budget should be based on the production budget. 3. A favorable variance should be ignored by management. 4. The direct manufacturing labor price variance is likely to be unfavorable if lower-skilled workers are put on a job. 5. For fixed overhead costs‚ the flexible-budget amount is always the same as the static-budget amount. II. MULTIPLE CHOICE 6. The plans of management are expressed formally in: A. the annual report to shareholders. B. Form 10-K submitted to the Securities
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Bibliography: You may notice the OAR rate for fixed factory overhead is £30.00 per unit i.e. (£30‚000/1000) and OAR rate for fixed selling overhead is £1.00 per unit i.e. (£1‚000/1000).
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Managerial Accounting 10th of March Anhar Hardjakusumah Understanding Cost Concepts Cost Terminology Product (Manufacturing over(head+ direct labor and materials) and Period Cost (selling + administrative) Variable and Fixed Cost Direct and Indirect Cost Controlable and uncontrollable cost Differential (the difference between the cost of two alternative decisions) Marginal (the change in the total cost that arises when the quantity produced has an increment by unit. That is‚ it is the cost of
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AN IDEAL APPROACH TO STANDARD COSTING By Jitesh Chandak INTRODUCTION Before you start your study on standard costing you must be clear in your mind that you are going to study a chapter which wants more practice and hard work to develop a strong and sound concept. Costing can be defined as “The technique and process of ascertaining costs.” Standard costing is a technique‚ which uses standards for cost and revenue for the purpose of control through
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different coffees that it sells to gourmet shops in one-pound bags. The major cost of the coffee is raw materials. However‚ the company’s predominately automated roasting‚ blending‚ and packing process requires a substantial amount of manufacturing overhead. The company uses relatively little direct labor. Some of CBI’s coffees are very popular and sell in large volumes‚ while a few of the newer blends have very low volumes. CBI prices its coffee at manufacturing cost plus a markup of 30%. If CBI’s
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Practice Text Exercises Karen V. Lawrence‚ Charita Dixon‚ Brian Swift‚ Javon Lewis‚ Cecelia Byrd ACC 561 June 21‚ 2011 Michael T. Bradford Practice Text Exercises Excel 12-59 Allocating Costs Using Direct and Step-Down Methods (p. 584) Goal: Create an Excel spreadsheet to allocate costs using the direct method and the stepdown method. Use the results to answer questions about your findings. Scenario: Antonio Cleaning has asked you to help them determine the best method for allocating
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Prime cost Product cost A) No Yes B) No No C) Yes No D) Yes Yes 6. The salary of the president of a manufacturing company would be classified as which of the following? A) Product cost B) Period cost C) Manufacturing overhead D) Direct labor 7.
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managers plan for variable overhead costs? Managers plan for variable overhead changes with the level of activity‚ so if managers think they are overspending on variable overhead‚ managers are able to slow or stop the production process and investigate. If some reason a company needs to increase production‚ managers have to check and add variable overhead as needed. 1. How does the planning of fixed overhead cost differ from the planning of variable costs? Fixed overhead costs involve
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TO QUESTIONS 48 THROUGH 51. White Corporation manufactures football jerseys and uses budgeted machine-hours to allocate variable manufacturing overhead. The following information pertains to the company ’s manufacturing overhead data. Budgeted output units 20‚000 units Budgeted machine-hours 30‚000 hours Budgeted variable manufacturing overhead costs for 20‚000 units
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202 Mid-term Review Chapters 1-4 1. Chapter -1 Multiple Choice Questions 21. Which of the following is not one of the three basic activities of a manager? A) Planning B) Controlling C) Directing and motivating D) Compiling management accounting reports Answer: D Level: Easy LO: 2 22. The delegation of decision making to lower levels in an organization is known as: A) the planning and control cycle. B)
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