Accy 309 Final Study Chapter 7

Variance analysis for overhead normally focuses on a. volume variances for fixed overhead costs. b. the difference between budgeted and applied variable overhead. c. efficiency variances for machinery and indirect production costs. d. the controllable variance as a lump-sum amount.

efficiency variances for machinery and indirect production costs

Actual fixed overhead minus budgeted fixed overhead equals the a. fixed overhead volume variance. b. controllable variance. c. noncontrollable variance. d. fixed overhead spending variance.

fixed overhead spending variance

A variable overhead spending variance is caused by a. using more or fewer actual hours than the standard hours allowed for the production achieved. b. paying a higher/lower average actual overhead price per unit of the activity base than the standard price allowed per unit of the activity base. c. larger/smaller waste and shrinkage associated with the resources involved than expected. d. both b and c are causes.

both b and c are causes

Fixed overhead costs are a. mostly incurred to provide the capacity to produce and are best controlled on a total basis at the time they are originally negotiated. b. best controlled on a unit-by-unit basis of products produced. c. constant on a per-unit basis at all different activity levels within the relevant range. d. best controlled as to spending during the production process.

mostly incurred to provide the capacity to produce and are best controlled on a total basis at the time they are originally negotiated

An operations flow document a. tracks the network of control points from receipt of a customer's order through the delivery of the finished product. b. specifies tasks to make a unit and the times allowed for each task. c. charts the shortest path by which to arrange machines for completing products. d. tracks the cost and quantity of material through an operation.

specifies tasks to make a unit and the times allowed for each task

A company would most likely have an unfavorable labor rate variance and a favorable labor efficiency variance if a. the mix of workers used in the production process was less experienced than the normal mix. b. the mix of workers used in the production process was more experienced than the normal mix. c. workers from another part of the plant were used due to an extra heavy production schedule. d. the purchasing agent acquired very high quality material that resulted in less spoilage.

the mix of workers used in the production process was more experienced than the normal mix

A primary purpose of using a standard cost system is a. to make things easier for managers in the production facility. b. to provide a distinct measure of cost control. c. to minimize the cost per unit of production. d. b and c are correct

to provide a distinct measure of cost control.