Question : Objective 8.4 1) When machine-hours used as an overhead cost-allocation base : 1212151

 

Objective 8.4

 

1) 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

 

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

 

3) 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

 

4) Which of the following is the correct mathematical expression to calculate the fixed overhead spending variance?

A) Static-budget amount — Flexible-budget amount

B) Flexible-budget amount — Actual costs incurred

C) Static-budget amount — Fixed overhead allocated for actual output

D) Flexible-budget amount — Fixed overhead allocated for actual output

 

5) For fixed manufacturing overhead, there is no ________.

A) spending variance

B) efficiency variance

C) flexible-budget variance

D) production-volume variance

6) Luke’s Football Manufacturing Company reported:

Actual fixed overhead$400,000

Fixed manufacturing overhead spending variance$10,000 favorable

Fixed manufacturing production-volume variance$15,000 unfavorable

 

To isolate these variances at the end of the accounting period, John would debit Fixed Manufacturing Overhead Allocated for  ________.

A) $390,000

B) $395,000

C) $400,000

D) $405,000

 

Use the below information to answer the following questions:

 

Bekits Corporation manufactured 37,500 grooming kits for horses during March. The following fixed overhead data relates to March:

 

ActualStatic Budget

Production37,500 units36,000 units

Machine-hours6,100 hours5,940 hours

Fixed overhead costs for March$133,000$124,740

 

7) What is the flexible-budget amount?

A) $134,375.50

B) $124,740.00

C) $129,937.50

D) $133,000.00

 

8) What is the amount of fixed overhead allocated to production?

A) $134,375.50

B) $124,740.00

C) $133,000.00

D) $129,937.50

9) What is the fixed overhead spending variance?

A) $3,062.5 unfavorable

B) $8,260 favorable

C) $8,260 unfavorable

D) $3,062.5 favorable

 

Answer the following questions using the information below:

 

Deocomfort Corporation manufactured 55,500 door jambs during September. The following fixed overhead data relates to September:

 

ActualStatic Budget

Production55,500 units55,000 units

Machine-hours985 hours1,100 hours

Fixed overhead costs for September$50,500$50,600

 

10) What is the flexible-budget amount?

A) $50,500

B) $51,060

C) $50,600

D) $55,500