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1.Question :(TCO 10) Which of the following statements istrueabout overhead costvariance analysis using activity-based costing?Student Answer:Overhead cost variances are calculated for output-unit level costs only.Overhead cost variances are calculated for variable manufacturingoverhead costs only.A 4-variance analysis can be conducted.Activity-based costing uses input measures for all activities, resulting inthe inability to do flexible budgets needed for variance analysis.
Instructor Explanation:See Chapter 8.Points Received:6 of 6Comments:Question 2.Question :(TCO 10) Sebastian Company,which manufactures electricalswitches, uses a standard costsystem and carries all inventoriesat standard. The standardmanufacturing overhead costsper switch are based on directlabor hours and are shownbelow:Variable overhead (5 hours at $12 perdirect manufacturing labor hour)Fixed overhead (5 hours at $15 per direct manufactubased on capacity of 200,000 direct manufacturing lThe following information is