EXAM REVIEW 3 F09

# EXAM REVIEW 3 F09 - EXAM #3 REVIEW 1. Barringer...

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Unformatted text preview: EXAM #3 REVIEW 1. Barringer Manufacturing Corporation has prepared the following overhead budget for next month. The company's variable overhead costs are driven by machine-hours. What would be the total budgeted overhead cost for next month if the activity level is 7,900 machine-hours rather than 7,800 machine-hours? A. \$110,710.00 B. \$109,620.00 C. \$110,868.00 D. \$111,025.38 Variable cost per machine-hour = (\$34,320 + \$50,700) 7,800 machine-hours = \$10.90 per machine-hour (\$10,200 + \$5,600 + \$8,800) + (\$10.90 x 7,900) = \$110,710.00 2. A flexible budget: A. classifies budget requests by activity and estimates the benefits arising from each activity. B. presents a statement of expectations for a period of time but does not present a firm commitment. C. presents the plan for only one level of activity and does not adjust to changes in the level of activity. D. presents the plan for a range of activity so that the plan can be adjusted for changes in activity levels. 3. Venanzi Air uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane operating costs is \$40,720 per month plus \$2,646 per flight plus \$11 per passenger. The company expected its activity in September to be 62 flights and 288 passengers, but the actual activity was 64 flights and 289 passengers. The actual cost for plane operating costs in September was \$214,430. The activity variance for plane operating costs in September would be closest to: A. \$6,490 U B. \$5,303 F C. \$6,490 F D. \$5,303 U Since the flexible budget is greater than the planning budget, the variance is unfavorable (U) 4. Embertson Framing's cost formula for its supplies cost is \$1,350 per month plus \$16 per frame. For the month of June, the company planned for activity of 816 frames, but the actual level of activity was 812 frames. The actual supplies cost for the month was \$14,680. The activity variance for supplies cost in June would be closest to: A. \$64 U B. \$274 U C. \$64 F D. \$274 F Since the flexible budget expense is less than the planning budget, the variance is favorable (F) 5. Posson Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is \$210 per month plus \$96 per job plus \$20 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in March to be 20 jobs corporate function or at a host's home....
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## This note was uploaded on 01/19/2011 for the course ACCT 2302 taught by Professor Prendergast during the Spring '10 term at Austin Community College.

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EXAM REVIEW 3 F09 - EXAM #3 REVIEW 1. Barringer...

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