13 A volume variance is computed for: A) both variable and fixed overhead. B) va

Question

13 A volume variance is computed for: A) both variable and fixed overhead. B) variable overhead only C) fixed overhead only D) direct labor costs as well as overhead costs. Answer 14. Which of the following standard cost variances would usually be least controllable by A) Fixed overhead volume variance. B) Variable overhead efficiency variance C) Direct labor efficiency variance. D) Materials usage (quantity) variance. Answer 15. During the year the balance in the prepaid expenses account increased by S6,000. In order to adjust the company's net income to a cash basis using the direct method on the statement of cash flows, it would be necessary to: A) deduct the $6,000 from the operating expenses reported on the income statement. B) add the $6,000 to the operating expenses reported on the income statement. C) deduct the S6,000 from the cost of goods sold reported on the income statement. D) add the $6,000 to the cost of goods sold reported on the income statement. Answer 16. In a statement of cash flows, all of the following would be classified as operating activities except: A) interest paid to creditors. B) dividends received on stock in another company held as an investment. C) dividends paid to the company's own common stockholders. D) ntrest received on a long-term note receivable. Answer 17. In a statement of cash flows, a change in accounts payable account would be classified as: A) an operating activity B) a financing activity C) n investing activity D) a noncash item that need not appear on the statement of cash flows. Answer

Explanation / Answer

13) Fixed overhead only

Note:

Indirect manufacturing costs that do not vary with levels of production

14) Fixed overhead volume variance

Note:

Fixed overhead costs do not depend on the actual level of production during the current period.

15) Deduct the $6000from the operating expenses reported to the income statement

Note:

Prepared expenses here make payment in advance, therefore, deduct from operating expenses

16) Interest received on a long-term note receivable

Note:

Interest received on a long-term note receivable should be reported as a long-term asset.

17) An Operating Activity

Note:

Accounts payable are part of business operations & appear in the cash flow from operations.

18) An addition to net income of $ 100000 in order to arrive at net cash provided by operating activities

Note:

A decrease in plant and equipment does not involve actual payment of cash so it will be added back to the net profit

19) Both A and B above

Note:

Cash from the issuance of common stock will be considered as in financing activities

20) None of the above

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