Overhead Cost Variances and Management Control

Show Answers

Correct options are highlighted when revealed.

1.In standard costing, which type of costs are allocated by multiplying the standard quantity allowed by the predetermined overhead rates?

adjustable expensescosts that vary with productionindirect manufacturing expensesconstant expenses

2.Which category do energy, machine maintenance, indirect materials, and engineering support fall under?

variable overhead expensesfixed overhead expensesfixed batch expensesvariable batch expenses

3.In the process of planning which cost type should a company remove all activities that do not contribute value to its products or services?

variable overhead costfixed overhead expensesfixed batch expensesvariable batch expenses

4.Given a flexible budget of $40,000 and a variable overhead flexible budget variance of $25,000, what is the amount of the actual costs incurred?

$15,000$35,000$65,000$75,000

5.What is the term for the budget that shows the variance between the actual quantity used and the quantity originally planned?

budget based on actual costsvariance in a flexible budgetstatic budgettime-based budget

6.What is the term used to describe the difference between the actual variable overhead cost incurred and the variable overhead amount in the flexible budget?

variable overhead flexible budget variancefixed overhead budget varianceflexible overhead cost varianceflexible overhead price variancevariable overhead spending variance

7.Which of the following is considered a cost allocation base utilized by an operations manager?

machine hoursadjustable hourshours that varyconstant hours

8.Which costing method calculates direct costs by applying a predetermined price rate to the actual quantity produced?

9.To determine ____________, the flexible budget figure is combined with the variable overhead flexible budget variance.

incurred manufacturing expensesincurred variable expensesincurred fixed expensesincurred actual expenses