Fixed costs for the period are by definition a lump

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23) Fixed costs for the period are by definition a lump sum of costs that remain unchanged and therefore the fixed overhead spending variance is always zero.
Diff: 2 Terms: 10
fixed overhead spending variance Objective: 5 AACSB: Reflective thinking11
24) Caution is appropriate before interpreting the production-volume variance as a measure of the economic cost of unused capacity.
Diff: 1 Terms: production-volume variance Objective: 5 AACSB: Ethical reasoning 25) The production-volume variance arises whenever the actual level of the denominator differs from the level used to calculate the budgeted fixed overhead rate.
Diff: 1 Terms: production-volume variance Objective: 5 AACSB: Reflective thinking26) The lump sum budgeted for fixed overhead will always be the same amount for the static budget and the flexible budget.
Diff: 2 Terms: fixed overhead flexible-budget variance Objective: 5 AACSB: 12
Reflective thinking27) A favorable production-volume variance arises when manufacturing capacity planned for is not used.
Diff: 1 Terms: production-volume variance Objective: 5 AACSB: Reflective thinking28) The fixed overhead flexible budget variance is the difference between actual fixed overhead costs and fixed overhead costs in the flexible budget.
Diff: 2 Terms: fixed overhead flexible-budget variance Objective: 5 AACSB: Reflective thinking29) An unfavorable production-volume variance always infers that management made a bad planning decision regarding the plant capacity.
Diff: 2 Terms: 13
production-volume variance Objective: 5 AACSB: Ethical reasoning14
30) Favorable overhead variances are always recorded with credits in a standard cost system.
Diff: 2 Terms: standard costing, total-overhead variance Objective: 5 AACSB: Reflective thinking 31) Under activity-based costing, the flexible-budget amount equals the static-budget amount for fixed overhead costs.
Diff: 2 Terms: fixed overhead flexible-budget variance Objective: 5 AACSB: Reflective thinking

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