Cost Accounting - Ch.16

The accounting method that assigns costs to cost objects at predetermined amounts is called _____ _____.

Blank 1: standard Blank 2: costing

Quantities of each input used to produce a unit of output along with the budgeted unit price for each input are shown on the _____ _____ _____.

standard cost sheet

A budget prepared for only one level of anticipated activity is known as a(n) ______ budget.

static

When standard overhead costs are charged to production during the period, ______

the credit entry is to an overhead applied account

There is no fixed overhead efficiency variance when a company uses _____ costing.

variable

There is no fixed overhead efficiency variance when a company uses ______ costing.

variable

A company applies overhead on the basis of direct labor hours. The manager held accountable for the variable overhead efficiency variance is generally the same manager who is responsible for the ______.

direct labor efficiency variance

The production department is generally responsible for a direct materials _____ variance.

efficiency

The variable overhead efficiency variance is related to ______.

efficiency in using the base on which overhead is applied

On a standard cost sheet, overhead is ______.

expressed in terms of the burden rate

Details about the differences between budgeted earnings and actual earnings is shown on the _____ _____ analysis.

profit variance

Responsibility for the direct materials price variance is generally assigned to the ______ department.

purchasing

The difference between operating profits in the master budget and operating profits in the flexible budget is called a(n) _____ _____ variance.

sale activity

Regarding fixed overhead variances, ______

there is no efficiency variance a production volume variance only occurs when fixed costs are unitized

The sum of the price and the efficiency variances equals the _____ _____ variance.

total cost

if less overhead is applied that was budgeted, the production volume variance is ______.

unfavorable

The decomposition of the profit variance into revenue and cost components ______.

is more informative that the simple profit variance does not help managers determine how to incorporate changes

Budgeted fixed manufacturing cost was $890,000 for 40,000 units or 100,000 hours, Actual fixed overhead totaled $910,000. The standard fixed production overhead cost per unit was $

22.25 890000/40000

The price variance for fixed overhead is also called a(n) _____ or _____ variance.

Blank 1: spending Blank 2: budget

True or false: Unfavorable variances are always bad.

False

True or false: The variable overhead price variance can contain both price and efficiency items.

True

An additional fixed manufacturing overhead variance is computed when a company uses ______ costing.

absorption

A production volume variance can occur with ______.

absorption costing only

Within the relevant range of activity, variance analysis treats fixed and variable production costs ______.

differently

A difference between actual and standard labor costs per hour results in a direct labor _____ variance.

price

Given applied fixed overhead of $156,400 and actual fixed overhead of $155,000, the standard cost journal entry to record actual fixed overhead costs would include a (debit/credit) _____ credit , to Fixed Overhead (Actual/Applied) _____ , for $_____ 25,000 , Incorrect Unavailable.

Blank 1: debit Blank 2: Actual Blank 3: 155,000 or 155000

The number that should be used to evaluate production performance is the variance from the _____ budget.

Blank 1: flexible

A budget prepared for various levels of anticipated activity is called a(n) _____ budget.

Blank 1: flexible or flex

For each variable manufacturing input both a(n) _____ variance and a(n) _____ variance can be computed.

Blank 1: price Blank 2: efficiency

The four-way analysis of overhead variances computes _____ and efficiency variances for _____ overhead and _____ price and volume for _____ overhead.

Blank 1: price Blank 2: variable Blank 3: production Blank 4: fixed

Capacity variance, idle capacity variance and denominator variances are all names for the _____ _____ variance.

Blank 1: production Blank 2: volume

The difference between the flexible budget and the actual fixed overhead is a price variance that is also called a(n) _____ or _____ variance.

Blank 1: spending Blank 2: budget

Which of the following statements is correct? Multiple select question. When doing variance analysis, fixed and variable production costs are treated the same. Budgeted fixed overhead is the same in both the master and flexible budget. Budgeted variable overhead is the same in both the master and flexible budget. When doing variance analysis, fixed and variable production costs are treated differently.

Budgeted fixed overhead is the same in both the master and flexible budget. When doing variance analysis, fixed and variable production costs are treated differently.

When a company uses a standard cost system, the entry to record fixed overhead applied to production includes a debit to Work-in-Process Inventory and a credit to ______.

Fixed Overhead (Applied)

Which of the following statements is correct? Multiple choice question. Using inexperienced workers should result in an unfavorable labor price variance. If wages rates used to set standards are the same as those in the union contract, labor price variances will not occur. Paying workers more than the standard wage allowed in the budget will lead to a favorable labor price variance.

If wages rates used to set standards are the same as those in the union contract, labor price variances will not occur.

Which of the following statements are correct? Multiple select question. Production performance should be evaluated based on the flexible budget. A sales activity variance impacts fixed production costs. A sales activity variance impacts both variable and fixed production costs. A sales activity variance impacts variable production costs. Production performance should be evaluated based on the master budget.

Production performance should be evaluated based on the flexible budget. A sales activity variance impacts variable production costs.

The sales activity variance highlights differences due to ______.

changes in the number of units sold only

Budgeted fixed manufacturing cost was $890,000 for 40,000 units or 100,000 hours, Actual fixed overhead totaled $910,000. The standard fixed production overhead cost per direct-labor hour was $

8.90 890,000/100,000

Which of the following statements are correct? Multiple select question. For purposes of variance analysis, fixed costs are treated like product costs. A fixed production cost variance is the difference between actual and budgeted costs. Fixed costs are only affected by activity levels within the relevant range. The flexible budget fixed costs equal the master budget's fixed costs.

A fixed production cost variance is the difference between actual and budgeted costs. The flexible budget fixed costs equal the master budget's fixed costs.

True or false: A direct labor efficiency variance is always the responsibility of the production department manager.

False

True or false: Decomposing the profit variance into revenue and cost components provides information that is useful for control purposes.

False

True or false: The variable overhead efficiency variance measures the efficient use of resources such as electricity.

False

A profit variance analysis compares ______.

actual results with both the flexible budget and master budget

Standard costing ______.

allows Work-in-Process entries to be made before actual costs are known

Unfavorable direct labor efficiency variances can be caused by ______.

faulty equipment poorly trained workers scheduling issues

The cash budget and budgeted balance sheet are examples of _____ budgets.

financial

The difference between actual and budgeted costs is the _____ production cost variance.

fixed

The production volume variance applies to ______.

fixed costs only

A budget that indicates revenues, cost, and profits at different levels of activity is known as a(n) ______ budget.

flexible

The production volume variance ______.

is unique to absorption costing occurs because fixed overhead is allocated on a per unit basis

A production volume variance occurs if the ______.

number of units produced differs from the number used to estimate fixed cost per unit

When computing a flexible budget and variances, ______ marketing and administrative costs are expected to change.

only variable

When using standard costing journal entries, ______.

overhead costs may be charged to production before actual costs are known variances are the difference between overhead applied and actual costs actual costs are recorded in various accounts

The difference between actual costs and budgeted costs due to changes in the cost of inputs to a production process or other activity is a(n) ______ variance.

price

The purchasing department is generally responsible for the direct materials _____ variance.

price

Under the four-way analysis of overhead variances, ______ variances are computed for both fixed and variable overhead.

price

When fixed manufacturing costs are treated as ______ costs, an additional variance is computed.

product

Responsibility for the direct materials efficiency variances are generally assigned to the ______ department.

production

When computing variances, marketing and administrative costs are treated like ______ costs.

production