70.2K

Verified Solution

Link Copied!

. Quantity variances for direct cost categories (direct materials and direct labor) are based on ifferences between the actual inputs used and the standard inguts allowed for the actual output achieved. A key difference in the analysis of quantity variances for direct cost categories and the analysis of the efficiency variance for variable overhead is: An efficiency variance for variable overhead cannot be calculated. The flexible-budget variance for variable overhead is always equal to the efficiency variance for variable overhead The efficiency variance for variable overhead is based on the efficiency with which the cost-allocation base is used The flexible-budget variance for variable overhead is always equal to the spending variance for variable overhead a. b. c. d. There is no key difference between the analysis of quantity variances for direct cost categories and the analysis of the efficiency variance for variable overhead; they should be evaluated in exactly the same manne e. 10. The following information relating to a company's overhead costs is available Budgcted fised overhead rate per machine hour Actual variable overhead Budgeted variable overhead rate per machine hour Actual fixed overhcad Budgeted hours allowed for actual output achieved 30.50 S73,000 $2.50 S17.000 32.000 Based on this information, the total overhead variance is: a. $7,000 favorable b, $6,000 favorable c. $1,000 unfavorable d. $6,000 unfavorable e. $1,000 favorable 11. Sweet 8aby Diaper Company sells disposable diapers for $.20 each. Variable costs are $.05 per diaper, while fixed costs are $75,000 per month for volumes up to 850,000 diapers and $112,500 for volumes above 850,000 diapers. The flexible budget would reflect monthly operating income for 800,000 diapers and 900,000 diapers of what dollar amounts? a. $7,500 and $60,000, respectively b. $60,000 and $45,000, respectively C. $45,000 and $22,500, respectively $22,500 and $7,500, respectively None of the above d. e. 12. Which of the following statements is true:? Variable budget is another name for a flexible budget Flexible budget performance reports compare actual results with the expected amounts in the fixed budget. a. b. c. Another name for a static budget is a variable budget d. Within the same budget performance report, it is impossible to have both favorable and unfavorable variances None of the above statements are true, e

Answer & Explanation Solved by verified expert

See Answer