1-

Variable costing is more important for external reports than internal reports.

True/ False

2-

Assume machine hours are the costallocation

base for the budgeted rate for fixed overhead costs. The total fixed overhead cost applied to a product is the result of multiplying the ________ by the ________ for the product.

A.

budgeted fixed overhead costs; percent of completion

B.

budgeted fixed overhead rate; actual machine hours used

C.

budgeted fixed overhead costs; budgeted machine hours

D.

actual fixed overhead rate; budgeted machine hours

3-

Marian Industries Inc. reported the following information about the production and sale of its only product during the first month of operations:

Selling price per unit $100.00

Sales $100,000

Direct materials used $37,500

Direct labor $36,000

Variable factory overhead $25,500

Fixed factory overhead $20,000

Variable selling and administrative expenses $2,000

Fixed selling and administrative expenses $7,500

Ending inventory, Direct Materials 0

Ending inventory,

Workminusinminusprocess

0

Ending inventory, Finished Goods 1,200 units

Under variable costing, what is the cost of the finished goods ending inventory?

A.

$48,000

B.

$58,000

C.

$50,000

D.

$54,000

4-

When the actual volume is less than the expected volume, the fixed overhead costs are ________.

A.

underapplied

B.

overapplied

C.

overbudgeted

D.

favorable

5-

The cost driver chosen for applying factory overhead costs should be the cost driver that ________.

A.

causes most of the overhead costs

B.

incurs the least administrative costs

C.

is easiest to understand

D.

is easiest to calculate

6-

Under absorption costing, fixed manufacturing overhead costs appear on two places on the income statement that include ________ and ________.

A.

production volume variance; cost of goods sold

B.

efficiency variance for fixed overhead costs; production volume variance

C.

efficiency variance for fixed overhead costs; cost of goods sold

D.

usage variance for fixed overhead costs; cost of goods sold