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| 1 | |
When a flexible budget is used, an increase in the actual production level within a range of activity would: |
| | A) | increase the variable cost per unit and the total fixed costs |
| | B) | increase the total variable costs and not change the total fixed costs |
| | C) | increase the total fixed costs and decrease the variable cost per unit |
| | D) | decrease the variable cost per unit and decrease the total fixed costs |
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| 2 | |
Which of the following statements about fixed overhead is true? |
| | A) | When undertaking flexible budgeting, fixed overhead is treated as a variable cost. |
| | B) | The total flexible budget fixed overhead will never equal the total static budget fixed overhead. |
| | C) | Total applied fixed overhead is always equal to the total static budget fixed overhead. |
| | D) | When fixed overhead is applied to work in process for product costing purposes, it is treated as if it is a variable cost. |
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| 3 | |
A flexible budget for Hawthorn Company for 10 000 hours is: Variable overhead | $100000 | Fixed overhead | $20000 | Total overhead | $120000 |
The total overhead costs for 15 000 hours are: |
| | A) | $120 000 |
| | B) | $180 000 |
| | C) | $170 000 |
| | D) | $150 000 |
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| 4 | |
The Oakleigh Company has the following information available for its production facility for the month of July. The budgeted activity level for fixed manufacturing overhead was estimated to be 48 000 machine hours for the production cycle. Actual machine hours for the period were 50 000, which resulted in the completion of 9900 units. Material purchased (210 000 items) | $819 000 | Material quantity variance | $39 600 U | Actual labour cost (15 000 hours) | $102 000 | Machine hours used | 50 000 machine hours | Variable overhead spending variance | $2 500 U | Actual fixed manufacturing overhead | $150 000 |
Oakleigh’s standard costs per unit are as follows: Direct material | 20 components @ $4 per item | Direct labour | 1.5 hours @ $6 per hour | Variable overhead (applied on machine hour basis) | 4.8 hours @ $2.50 per hour | Fixed overhead (applied on machine hour basis) | 4.8 hours @ $3 per hour |
The actual variable overhead incurred was: |
| | A) | $118 800 |
| | B) | $125 000 |
| | C) | $127 500 |
| | D) | $122 500 |
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| 5 | |
The Oakleigh Company has the following information available for its production facility for the month of July. The budgeted activity level for fixed manufacturing overhead was estimated to be 48 000 machine hours for the production cycle. Actual machine hours for the period were 50 000, which resulted in the completion of 9900 units. Material purchased (210 000 items) | $819 000 | Material quantity variance | $39 600 U | Actual labour cost (15 000 hours) | $102 000 | Machine hours used | 50 000 machine hours | Variable overhead spending variance | $2 500 U | Actual fixed manufacturing overhead | $150 000 |
Oakleigh’s standard costs per unit are as follows: Direct material | 20 components @ $4 per item | Direct labour | 1.5 hours @ $6 per hour | Variable overhead (applied on machine hour basis) | 4.8 hours @ $2.50 per hour | Fixed overhead (applied on machine hour basis) | 4.8 hours @ $3 per hour |
The total standard machine hours allowed for the actual output achieved is: |
| | A) | 50 000 |
| | B) | 48 000 |
| | C) | 47 520 |
| | D) | 50 500 |
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| 6 | |
The Oakleigh Company has the following information available for its production facility for the month of July. The budgeted activity level for fixed manufacturing overhead was estimated to be 48 000 machine hours for the production cycle. Actual machine hours for the period were 50 000, which resulted in the completion of 9900 units. Material purchased (210 000 items) | $819 000 | Material quantity variance | $39 600 U | Actual labour cost (15 000 hours) | $102 000 | Machine hours used | 50 000 machine hours | Variable overhead spending variance | $2 500 U | Actual fixed manufacturing overhead | $150 000 |
Oakleigh’s standard costs per unit are as follows: Direct material | 20 components @ $4 per item | Direct labour | 1.5 hours @ $6 per hour | Variable overhead (applied on machine hour basis) | 4.8 hours @ $2.50 per hour | Fixed overhead (applied on machine hour basis) | 4.8 hours @ $3 per hour |
The variable overhead efficiency variance is: |
| | A) | $6200 favourable |
| | B) | $6200 unfavourable |
| | C) | $2500 favourable |
| | D) | $8700 unfavourable |
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| 7 | |
The Oakleigh Company has the following information available for its production facility for the month of July. The budgeted activity level for fixed manufacturing overhead was estimated to be 48 000 machine hours for the production cycle. Actual machine hours for the period were 50 000, which resulted in the completion of 9900 units. Material purchased (210 000 items) | $819 000 | Material quantity variance | $39 600 U | Actual labour cost (15 000 hours) | $102 000 | Machine hours used | 50 000 machine hours | Variable overhead spending variance | $2 500 U | Actual fixed manufacturing overhead | $150 000 |
Oakleigh’s standard costs per unit are as follows: Direct material | 20 components @ $4 per item | Direct labour | 1.5 hours @ $6 per hour | Variable overhead (applied on machine hour basis) | 4.8 hours @ $2.50 per hour | Fixed overhead (applied on machine hour basis) | 4.8 hours @ $3 per hour |
If Oakleigh Company’s policy is to close overhead variances directly to the cost of goods sold at the end of the accounting period and the variable overhead efficiency variance is $6200 unfavourable, the journal entry required to correctly record the variance in a temporary ledger account is:
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| | A) | $6200 debit to the variable overhead efficiency variance account |
| | B) | $6200 debit to the raw materials inventory account |
| | C) | $6200 credit to the raw materials inventory account |
| | D) | $6200 credit to the variable overhead efficiency variance account |
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| 8 | |
The Oakleigh Company has the following information available for its production facility for the month of July. The budgeted activity level for fixed manufacturing overhead was estimated to be 48 000 machine hours for the production cycle. Actual machine hours for the period were 50 000, which resulted in the completion of 9900 units. Material purchased (210 000 items) | $819 000 | Material quantity variance | $39 600 U | Actual labour cost (15 000 hours) | $102 000 | Machine hours used | 50 000 machine hours | Variable overhead spending variance | $2 500 U | Actual fixed manufacturing overhead | $150 000 |
Oakleigh’s standard costs per unit are as follows: Direct material | 20 components @ $4 per item | Direct labour | 1.5 hours @ $6 per hour | Variable overhead (applied on machine hour basis) | 4.8 hours @ $2.50 per hour | Fixed overhead (applied on machine hour basis) | 4.8 hours @ $3 per hour |
If Oakleigh Company’s policy is to close overhead variances directly to the cost of goods sold at the end of the accounting period and the variable overhead efficiency variance is $6200 unfavourable, the impact of this $6200 unfavourable variable overhead efficiency variance on the cost of goods sold is:
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| | A) | $6200 decrease in the total cost of goods sold |
| | B) | $6200 increase in the total cost of goods sold |
| | C) | $6200 decrease in the sales revenue |
| | D) | $6200 increase in the sales revenue |
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| 9 | |
The Oakleigh Company has the following information available for its production facility for the month of July. The budgeted activity level for fixed manufacturing overhead was estimated to be 48 000 machine hours for the production cycle. Actual machine hours for the period were 50 000, which resulted in the completion of 9900 units. Material purchased (210 000 items) | $819 000 | Material quantity variance | $39 600 U | Actual labour cost (15 000 hours) | $102 000 | Machine hours used | 50 000 machine hours | Variable overhead spending variance | $2 500 U | Actual fixed manufacturing overhead | $150 000 |
Oakleigh’s standard costs per unit are as follows: Direct material | 20 components @ $4 per item | Direct labour | 1.5 hours @ $6 per hour | Variable overhead (applied on machine hour basis) | 4.8 hours @ $2.50 per hour | Fixed overhead (applied on machine hour basis) | 4.8 hours @ $3 per hour |
The budgeted fixed overhead is:
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| | A) | $150 000 |
| | B) | $142 560 |
| | C) | $144 000 |
| | D) | $147 500 |
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| 10 | |
The Oakleigh Company has the following information available for its production facility for the month of July. The budgeted activity level for fixed manufacturing overhead was estimated to be 48 000 machine hours for the production cycle. Actual machine hours for the period were 50 000, which resulted in the completion of 9900 units. Material purchased (210 000 items) | $819 000 | Material quantity variance | $39 600 U | Actual labour cost (15 000 hours) | $102 000 | Machine hours used | 50 000 machine hours | Variable overhead spending variance | $2 500 U | Actual fixed manufacturing overhead | $150 000 |
Oakleigh’s standard costs per unit are as follows: Direct material | 20 components @ $4 per item | Direct labour | 1.5 hours @ $6 per hour | Variable overhead (applied on machine hour basis) | 4.8 hours @ $2.50 per hour | Fixed overhead (applied on machine hour basis) | 4.8 hours @ $3 per hour |
The applied fixed overhead is:
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| | A) | $150 000 |
| | B) | $142 560 |
| | C) | $144 000 |
| | D) | $147 500 |
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