Ch14 - ch14 Student 1 Cost behavior for variable overhead is more difficult to predict than direct material or direct labor cost behavior because A

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ch14 Student: ___________________________________________________________________________ 1. Cost behavior for variable overhead is more difficult to predict than direct material or direct labor cost behavior because: A. Multiple cost drivers are involved with variable overhead. B. Direct material and direct labor contain no semi-variable component. C. The variable portion of overhead must first be separated from the fixed portion. D. Answer A and answer B are both correct. E. Answers A, B and C are all correct. 2. Finding a single cost driver that changes in the same proportion as variable factory overhead costs is: A. Simplified by breaking out the fixed portion of overhead cost. B. The first step in variable overhead cost assignment. C. Difficult but manageable. D. Difficult and not really manageable. E. Virtually impossible. 3. An activity-based cost driver applies factory overhead to products or services according to the: A. Activity output as measured by the units produced. B. Activity level of hours of direct labor. C. Activity level of manufacturing operations. D. Budgeted activity level for the period. E. Number of machine hours. 4. Many firms break the variable factory overhead flexible budget variance down into two detailed variances that measure: A. Price and efficiency. B. Spending and efficiency. C. Spending and production volume. D. Both answer A and answer B are correct. E. Answers A, B and C are all correct. 5. Which of the following factors should not be considered when deciding whether to investigate a variance? A. Magnitude of the variance. B. Trend of the variance over time. C. Whether the variance is favorable or unfavorable. D. Cost of investigating the variance. E. Likelihood that the variance will recur in the future. 6. A standard costing system will produce the same income as an actual costing system when standard cost variances are assigned to: A. Work-in-process inventory. B. Finished goods inventory. C. Work-in-process and finished goods inventories. D. Cost of goods sold. E. Cost of goods sold and inventories. 1
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7. Many firms feel a strong obligation to establish and use a standard rate for fixed factory overhead because of: A. The GAAP requirements to use full costing for financial reporting. B. The mandate to include fixed factory overhead in pricing for federal government procurement. C. A genuine belief that all operational costs should be included in the product's cost. D. Answers A, B and C are all correct. E. None of the above. 8. Because fixed factory overhead does not vary with changes in the activity level, there is, in effect, no: A. Activity measure for fixed factory overhead during the period. B. Way to assign fixed overhead cost to products.
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This note was uploaded on 06/03/2008 for the course ACCT 304 taught by Professor Any during the Spring '08 term at Rutgers.

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Ch14 - ch14 Student 1 Cost behavior for variable overhead is more difficult to predict than direct material or direct labor cost behavior because A

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