30.A variable overhead spending variance is caused bya.using more or fewer actual hours than the standard hours allowed for the productionn achieved.b.paying a higher/lower average actual overhead price per unit of the activity base thanthe standard price allowed per unit of the activity base.c.larger/smaller waste and shrinkage associated with the resources involved than expected.d.both b and c are causes.ANS:DDIF:ModerateOBJ:7-331.Which of the following are considered controllable variances?VOH spendingTotal overhead budgetVolume32.A company may set predetermined overhead rates based on normal, expected annual, or theoretical capacity. At the end of a period, the fixed overhead spending variance would33.The variance least significant for purposes of controlling costs is the34.Fixed overhead costs area.best controlled on a unit-by-unit basis of products produced.b.mostly incurred to provide the capacity to produce and are best controlled on a totalbasis at the time they are originally negotiated.c.constant on a per-unit basis at all different activity levels within the relevant range.d.best controlled as to spending during the production process.ANS:BDIF:ModerateOBJ:7-335.The variancemostuseful in evaluating plant utilization is the36.A favorable fixed overhead volume variance occurs if37.The fixed overhead application rate is a function of a predetermined activity level. If standard hours allowed for good output equal the predetermined activity level for a given period, the volume variance will be
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