7. A budget that is based on the actual activity of a period is known as a: A) c

Question

7. A budget that is based on the actual activity of a period is known as a: A) continuous budget. B) flexible budget. C) tic budget. D) master budget. Answer 8. The fixed manufacturing overhead budget variance equals: A) Actual fixed manufacturing overhead cost--Applied fixed manufacturing B) Actual fixed manufacturing overhead cost--Budgeted fixed manufacturing C) Budgeted fixed manufacturing overhead cost-Applied fixed manufacturing D) Actual fixed manufacturing overhead cos (Actual hours x Standard fixed Answer overhead cost. overhead cost. overhead cost. overhead rate) 9. Which of the following variances is least significant from a standpoint of cost control? A) materials price variance. B) abor efficiency variance. C) fixed overhead volume variance. D) variable overhead spending variance. Answer 10. The manufacturing overhead variance that is a measure of capacity utilization is: A) B) C) D) the overhead spending variance. the overhead efficiency variance. the overhead budget variance. the overhead volume variance Answer If the denominator activity is less than the standard hours allowed for the actual output, one would expect that: A) the variable overhead efficiency variance would be unfavorable. B) the fixed overhead volume variance would be favorable. C) the fixed overhead budget variance would be unfavorable D) the variable overhead efficiency variance would be favorable Answer 12. The volume variance is nonzero whenever standard hours allowed for the output of a period differ from the denominator level of activity A) B) actual hours differ from the denominator level of activity C) standard hours allowed for the output of a period differ from the actual hours D) actual fixed overhead costs incurred during a period differ from budgeted Answer during the period. fixed overhcad costs as contained in the flexible budget

Explanation / Answer

Question - 7 ... Flexible budget.

Flexible budget allows for preparing a parallel budget for actual activity attained and compare with planned activity level to identify the variances.

Question - 8 ........Option - B

Question - 9 ..... Option - C

Firms capabiity to control cost based on information generated by volume variance is nothing compared to information use of other variances in controlling the cost.

Question - 10 ........Option - D

Volume change for reasons other than efficiency are possible only through adjustment of capacity.

Question - 11 ...........Option - B

Question - 12 ..........Option - C

Volume variance is nonzero along as the actual level of the denominator differs from the level used to calculate the budgeted fixed overhead rate.

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