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Question 1
Free
Multiple Choice

Compared to variable overhead costs planning, fixed overhead cost planning has an additional strategic issue beyond undertaking only essential activities and efficient operations. That additional requirement is best described as:

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A

focusing on the highest possible quality

B

increasing the linearity between total costs and volume of production

C

choosing the appropriate level of capacity that will benefit the company in the long-run

D

identifying essential value-adding activities

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Question 2
Free
Multiple Choice

Effective planning of variable overhead costs means that managers must

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A

increase the expenditures in the variable overhead budgets

B

focus on activities that add value for the customer and eliminate nonvalue-added activities

C

increase the linearity between total costs and volume of production

D

identify the product advertising requirements and factor those into the variable overhead budget

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Question 3
Free
Multiple Choice

Which of the following is a true statement of energy costs?

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A

Energy costs are not controllable

B

Strategies to reduce energy costs will not impact variable cost budgets.

C

Energy costs are a fixed cost of doing business for a manufacturer.

D

Energy costs are a growing component of variable overhead costs.

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Question 4
Free
Multiple Choice

Fixed overhead costs include ________ .

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A

the cost of sales commissions

B

Leasing of machinery used in a factory

C

energy costs

D

indirect materials

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Question 5
Free
Multiple Choice

Effective planning of fixed overhead costs includes ________ .

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A

planning day-to-day operational decisions

B

eliminating value-added costs

C

determining which products are to be produced

D

choosing the appropriate level of investment in productive assets

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Question 6
Multiple Choice

Effective planning of variable overhead costs includes ________ .

Choose correct answer/s
A
choosing the appropriate level of investment
B
eliminating value-added costs
C
redesigning products or processes to use fewer resources
D
reorganizing management structure
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Question 7
Multiple Choice

Most of the decisions determining the level of fixed overhead costs to be incurred will be made ________ .

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A
by the end of a budget period
B
by the middle of a budget period
C
on a day-to-day ongoing basis
D
at the start of a budget period
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Question 8
Multiple Choice

The major challenge when planning fixed overhead is ________ .

Choose correct answer/s
A
calculating total costs
B
calculating the cost-allocation rate
C
choosing the appropriate level of capacity
D
choosing the appropriate planning period
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Question 9
True/False

An effective plan for variable overhead costs will eliminate activities that do not add value.

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True
False
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Question 10
True/False

At the start of the budget period, management will have made most decisions regarding the level of fixed overhead costs to be incurred.

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True
False
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Question 11
True/False

The planning of fixed overhead costs differs from the planning of variable overhead costs in terms of timing.

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True
False
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Question 12
True/False

The costs related to buildings (such as rent and insurance), equipment (such as lease payments or straight-line depreciation), and salaried labor in a factory are all examples of cost items that would be part of the fixed overhead budget.

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True
False
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Question 13
Multiple Choice

Which of the following mathematical expression is used to calculate budgeted variable overhead cost rate per output unit?

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A
Budgeted output allowed per input unit × Budgeted variable overhead cost rate per input unit
B
Budgeted input allowed per output unit ÷ Budgeted variable overhead cost rate per input unit
C
Budgeted output allowed per input unit ÷ Budgeted variable overhead cost rate per input unit
D
Budgeted input allowed per output unit × Budgeted variable overhead cost rate per input unit
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Question 14
Multiple Choice

While calculating the costs of products and services, a standard costing system ________ .

Choose correct answer/s
A
allocates overhead costs on the basis of the actual overhead-cost rates
B
uses standard costs to determine the cost of products
C
does not keep track of overhead cost
D
traces direct costs to output by multiplying the standard prices or rates by the actual quantities
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Question 15
Multiple Choice

Which of the following best defines standard costing?

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A
It is the same as actual costing but done in real time.
B
It is a system that traces direct cost to output by multiplying actual process or rates by actual quantities of inputs + allocates overhead by on the basis of actual quantities of the allocation base used.
C
It is a system that traces direct costs to output produced by multiplying the standard prices or rates by the standard quantities of inputs allowed for the actual output produced.
D
It is a system that allocates overhead costs on the basis of standard overhead cost rates times the actual quantities of the allocation based used.
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Question 16
Multiple Choice

Which of the following is the mathematical expression for the budgeted fixed overhead cost per unit of cost allocation base?

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A
Budgeted fixed overhead cost per unit of cost allocation base = Actual total costs in fixed overhead cost pool ÷ Budgeted total quantity of cost allocation base
B
Budgeted fixed overhead cost per unit of cost allocation base = Budgeted total costs in fixed overhead cost pool ÷ Budgeted total quantity of cost allocation base
C
Budgeted fixed overhead cost per unit of cost allocation base = Actual total costs in fixed overhead cost pool ÷ Actual total quantity of cost allocation base
D
Budgeted fixed overhead cost per unit of cost allocation base = Budgeted total costs in fixed overhead cost pool ÷ Actual total quantity of cost allocation base
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Question 17
Multiple Choice

In flexible budgets the costs that are not "flexed" because they remain the same within a relevant range of activity (such as sales or output) are called ________ .

Choose correct answer/s
A
total overhead costs
B
total budgeted costs
C
fixed costs
D
variable costs
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Question 18
Multiple Choice

Really Great Corporation manufactures industrial-sized landscaping trailers and uses budgeted machine-hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data:
image
What is the budgeted variable overhead cost rate per output unit?

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A
$9.60
B
$12.40
C
$7.75
D
$31.00
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Question 19
Multiple Choice

Home Plate Corporation manufactures baseball uniforms and uses budgeted machine-hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data:
image
What is the budgeted variable overhead cost rate per output unit?

Choose correct answer/s
A
$6.26
B
$6.00
C
$17.00
D
$18.00
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Question 20
Multiple Choice

Healthy Earth Products Inc. produces fertilizer and distributes the product by using company trucks. The controller of the company uses budgeted fleet hours to allocate variable manufacturing overhead. The following information relates to the company's manufacturing overhead data:
image
What is the budgeted variable overhead cost rate per output unit?

Choose correct answer/s
A
$114.00
B
$117.00
C
$123.16
D
$120.00
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