09: Variable Cost and Overhead

6111 Words Mar 10th, 2015 25 Pages
09
Student: ___________________________________________________________________________

1.

A flexible budget is "flexible" in the sense that a budget can be prepared for any level of activity, but once a budget is set the budget figures are not changed if actual activity later proves to be different than budgeted activity.
True False

2.

In a performance report, actual costs should be compared to budgeted costs at the original budgeted activity level.
True False

3.

The overhead spending variance and the overhead efficiency variance are useful only if variable overhead really should be proportional to the activity measure that is being used in the flexible budget.
True False

4.

The variable overhead efficiency variance reflects how
…show more content…
the difference between budgeted fixed overhead cost and applied fixed overhead cost.
D. the difference between budgeted fixed overhead cost and standard fixed overhead cost.
26. A weakness of flexible budgets is that?
A. they are geared only to a single level of activity.
B. they give subordinates too much flexibility.
C. they force the manager to compare actual costs at one level of activity to budgeted costs at a different level of activity.
D companies with a variety of products or services may have problems in selecting an appropriate
. activity level as an overall measure.

27. Which of the following variances would be useful in calling attention to possible problems in the control of spending on overhead items?

A.
B.
C.
D.

choice A. choice B. choice C. choice D.

28. Which of the following variances would be useful in calling attention to possible problems in the control of spending on overhead items?

A.
B.
C.
D.

choice A. choice B. choice C. choice D.

29. The higher the denominator level of activity, then which of the following is true?
A. the higher the unit product cost.
B. the lower the unit product cost.
C. the less likely is the occurrence of a volume variance.
D. the more profitable operations likely will be.
30. A decrease in denominator level of activity will?
A. decrease the fixed portion of the predetermined overhead rate.
B. increase the fixed portion of the predetermined overhead rate.
C. decrease the variable portion of the predetermined overhead

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