Chapter 15

अब Quizwiz के साथ अपने होमवर्क और परीक्षाओं को एस करें!

T/F: the total OH variance is constant across all three variance-decomposition (breakdown) alternatives.

true

Given the following, calculate total over or underapplied variable overhead cost (the total overhead cost variance for the period) assuming the company uses a standard cost system. Budgeted production: 10,000 units with each unit requiring 2.5 machine hours Standard overhead application rate: $17 per machine hour Standard variable overhead application rate:$ 10 per machine hour actual production: 9,500 units actual machine hours used: 24,500 actual overhead cost $410,000 actual variable overhead cost incurred: $250,000 a.) $21,500 overapplied b.)$6,250 underapplied c.)$6,250 overapplied d.) $5,000 underapplied E.) $12,500 underapplied

E.) $12,500 underapplied total over/under applied variable overhead= actual variable overhead- standard variable overhead cost applied to production $250,000- [(9,500 units x 2.5 machine hours/units) x $10/machine hour] = $250,000 - $237,500 = $12,500 underapplied

The denominator activity level representing the expected level of output (or activity) for the upcoming period is called ______ capacity utilization. a.) budgeted b.) practical c.) normal d.) theoretical

a.) budgeted

The denominator activity level representing the maximum level of output (or activity) reduced by things such as machine downtime for routine maintenance and employee breaks s ___________ capacity. a.) practical b.) normal c.) budgeted d.) theoretical

a.) practical

For "operational control" purpose, financial performance measures ( such as the variances discussed in Chapters 14 and 15) are limited because: a.) they related only to short-term financial performance b.) if used exclusively they can cause employees to ignore key non-financial performance indicators c.) they cannot tell managers what is wrong with process or operation d.) theses measures are subject to short-term manipulation by managers e.) they cannot be incorporated into an organization's overall management accounting and control system

a.) they related only to short-term financial performance b.) if used exclusively they can cause employees to ignore key non-financial performance indicators c.) they cannot tell managers what is wrong with process or operation d.) theses measures are subject to short-term manipulation by managers

Cakes by Jacki applies standard OH costs to cakes based on DLHs. Last quarter the budget called for 3,000 cakes and total of 9,000 DLHs (3 hours per cake). The standard OH application rate was $25.50 per DLH. During the quarter 3,200 cakes were produced. Total actual OH was $232,000 and 9,500 DLHs were actually used. Cakes by Jacki uses a standard cost system. Calculate the over or under applied OH (Total OH cost variance) for the quarter. a.) $10,250 overapplied b.) $12,800 overapplied c.) $2,500 underapplied d.) $10,250 underapplied

b.) $12,800 overapplied total OH cost variance = total actual OH cost incurred- total applied OH cost = $232,000- [(3,200 units x 3 DLHs/units) x $25.50/DLH)= $232,000 - $244,800= 12,800 overapplied

Given the following, calculate the total fixed OH variance. Budgeted production: 10,000 units with each unit requiring 2.5 machine hours OH application rate: $17 per machine hour ($12 variable and $5 fixed) Actual production: 9,5000 units Actual machine hours used 24,500 Actual overhead cost: $410,000 ($263,375 variable and $146,625 fixed) a.) $21,625 U b.) $27,875 U c.) $21,625 F d.) $27,875 F

b.) $27,875 U Fixed OH applied: 9,500 units x 2.5 hours x $5 = $118,750- $146,625 actual = $27,875 U

Calculate the variable overhead spending variance: Budgeted production: 10,000 units with each unit requiring 2.5 machine hours Overhead application rate:$17 per machine hour ($12 variable and $5 fixed) Actual production: 9,500 units Actual machine hours used: 24,500 Actual overhead cost: $410,000 ($263,375 variable and $146,625 fixed) a.) $21,625 U b.) $30,625 F c.) $30,625 U d.) $21,625 F

b.) $30,625 F Variable overhead spending variance = actual variable OH cost incurred - flexible budget for variable OH based on inputs = $263,375 - (actual machine hours worked x standard variable OH rate/machine hour) = $263,375 - (24,000 hrs. x $12/hr.) = $263,375 - $294,000= $30,625 F. Alternatively, variable OH spending variance = AQ x (AP - SP) = 24,500 hrs. x ($10.75 - $12.00)/hr. = $30,625 F

The spending variance for fixed OH is the difference between: a.) budgeted fixed OH and fixed OH applied to production b.) actual fixed OH cost and budgeted fixed OH cost c.) actual fixed OH cost and the flexible budget for fixed OH based on inputs

b.) actual fixed OH cost and budgeted fixed OH cost c.) actual fixed OH cost and the flexible budget for fixed OH based on inputs ( The flexible budget for fixed OH is a lump-sum amount. Thus, it is true that the fixed OH spending variance is equal to the difference between actual fixed OH cost incurred during the period nd the flexible budget for fixed OH based on output (remembering that the budgeted amount is a lump sum)

Assume direct labor hours (DLHs) are used to assign variable OH cost to output. In this situation, there will be a variable OH spending variance in any given period if: a.) there is a variable OH efficiency variance for the period in question b.) actual spending on variable OH items, per unit of the cost-allocation base, differs from standard c.) there is a direct labor spending variance for the period in question d.) there is a direct labor rate (price) variance for the period in question

b.) actual spending on variable OH items, per unit of the cost-allocation base, differs from standard

Standard variable overhead cost is applied to production: a.) in "lump-sum" fashion, since these are indirect manufacturing cost b.) based on the standard variable overhead cost rate (SP) times the standard allowed quantity (SQ) of the specified allocation ase c) in a manner similar to the way direct labor and direct materials costs are assigned to outputs d.) based on the standard variable overhead rate (SP) times the actual actual quantity of the cost allocation base (AQ)

b.) based on the standard variable overhead cost rate (SP) times the standard allowed quantity (SQ) of the specified allocation ase c) in a manner similar to the way direct labor and direct materials costs are assigned to outputs

The variable OH efficiency variance: a.) is unlike the direct labor and variable OH spending variance because it is not controllable b.) is the responsibility of whoever is responsible for controlling the activity variable used to assign variable OH cost to outputs c.) is related to the direct labor efficiency variance if direct labor hours are used to apply variable OH cost to outputs d.) reflects efficiency or inefficiency in the use of the activity variable used to apply variable OH cost to outputs

b.) is the responsibility of whoever is responsible for controlling the activity variable used to assign variable OH cost to outputs c.) is related to the direct labor efficiency variance if direct labor hours are used to apply variable OH cost to outputs d.) reflects efficiency or inefficiency in the use of the activity variable used to apply variable OH cost to outputs

In a standard cost system, fixed overhead costs for the period are: a.) "Unitized" for cost-control purposes b.) treated as a lump sum amount for cost-control purposes c.) "unitized" for product-costing purposes d.) treated as a lump-sum amount for product-costing purposes

b.) treated as a lump sum amount for cost-control purposes c.) "unitized" for product-costing purposes

Assume DLH is used as the basis for assigning standard OH cost to outputs (products). In this case, the variable OH spending variance in any given period is equal to the difference between the: a.) actual variable OH cost incurred nd the standard variable OH cost applied to production b.) actual variable OH cost and budgeted variable OH based on standard DLHs allowed for the period's output c.) actual variable OH cost incurred and budgeted variable OH cost based on the actual DLHs worked during the period d.) budgeted variable OH based on inputs and standard variable OH applied to production

c.) actual variable OH cost incurred and budgeted variable OH cost based on the actual DLHs worked during the period

In traditional cost systems that rely on the use of a single activity variable for allocating variable OH costs to outputs, cost variances for variable OH must be interpreted carefully primarily because of: a.) difficulties associated with measuring the activity variable for the period b.) complications associated with collecting and summarizing actual cost data for the period c.) the imperfect relationship between variable OH costs and the chosen activity variable use to allocate costs

c.) the imperfect relationship between variable OH costs and the chosen activity variable use to allocate costs that is, it is virtually impossible that a single activity variable can adequately explains changes in total variable OH cost. A richer array of "cost drivers" would be needed to do this.

For Product-costing purposes, another name for the total OH variance is total: a.) static budget variance .) operating-income variance c.) under/overapplied OH d.) master budget variance

c.) under/overapplied OH

Another name for fixed manufacturing overhead is:

capacity-related manufacturing support cost

A company uses direct labor hours at the basis of assigning standard fixed OH cost to outputs. Lets SP= the standard fixed OH rate per DLH, AP= actual fixed OH rate per DLH, AQ = actual DLHs worked during the period, Denominator activity hours= the number of DLHs assumed when SP was developed, and SQ= the standard DLHs for the outputs of the period. The production volume variance is: a.) AP x (Denominator activity hours- SQ) b.) AP x (AQ-SQ) c.) SP x (AQ - SQ) d.) SP x (Denominator activity hours - SQ)

d.) SP x (Denominator activity hours - SQ)

the total variable OH cost variance for any given period can be broken down into a variable OH "____" variance and variable OH "_____" variance.

spending, efficiency


संबंधित स्टडी सेट्स

Gastrointestinal Disorders PrepU

View Set

2. How to create effective text ads

View Set

7.15.T - Lesson: Russia & Central Asia: Economy and Environment Review

View Set