Chapter 8

) Lancelot Corporation manufactures tennis gear and uses budgeted machine-hours to allocate variable manufacturing overhead. The following information relates to the company's manufacturing overhead data: Budgeted output units 3,000 units Budgeted machine-hours 15,000 hours Budgeted variable manufacturing overhead costs for 3,000 units $180,000 Actual output units produced 3,350 units Actual machine-hours used 14,700 hours Actual variable manufacturing overhead costs $250,000 What is the flexible-budget variance for variable manufacturing overhead? A) $49,000 unfavorable B) $49,000 favorable C) $70,000 unfavorable D) $70,000 favorable

A) $49,000 unfavorable Explanation: Budgeted machine hours per unit = 15,000 ÷ 3,000 = 5 Budgeted machine hours allowed for 3,350 units = 3,350 × 5 = 16,750 Budgeted variable overhead rate per machine hour = $180,000 ÷ 15,000 = $12.00 Flexible-budget amount = 16,750 × $12.00 = $201,000 Flexible-budget variance = $250,000 − $201,000 = $49,000 U

Russo Corporation manufactured 17,000 air conditioners during November. The overhead cost-allocation rate is $35.50 per machine-hour. The following variable overhead data pertain to November: Actual Budgeted Production 17,000 units 19,000 units Machine-hours 8,325 hours 9,500 hours Variable overhead cost per machine-hour: $35.00 $35.50 What is the variable overhead efficiency variance? A) $6,212.50 favorable B) $6,212.50 unfavorable C) $4,750.00 favorable D) $4,750.00 unfavorable

A) $6,212.50 favorable Explanation: [8,325 - (17,000 × 9,500/19,000) mh] × $35.50 = $6,212.50 favorable

Skizone Company's 4-Variance Analysis: Spending Variance Efficiency Variance Production-Volume Variance Variable overhead $6,900 F $11,000 U No variance Fixed overhead (a) No variance $45,000 U Which of the following statements is true of Skizone's overhead variances? A) Budgeted variable overhead rate is higher than actual variable overhead rate. B) Static fixed overhead amount is higher than flexible fixed overhead amount. C) Budgeted variable overhead rate is lower than actual variable overhead rate. D) Static fixed overhead amount is lower than flexible fixed overhead amount.

A) Budgeted variable overhead rate is higher than actual variable overhead rate.

When variable overhead spending variance is unfavorable, it can be safely assumed that ________. A) actual rate per unit of cost-allocation base is higher than budgeted rate B) actual quantity of cost-allocation base used is higher than budgeted quantity C) actual rate per unit of cost-allocation base is lower than budgeted rate D) actual quantity of cost-allocation base used is lower than budgeted quantity

A) actual rate per unit of cost-allocation base is higher than budgeted rate

The variable overhead spending variance measures the difference between ________, multiplied by the actual quantity of variable overhead cost-allocation base used. A) the actual variable overhead cost per unit and the budgeted variable overhead cost per unit B) the standard variable overhead cost rate and the budgeted variable overhead cost rate C) the actual variable overhead cost per unit and the budgeted fixed overhead cost per unit D) the actual quantity per unit and the budgeted quantity per unit

A) the actual variable overhead cost per unit and the budgeted variable overhead cost per unit

) Zitrik Corporation manufactured 130,000 buckets during February. The variable overhead cost-allocation base is $5.30 per machine-hour. The following variable overhead data pertain to February: Actual Budgeted Production 130,000 units 130,000 units Machine-hours 9,500 hours 9,000 hours Variable overhead cost per machine-hour $5.35 $5.30 What is the variable overhead efficiency variance? A) $2,650 unfavorable B) $2,675 favorable C) $2,650 favorable D) $2,675 unfavorable.

A) $2,650 unfavorable Explanation: Variable overhead efficiency variance = [9,500 − 9,000] × $5.30 = $2,650 unfavorable

Cold Products Corporation manufactured 32,000 ice chests during September. The variable overhead cost-allocation base is $13.45 per machine-hour. The following variable overhead data pertain to September: Actual Budgeted Production 32,000 units 26,000 units Machine-hours 15,200 hours 10,800 hours Variable overhead cost per machine-hour: $13.25 $13.45 What is the variable overhead spending variance? A) $3,040 favorable B) $25,658 unfavorable C) $22,618 unfavorable D) $59,180 unfavorable

A) $3,040 favorable Explanation: ($13.25 - $13.45) × 15,200 mh = $3,040 favorable

Majestic Corporation manufactures wheel barrows and uses budgeted machine hours to allocate variable manufacturing overhead. The following information relates to the company's manufacturing overhead data: Budgeted output units 43,500 units Budgeted machine-hours 17,400 hours Budgeted variable manufacturing overhead costs for 43,500 units $382,800 Actual output units produced 45,500 units Actual machine-hours used 14,500 hours Actual variable manufacturing overhead costs $435,709 What is the flexible-budget variance for variable manufacturing overhead? A) $35,309 unfavorable B) $52,909 unfavorable C) $35,309 favorable D) $52,909 favorable

A) $35,309 unfavorable Explanation: Budgeted machine hours per unit = 17,400 ÷ 43,500 = 0.4 Budgeted machine hours allowed for 45,500 units = 45,500 × 0.4 = 18,200 Budgeted variable overhead rate per machine hour = $382,800 ÷ 17,400 = $22.00 Flexible-budget amount = 18,200 × $22.00 = $400,400 Flexible-budget variance = $435,709 − $400,400 = $35,309 unfavorable

Cold Products Corporation manufactured 27,000 ice chests during September. The variable overhead cost-allocation base is $15.00 per machine-hour. The following variable overhead data pertain to September: Actual Budgeted Production 27,000 units 20,000 units Machine-hours 21,600 hours 6,000 hours Variable overhead cost per machine-hour: $14.75 $15.00 What is the flexible-budget amount? A) $90,000 B) $121,500 C) $318,600 D) $324,000

B) $121,500 Explanation: 27,000 × (6,000/20,000) × $15.00 = $121,500

Castleton Corporation manufactured 36,000 units during March. The following fixed overhead data relates to March: Actual Static Budget Production 36,000 units 34,000 units Machine-hours 6,960 hours 6,800 hours Fixed overhead costs for March $164,700 $156,400 What is the flexible-budget amount? A) $170,379.31 B) $156,400.00 C) $165,600.00 D) $164,700.00

B) $156,400.00 Explanation: $156,400, the same lump sum as the static budget

Radon Corporation manufactured 37,500 units during March. The following fixed overhead data pertain to March: Actual Static Budget Production 37,500 units 34,000 units Machine-hours 10,375 hours 10,200 hours Fixed overhead costs for March $213,200 $204,000 What is the fixed overhead production-volume variance? A) $9,200.00 unfavorable B) $21,000.00 favorable C) $21,000.00 unfavorable D) $9,200.00 favorable

B) $21,000.00 favorable Explanation: Fixed cost per machine hour = $204,000 ÷ 10,200 = $20 Machine hours per unit = 10,200 ÷ 34,000 = 0.3 Fixed cost per unit = $20 × 0.3 = $6.00 Fixed overhead allocated = 37,500 × $6.00 = $225,000.00 Fixed overhead production-volume variance = $204,000 − $225,000.00 =$21,000.00 F

Lancelot Corporation manufactures tennis gear and uses budgeted machine-hours to allocate variable manufacturing overhead. The following information relates to the company's manufacturing overhead data: Budgeted output units 8,000 units Budgeted machine-hours 24,000 hours Budgeted variable manufacturing overhead costs for 8,000 units $288,000 Actual output units produced 8,500 units Actual machine-hours used 23,750 hours Actual variable manufacturing overhead costs $250,000 What is the flexible-budget amount for variable manufacturing overhead? A) $250,000 B) $306,000 C) $288,000 D) $235,294

B) $306,000 Explanation: Budgeted machine hours per unit = 24,000 ÷ 8,000 = 3 Budgeted machine hours allowed for 8,500 units = 8,500 × 3 = 25,500 Budgeted variable overhead rate per machine hour = $288,000 ÷ 24,000 = $12.00 Flexible-budget amount = 25,500 × $12.00 = $306,000

) Russo Corporation manufactured 15,000 air conditioners during November. The overhead cost-allocation base is $33.25 per machine-hour. The following variable overhead data pertain to November: Actual Budgeted Production 15,000 units 18,000 units Machine-hours 13,275 hours 14,400 hours Variable overhead cost per machine-hour: $33.00 $33.25 What is the flexible-budget amount? A) $441,394 B) $399,000 C) $396,000 D) $475,200

B) $399,000 Explanation: 15,000 x (14,400 / 18,000) x 33.25 = 399,000

Davidson Corporation manufactured 53,400 units during September. The following fixed overhead data relates to September: Actual Static Budget Production 53,400 units 53,000 units Machine-hours 1,960 hours 2,120 hours Fixed overhead costs for September $86,520 $86,920 What is the fixed overhead spending variance? A) $1,056 unfavorable B) $400 favorable C) $400 unfavorable D) $1,056 favorable

B) $400 favorable

Majestic Corporation manufactures wheel barrows and uses budgeted machine hours to allocate variable manufacturing overhead. The following information relates to the company's manufacturing overhead data: Budgeted output units 28,475 units Budgeted machine-hours 17,085 hours Budgeted variable manufacturing overhead costs for 28,475 units $358,785 Actual output units produced 32,475 units Actual machine-hours used 15,000 hours Actual variable manufacturing overhead costs $384,060 What is the flexible-budget amount for variable manufacturing overhead? A) $358,785 B) $409,185 C) $384,060 D) $336,755`

B) $409,185 Explanation: Budgeted machine hours per unit = 17,085 ÷ 28,475 = 0.6 Budgeted machine hours allowed for 32,475 units = 32,475 × 0.6= 19,485 Budgeted variable overhead rate per machine hour = $358,785 ÷ 17,085 = $21.00 Flexible-budget amount = 19,485 × $21.00 = $409,185

Zitrik Corporation manufactured 90,000 buckets during February. The variable overhead cost-allocation base is $5.00 per machine-hour. The following variable overhead data pertain to February: Actual Budgeted Production 90,000 units 90,000 units Machine-hours 10,800 hours 10,000 hours Variable overhead cost per machine-hour $5.05 $5.00 What is the flexible-budget amount? A) $54,000 B) $50,000 C) $50,500 D) $54,540

B) $50,000 Explanation: Flexible-budget amount = 10,000 mh × $5.00 = $50,000

Variances Spending Efficiency Volume Variable manufacturing overhead $7,300 F $35,000 U (B) Fixed manufacturing overhead $28,300 U (A) $90,000 U The total production-volume variance should be ________. A) $90,000 F B) $90,000 U C) $118,300 F D) $118,300 U

B) $90,000 U Explanation: Total production-volume variance = $90,000 U + 0 = $90,000

All of the following are possible causes of actual machine hours exceeding budgeted machine hours except: A) Poor scheduling B) Actual leasing costs for the machine were higher than expected C) Machines were not maintained in good operating condition D) Budgeted standards were set to tight

B) Actual leasing costs for the machine were higher than expected

Fixed overhead costs include ________. A) the cost of sales commissions B) Leasing of machinery used in a factory C) energy costs D) indirect materials

B) Leasing of machinery used in a factory

When variances are immaterial, which of the following statements is true of the journal entry to write-off the variable overhead variance accounts? A) Cost of Goods Sold account will always be debited. B) Unfavorable efficiency variance will be credited. C) Favorable efficiency variance will be credited. D) Cost of Goods Sold account will always be credited.

B) Unfavorable efficiency variance will be credited.

Which of the following statements is true of variable overhead costs? A) Variable overhead costs always have unused capacity. B) Variable overhead costs have no production-volume variance. C) Variable overhead costs have no spending variance. D) Variable overhead costs have no efficiency variance

B) Variable overhead costs have no production-volume variance.

Which of the following journal entries is used to record fixed overhead costs allocated? A) Fixed Overhead Allocated Work-in-Process Control B) Work-in-Process Control Fixed Overhead Allocated C) Fixed Overhead Control Work-in-Process Control D) Fixed Overhead Allocated Fixed Overhead Control

B) Work-in-Process Control Fixed Overhead Allocated

For fixed manufacturing overhead, there is no ________. A) spending variance B) efficiency variance C) flexible-budget variance D) production-volume variance

B) efficiency variance

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) the actual variable manufacturing overhead exceeded the flexible-budget amount by $5,000

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) the price of fixed overhead items cost more than budgeted

The variable overhead efficiency variance is computed ________ and interpreted ________ the direct-cost efficiency variance. A) the same as; the same as B) the same as; differently than C) differently than; the same as D) differently than; differently than

B) the same as; differently than

) Zitrik Corporation manufactured 110,000 buckets during February. The variable overhead cost-allocation base is $5.45 per machine-hour. The following variable overhead data pertain to February: Actual Budgeted Production 110,000 units 110,000 units Machine-hours 10,500 hours 10,000 hours Variable overhead cost per machine-hour $5.55 $5.45 What is the variable overhead spending variance? A) $1,050 favorable B) $1,000 unfavorable C) $1,050 unfavorable D) $1,000 favorable

C) $1,050 unfavorable Explanation: Variable overhead spending variance = ($5.55 − $5.45) × 10,500 mh = $1,050 unfavorable

) Outdoor Gear Corporation manufactured 1,000 coolers during October. The following variable overhead data relates to October: Variable overhead spending variance $1,300 Unfavorable Variable overhead efficiency variance $182 Unfavorable Budgeted machine hours allowed for actual output 608 machine hours Actual cost per machine hour $28 Budgeted cost per machine hour $26 Calculate the variable overhead flexible-budget variance. A) $1,118 unfavorable B) $1,118 favorable C) $1,482 unfavorable D) $1,482 favorable

C) $1,482 unfavorable Explanation: Variable overhead flexible-budget variance = $1,300 (U) + $182 (U) = $1,482 (U)

Davidson Corporation manufactured 52,400 units during September. The following fixed overhead data relates to September: Actual Static Budget Production 52,400 units 52,000 units Machine-hours 2,485 hours 2,600 hours Fixed overhead costs for September $108,900 $109,200 What is the flexible-budget amount? A) $108,900 B) $110,040 C) $109,200 D) $52,400

C) $109,200

Lazy Guy Corporation manufactured 4,000 chairs during June. The following variable overhead data relates to June: Budgeted variable overhead cost per unit $10.00 Actual variable manufacturing overhead cost $49,000 Flexible-budget amount for variable manufacturing overhead $46,800 Variable manufacturing overhead efficiency variance $720 unfavorable What is the variable overhead flexible-budget variance? A) $2,200 favorable B) $1,480 favorable C) $2,200 unfavorable D) $1,480 unfavorable

C) $2,200 unfavorable

Variances Spending Efficiency Volume Variable manufacturing overhead $7,200 F $38,000 U (B) Fixed manufacturing overhead $27,800 U (A) $81,000 U In a combined 3-variance analysis, the total spending variance would be ________. A) $20,600 F B) $30,800 U C) $20,600 U D) $45,200 F

C) $20,600 U Explanation: Spending variance = $7,200 F + $27,800 U = $20,600 U

Cold Products Corporation manufactured 34,000 ice chests during September. The variable overhead cost-allocation base is $14.50 per machine-hour. The following variable overhead data pertain to September: Actual Budgeted Production 34,000 units 30,000 units Machine-hours 15,200 hours 10,800 hours Variable overhead cost per machine-hour: $14.00 $14.50 What is the actual variable overhead cost? A) $156,600 B) $177,480 C) $212,800 D) $220,400

C) $212,800 Explanation: 15,200 mh × $14.00 = $212,800

Raposa, Inc., produces a special line of plastic toy racing cars. Raposa, Inc., produces the cars in batches. To manufacture a batch of the cars, Raposa, Inc., must set up the machines and molds. Setup costs are batch-level costs because they are associated with batches rather than individual units of products. A separate Setup Department is responsible for setting up machines and molds for different styles of car. Setup overhead costs consist of some costs that are variable and some costs that are fixed with respect to the number of setup-hours. The following information pertains to June 2015: Actual Static-budget Amounts Amounts Units produced and sold 15,700 11,950 Batch size (number of units per batch) 325 265 Setup-hours per batch 3 4.25 Variable overhead cost per setup-hour $48 $45 Total fixed setup overhead costs $11,310 $9,010 Calculate the efficiency variance for variable overhead setup costs. (Round all intermediary calculations two decimal places and your final answer to the nearest whole number.) A) $4,810 unfavorable B) $435 unfavorable C) $4,810 favorable D) $435 favorable

C) $4,810 favorable Explanation: {[(15,700/ 325) × 3] - [(15,700 / 265) × 4.25] } × $45 = $4,810 (F)

Hockey Accessories Corporation manufactured 22,400 duffle bags during March. The following fixed overhead data pertain to March: Actual Static Budget Production 22,400 units 23,000 units Machine-hours 10,450 hours 11,500 hours Fixed overhead cost for March $451,700 $460,000 What is the flexible-budget amount? A) $451,700 B) $472,321 C) $460,000 D) $448,000

C) $460,000 Explanation: $460,000, the same lump sum as the static budget

Zitrik Corporation manufactured 90,000 buckets during February. The variable overhead cost-allocation base is $5.10 per machine-hour. The following variable overhead data pertain to February: Actual Budgeted Production 90,000 units 90,000 units Machine-hours 9,800 hours 9,000 hours Variable overhead cost per machine-hour $5.25 $5.10 What is the actual variable overhead cost? A) $472,500 B) $459,000 C) $51,450 D) $49,980

C) $51,450 Explanation: Actual variable overhead cost = 9,800 mh × $5.25 = $51,450

) Castleton Corporation manufactured 36,500 units during March. The following fixed overhead data relates to March: Actual Static Budget Production 36,500 units 35,000 units Machine-hours 5,400 hours 5,250 hours Fixed overhead costs for March $139,510 $131,250 What is the fixed overhead spending variance? A) $2,635.00 unfavorable B) $8,260.00 favorable C) $8,260.00 unfavorable D) $2,635.00 favorable

C) $8,260.00 unfavorable Explanation: Fixed overhead spending variance = $139,510 actual costs − $131,250 budgeted cost = $8,260.00 unfavorable

Radon Corporation manufactured 38,100 units during March. The following fixed overhead data pertain to March: Actual Static Budget Production 38,100 units 35,000 units Machine-hours 14,200 hours 14,000 hours Fixed overhead costs for March $289,100 $280,000 What is the fixed overhead spending variance? A) $24,800.00 favorable B) $9,100.00 favorable C) $9,100.00 unfavorable D) $24,800.00 unfavorable

C) $9,100.00 unfavorable Explanation: Fixed overhead spending variance = $289,100 − $280,000 = $9,100.00 unfavorable

Skizone Company's 4-Variance Analysis: Spending Variance Efficiency Variance Production-Volume Variance Variable overhead $6,900 F $16,000 U No variance Fixed overhead (a) No variance $44,000 U If Skizone's combined 4-Variance Analysis shows an unfavorable spending variance of $2,900, what is the fixed overhead spending variance (a)? A) $9,800 favorable B) $4,000 unfavorable C) $9,800 unfavorable D) $4,000 favorable

C) $9,800 unfavorable Explanation: Fixed overhead spending variance = $2,900 U − $6,900 F = $9,800 U

Which of the following statements is true of fixed overhead cost variances? A) The difference between actual costs and flexible budget costs will give the production volume variance. B) The difference between actual costs and static budget costs will give the production volume variance. C) The difference between flexible budget costs and allocated overhead costs will give the production volume variance. D) The difference between static budget costs and flexible budget costs will give the production volume variance.

C) The difference between flexible budget costs and allocated overhead costs will give the production volume variance.

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) a decline in the cost of energy

2) The amount reported for fixed overhead on the static budget is also reported ________. A) as actual fixed costs B) as allocated fixed overhead costs C) as flexible budget costs D) as committed variable costs

C) as flexible budget costs

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) choosing the appropriate level of capacity

In flexible budgets the costs that are not "flexed" because they remain the same within a relevant range of activity (such as sales or output) are called ________. A) total overhead costs B) total budgeted costs C) fixed costs D) variable costs

C) fixed costs

When fixed overhead spending variance is unfavorable, it can be safely assumed that ________. A) flexible budget amount is higher than actual costs incurred B) fixed overhead allocated for actual output is lower than actual costs incurred C) flexible budget amount is lower than actual costs incurred D) fixed overhead allocated for actual output is higher than actual costs incurred

C) flexible budget amount is lower than actual costs incurred

Fixed overhead costs ________. A) never have any unused capacity B) have no spending variance C) have no efficiency variance D) have no production-volume variance

C) have no efficiency variance

Effective planning of variable overhead costs includes ________. A) choosing the appropriate level of investment B) eliminating value-added costs C) redesigning products or processes to use fewer resources D) reorganizing management structure

C) redesigning products or processes to use fewer resources

The variable overhead flexible-budget variance can be further explained by calculating 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) spending variance and the efficiency variance

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 D) favorable production-volume variance

C) unfavorable fixed overhead flexible-budget variance

Russo Corporation manufactured 21,000 air conditioners during November. The overhead cost-allocation base is $34.25 per machine-hour. The following variable overhead data pertain to November: Actual Budgeted Production 21,000 units 24,000 units Machine-hours 13,300 hours 14,400 hours Variable overhead cost per machine-hour: $34.00 $34.25 What is the variable overhead spending variance? A) $3,600.00 unfavorable B) $3,325.00 unfavorable C) $3,600.00 favorable D) $3,325.00 favorable

D) $3,325.00 favorable Explanation: ($34.00- $34.25) × 13,300 mh = $3,325.00 favorable

Lazy Guy Corporation manufactured 6,000 chairs during June. The following variable overhead data relates to June: Budgeted variable overhead cost per unit $10.00 Actual variable manufacturing overhead cost $52,800 Flexible-budget amount for variable manufacturing overhead $46,900 Variable manufacturing overhead efficiency variance $790 unfavorable What is the variable overhead spending variance? A) $5,110 favorable B) $5,900 favorable C) $5,900 unfavorable D) $5,110 unfavorable

D) $5,110 unfavorable Explanation: Variable overhead flexible-budget variance = $52,800 - $46,900 = $5,900 (U) Variable overhead spending variance = $5,900 (U) − $790 (U) = $5,110 (U)

Hockey Accessories Corporation manufactured 21,400 duffle bags during March. The following fixed overhead data pertain to March: Actual Static Budget Production 21,400 units 22,000 units Machine-hours 3,400 hours 4,400 hours Fixed overhead cost for March $176,300 $184,800 What is the amount of fixed overhead spending variance? A) $8,500 unfavorable B) $3,460 favorable C) $3,460 unfavorable D) $8,500 favorable

D) $8,500 favorable Explanation: Fixed overhead spending variance = $176,300 actual costs − $184,800 budgeted cost = $8,500 favorable

Variances Spending Efficiency Volume Variable manufacturing overhead $7,400 F $33,000 U (B) Fixed manufacturing overhead $28,400 U (A) $82,000 U In the above table, the amounts for (A) and (B), respectively, are ________. A) $25,600 U; $115,000 U B) $25,600 U; Zero C) Zero; $115,000 U D) Zero; Zero

D) Zero; Zero

Most of the decisions determining the level of fixed overhead costs to be incurred will be made ________. A) by the end of a budget period B) by the middle of a budget period C) on a day-to-day ongoing basis D) at the start of a budget period

D) at the start of a budget period

Which of the following is the correct mathematical expression to calculate the fixed overhead production-volume variance? A) static-budget amount − flexible-budget amount B) flexible-budget amount − actual costs incurred C) actual costs incurred − fixed overhead allocated for actual output D) budgeted fixed overhead − fixed overhead allocated for actual output

D) budgeted fixed overhead − fixed overhead allocated for actual output

Effective planning of fixed overhead costs includes ________. A) planning day-to-day operational decisions B) eliminating value-added costs C) determining which products are to be produced D) choosing the appropriate level of investment in productive assets

D) choosing the appropriate level of investment in productive assets