Mercer University - Accounting: Chapter 11—Flexible Budgets and Overhead Analysis. Questions and Answers.

Mercer University - Accounting: Chapter 11—Flexible Budgets and Overhead Analysis. Questions and Answers. Chapter 11—Flexible Budgets and Overhead 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