Site MapHelpFeedbackMultiple Choice Quiz
Multiple Choice Quiz
(See related pages)

1
A major weakness of static budgets is that:
A)they are geared only to a single level of activity.
B)they cannot be used to assess whether variable costs are under control.
C)they force the manager to compare actual costs at one level of activity to budgeted costs at a different level of activity.
D)all of the above.
2
Kevin's Bar & Grill compares monthly operating results with a static budget prepared at the beginning of the year. When actual sales are less than budget, would the restaurant usually report favorable variances on fixed supervisory salaries and variable food costs?
 
Food Costs
Supervisory Salaries
A)
Yes
Yes
B)
No
Yes
C)
Yes
No
D)
No
No
A)A
B)B
C)C
D)D
3
The two variances that can be computed for fixed overhead are the:
A)budget variance and the efficiency variance.
B)budget variance and the volume variance.
C)efficiency variance and the spending variance.
D)efficiency variance and the volume variance.
4
The higher the estimated total units in the base for the predetermined overhead rate (i.e., the denominator activity):
A)the more profitable operations likely will be.
B)the less likely is the occurrence of a volume variance.
C)the lower the unit product cost.
D)the higher the unit product cost.
5
A company's static budget estimate of total overhead costs was $400,000 based on the assumption that 20,000 units would be produced and sold. The company estimates that 30% of its overhead is variable and the remainder is fixed. What would be the total overhead cost according to the flexible budget if 24,000 units were produced and sold?
A)$384,000
B)$400,000
C)$424,000
D)$464,000
6
The Littlefield Company applies manufacturing overhead costs to products on the basis of direct labor-hours. The standard cost card shows that 12 direct labor-hours are required per unit of product. For August, the company budgeted to work 360,000 direct labor-hours and to incur the following total manufacturing overhead costs:
Total fixed overhead costs
$475,200
Total variable overhead costs
$396,000

During August, the company completed 28,000 units of product, worked 344,000 direct labor-hours, and incurred the following total manufacturing overhead costs:
Total fixed overhead costs
$461,200
Total variable overhead costs
$395,600

The denominator activity in the predetermined overhead rate is 360,000 direct labor-hours. The variable overhead spending variance for August is:
A)$17,200 F.
B)$17,200 U.
C)$26,000 F.
D)$26,000 U.
7
The Littlefield Company applies manufacturing overhead costs to products on the basis of direct labor-hours. The standard cost card shows that 12 direct labor-hours are required per unit of product. For August, the company budgeted to work 360,000 direct labor-hours and to incur the following total manufacturing overhead costs:
Total fixed overhead costs
$475,200
Total variable overhead costs
$396,000

During August, the company completed 28,000 units of product, worked 344,000 direct labor-hours, and incurred the following total manufacturing overhead costs:
Total fixed overhead costs
$461,200
Total variable overhead costs
$395,600

The denominator activity in the predetermined overhead rate is 360,000 direct labor-hours. (Note that this is the same data that was provided for the previous question.) The variable overhead efficiency variance for August is:
A)$0.
B)$7,200 F.
C)$8,800 U.
D)$8,800 F.
8
The Littlefield Company applies manufacturing overhead costs to products on the basis of direct labor-hours. The standard cost card shows that 12 direct labor-hours are required per unit of product. For August, the company budgeted to work 360,000 direct labor-hours and to incur the following total manufacturing overhead costs:
Total fixed overhead costs
$475,200
Total variable overhead costs
$396,000

During August, the company completed 28,000 units of product, worked 344,000 direct labor-hours, and incurred the following total manufacturing overhead costs:
Total fixed overhead costs
$461,200
Total variable overhead costs
$395,600

The denominator activity in the predetermined overhead rate is 360,000 direct labor-hours. (Note that this is the same data that was provided for the previous question.) The fixed overhead budget variance for August is:
A)$14,000 F.
B)$14,000 U.
C)$12,800 F.
D)$12,800 U.
9
The Littlefield Company applies manufacturing overhead costs to products on the basis of direct labor-hours. The standard cost card shows that 12 direct labor-hours are required per unit of product. For August, the company budgeted to work 360,000 direct labor-hours and to incur the following total manufacturing overhead costs:
Total fixed overhead costs
$475,200
Total variable overhead costs
$396,000

During August, the company completed 28,000 units of product, worked 344,000 direct labor-hours, and incurred the following total manufacturing overhead costs:
Total fixed overhead costs
$461,200
Total variable overhead costs
$395,600

The denominator activity in the predetermined overhead rate is 360,000 direct labor-hours. (Note that this is the same data that was provided for the previous question.) The fixed overhead volume variance for August is:
A)$17,200 U.
B)$19,920 F.
C)$19,920 U.
D)$31,680 U.
10
Which of the following variances is caused by a difference between the denominator activity in the predetermined overhead rate and the standard hours allowed for the actual production of the period?
A)fixed overhead budget variance.
B)fixed overhead volume variance.
C)variable overhead efficiency variance.
D)variable overhead spending variance.





To learn more about the book this website supports, please visit its Information Center.
(c)2008 McGraw-Hill Higher Education
Any use is subject to the Terms of Use and Privacy Policy.
McGraw-Hill Higher Education is one of the many fine businesses of The McGraw-Hill Companies.


Managerial AccountingOnline Learning Center

Home > Chapter 11 > Multiple Choice Quiz