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Chapter 11 Quiz 4
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1
A favourable volume variance indicates that the standard hours allowed for actual output are less than the planned level of production-that is, actual output is greater than the level planned at the beginning of the year. An unfavourable volume variance indicates that the standard hours allowed are greater than the planned level of production:
A)True
B)False
2
At the end of each accounting period, the management accountant can use the flexible overhead budget to calculate the level of overhead cost that should have been incurred, given the actual level of activity. The accountant then compares the flexible overhead cost with the actual overhead cost incurred:
A)True
B)False
3
A flexible budget is prepared for one specific planned level of activity:
A)True
B)False
4
Standard costs cannot be used for external reporting. The Australian accounting standard AASB 102 states that inventories cannot be valued at standard cost:
A)True
B)False
5
An overhead cost performance report provides a summary of the actual and budgeted costs for each overhead item, and the overhead variances:
A)True
B)False
6
An unfavourable volume variance (where standard hours allowed for actual output are less than the average planned hours) measures the cost of underutilising productive capacity:
A)True
B)False
7
Standard costing is outdated and provides few positive outcomes:
A)True
B)False





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