hours are used as an overhead cost-allocation base and annual
leasing costs for equipment unexpectedly increase, the MOST likely result would be to report a(n): a. unfavorable variable overhead spending variance b. favorable variable overhead efficiency variance c. unfavorable fixed overhead flexible-budget variance b. favorable production-volume variance |
c
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The fixed overhead cost variance can be further subdivided into the:
a. price variance and the efficiency variance b. spending variance and flexible-budget variance c. production-volume variance and the efficiency variance d. flexible-budget variance and the production-volume variance |
d
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The amount reported for fixed overhead on the static budget is also reported:
a. as actual fixed costs b. as allocated fixed overhead c. on the flexible budget d. Both b and c are correct. |
c
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An unfavorable fixed overhead spending variance indicates that:
a. there was more excess capacity than planned b. the price of fixed overhead items cost more than budgeted c. the fixed overhead cost-allocation base was not used efficiently d. the denominator level was more than planned |
b
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A favorable fixed overhead spending variance might indicate that:
a. more capacity was used than planned b. the denominator level was less than planned c. the fixed overhead cost-allocation base was not used efficiently d. a plant expansion did not proceed as originally planned |
d
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For fixed manufacturing overhead, there is no:
a. spending variance b. efficiency variance c. flexible-budget variance d. production-volume variance |
d
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The production-volume variance may also be referred to as the:
a. flexible-budget variance b. denominator-level variance c. spending variance d. efficiency variance |
b
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A favorable production-volume variance indicates that the company:
a. has good management b. has allocated more fixed overhead costs than budgeted c. has a total economic gain from using excess capacity d. should increase capacity |
b
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An unfavorable production-volume variance of $40,000 indicates that the company
has: a. unused fixed manufacturing overhead capacity b. overallocated $40,000 of fixed manufacturing overhead costs c. $40,000 more capacity than needed d. an economic loss of $40,000 from selling fewer products than planned |
a
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When machine-hours are used as a cost-allocation base, the item MOST likely to
contribute to a favorable production-volume variance is: a. an increase in the selling price of the product b. the purchase of a new manufacturing machine costing considerably less than expected c. a decline in the cost of energy d. strengthened demand for the product |
d
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When machine-hours are used as a cost-allocation base, the item MOST likely to
contribute to an unfavorable production-volume variance is: a. a new competitor gaining market share b. a new manufacturing machine costing considerably more than expected c. an increase in the cost of energy d. strengthened demand for the product |
a
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Excess capacity is a sign:
a. that capacity should be reduced b. that capacity may need to be re-evaluated c. that the company is suffering a significant economic loss d. of good management decisions |
b
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An unfavorable production-volume variance:
a. is not a good measure of a lost production opportunity b. measures the total economic gain or loss due to unused capacity c. measures the amount of extra fixed costs planned for but not used d. takes into account the effect of additional revenues due to maintaining higher prices |
c
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The difference between budgeted fixed manufacturing overhead and the fixed
manufacturing overhead allocated to actual output units achieved is called the fixed overhead: a. efficiency variance b. flexible-budget variance c. combined-variance analysis d. production-volume variance |
d
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Variable overhead costs:
a. never have any unused capacity b. have no production-volume variance c. allocated are always the same as the flexible-budget amount d. All of these answers are correct. |
d
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Fixed overhead costs:
a. never have any unused capacity b. should be unitized for planning purposes c. are unaffected by the degree of operating efficiency in a given budget period d. Both a and b are correct. |
c
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Fixed overhead costs must be unitized for:
a. financial reporting purposes b. planning purposes c. calculating the production-volume variance d. Both a and c are correct. |
d
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Generally Accepted Accounting Principles require that unitized fixed
manufacturing costs be used for: a. pricing decisions b. costing decisions c. external reporting d. All of these answers are correct. |
c
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A nonfinancial measure of performance evaluation is:
a. increased sales b. reducing distribution costs c. energy used per machine-hour d. All of these answers are correct. |
c
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Variance information regarding nonmanufacturing costs can be used to:
a. plan capacity in the service sector b. control distribution costs in the retail sector c. determine the most profitable services offered by a bank d. All of these answers are correct. |
d
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Fixed and variable cost variances can __________ be applied to activity-based
costing systems. a. always b. most times c. seldom d. never |
a
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