Mercer University - Accounting: Chapter 11—Flexible Budgets and Overhead Analysis. Questions and Answers.
Chapter 11—Flexible Budgets and Overhead
... [Show More] Analysis
TRUE/FALSE
1. A static budget compares actual cost with budgeted costs.
ANS: F
A performance report compares actual cost with budgeted costs.
PTS: 1 DIF: Difficulty: Easy OBJ: LO: 11-1
NAT: BUSPROG: Analytic
STA: AICPA: FN-Decision Modeling | IMA: Budget Preparation | ACBSP: APC-36-Budgeting and
Responsibility KEY: Bloom's: Knowledge NOT: 1 min.
2. Static budgets are the best benchmarks for preparing a performance report.
ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic
STA: AICPA: FN-Decision Modeling | IMA: Budget Preparation | ACBSP: APC-36-Budgeting and
Responsibility KEY: Bloom's: Knowledge NOT: 1 min.
3. Before-the-fact flexible budgets give expected outcomes for a range of activity levels.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic
STA: AICPA: FN-Decision Modeling | IMA: Budget Preparation | ACBSP: APC-36-Budgeting and
Responsibility KEY: Bloom's: Comprehension NOT: 1 min.
4. An after-the-fact flexible budget allows managers to generate financial results from a number of potential
scenarios.
ANS: F
An after-the-fact flexible budget is used to compute what costs should have been for the actual level of
activity.
PTS: 1 DIF: Difficulty: Easy OBJ: LO: 11-1
NAT: BUSPROG: Analytic
STA: AICPA: FN-Decision Modeling | IMA: Budget Preparation | ACBSP: APC-36-Budgeting and
Responsibility KEY: Bloom's: Comprehension NOT: 1 min.
5. A static budget is a budget for a particular level of activity.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-1 NAT: BUSPROG: Analytic
STA: AICPA: FN-Decision Modeling | IMA: Budget Preparation | ACBSP: APC-36-Budgeting and
Responsibility KEY: Bloom's: Knowledge NOT: 1 min.
6. When overhead is applied on the basis of direct labor hours, the variable overhead efficiency variance
always has the same sign as the labor efficiency variance.
ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 11-2 NAT: BUSPROG: Analytic [Show Less]