Question

1.a fixed overhead rate based on_______ highlights for management attention the cost of unutilized capacity.
a. budgeted production
b practical capacity
c utilized capacity
d. actual production

2. the formula AQ x (SP - AP) is the:
a. direct materials spending variance
b. direct materials volume variance
c. direct materials price variance
d. direct materials quantity variance

3. the formula SP x (SQ - AQ) is the:
a. direct materials spending variance
b. direct materials volume variance
c. direct materials price variance
d. direct materials quantity variance

4. Delaware corp. prepared a master budget that included $21,360 for direct materials, $33,600 for direct labor, $18,000 for variable overhead and $46,440 for fixed overhead. Delaware corp. planned to sell 4,000 units during the period, but actually sold 4,300 units. what would declares fixed overhead cost be if it used a flexible budget for the period based on actual sales?
a. 43,200
b. 46,440
c. 49,923
d. 166,410

please help thanks!

Answer 1

Solution 1:

A fixed overhead rate based on practical capacity highlights for management attention the cost of unutilized capacity.

Hence option b is correct.

Solution 2:

the formula AQ x (SP - AP) is the "direct materials price variance"

Hence option c is correct.

Solution 3:

The formula SP x (SQ - AQ) is the "direct materials quantity variance"

Hence option d is correct.

Solution 4:

Fixed overhead cost in flexible budget = $46,440

Hence option b is correct.