Question :
Objective 8.5
1) Variable overhead costs:
A) never have any unused capacity
B) : 1217261
Objective 8.5
1) Variable overhead costs:
A) never have any unused capacity
B) have no production-volume variance
C) allocated are always the same as the flexible-budget amount
D) All of these answers are correct.
2) Fixed overhead costs:
A) never have any unused capacity
B) should be unitized for planning purposes
C) are unaffected by the degree of operating efficiency in a given budget period
D) Both A and B are correct.
3) Fixed overhead costs must be unitized for:
A) financial reporting purposes
B) planning purposes
C) calculating the production-volume variance
D) Both A and C are correct.
4) Generally Accepted Accounting Principles require that unitized fixed manufacturing costs be used for:
A) pricing decisions
B) costing decisions
C) external reporting
D) All of these answers are correct.
5) A nonfinancial measure of performance evaluation is:
A) increased sales
B) reducing distribution costs
C) energy used per machine-hour
D) All of these answers are correct.
6) Variance information regarding nonmanufacturing costs can be used to:
A) plan capacity in the service sector
B) control distribution costs in the retail sector
C) determine the most profitable services offered by a bank
D) All of these answers are correct.
7) Marshall Company uses a standard cost system. In April, $266,000 of variable manufacturing overhead costs were incurred and the flexible-budget amount for the month was $300,000. Which of the following variable manufacturing overhead entries would have been recorded for March?
A) Accounts Payable Control and other accounts300,000
Work-in-Process Control300,000
B) Variable Manufacturing Overhead Allocated300,000
Accounts Payable and other accounts300,000
C) Work-in-Process Control266,000
Accounts Payable Control and other accounts266,000
D) Variable Manufacturing Overhead Control266,000
Accounts Payable Control and other accounts266,000
8) Sanchez Company made the following journal entry:
Variable Manufacturing Overhead Allocated200,000
Variable Manufacturing Overhead Efficiency Variance 60,000
Variable Manufacturing Overhead Control250,000
Variable Manufacturing Overhead Spending Variance10,000
A) Sanchez overallocated variable manufacturing overhead.
B) A $10,000 favorable spending variance was recorded.
C) Work-in-Process is currently overstated.
D) This entry may be recorded yearly to provide timely feedback to managers.
9) 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
10) Andy’s Basketball Manufacturing Company reported:
Actual fixed overhead$500,000
Fixed manufacturing overhead spending variance$30,000 unfavorable
Fixed manufacturing production-volume variance$20,000 unfavorable
To isolate these variances at the end of the accounting period, Brandon would:
A) debit Fixed Manufacturing Overhead Allocated for $500,000
B) debit Fixed Manufacturing Overhead Spending Variance for $30,000
C) credit Fixed Manufacturing Production-Volume Variance for $20,000
D) credit Fixed Manufacturing Control Allocated for $450,000
