Chapter 8 test bank with answers Horngren\'s Cost Accounting: A Managerial Emphasis, 16th Global Edition PDF

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test bank with answers Horngren's Cost Accounting: A Managerial Emphasis, 16th Global Edition...

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Cost Accounting: A Managerial Emphasis, 16e, Global Edition (Horngren) Cha pt e r8 Fl e x i bl eBudge t s , Ove r he a dCos tVa r i a nc e s , a ndMa na ge mentCont r ol 8 . 1 Obj e c t i ve8 . 1 1 )Compa r e dt ova r i abl eo ve r he a dc os t spl a nni ng,fix e dove r he adc os tpl a nni nghasa na ddi t i ona ls t r a t e gi c i s s uebe yondunde r t a ki ngonl ye s s e nt i alac t i vi t i e sa nde ffic i e ntope r a t i ons .Tha ta ddi t i ona lr e qui r e me nti s be s tde s c r i be da s : A)f oc us i ngont hehi ghe s tpos s i bl equa l i t y B)i nc r e a s i ngt hel i ne a r i t ybe t we e nt ot a lc os t sa ndv ol umeofpr oduc t i on C)c hoos i ngt hea ppr opr i a t el e ve lofc a pac i t yt ha twi l lbe ne fitt hec ompa nyi nt hel ong r un D)i de nt i f yi nge s s e nt i a lva l ue addi nga c t i vi t i e s Ans we r :C Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

2 )Effe c t i vepl anni ngofva r i abl eo ve r he a dc os t sme anst ha tmana ge r smus t A)i nc r e as et hee xpe ndi t ur e si nt hevar i a bl eo ve r he adbudge t s B)f oc usona c t i vi t i e st ha taddv al uef ort hec us t ome ra nde l i mi na t enonva l ue a dde dac t i vi t i e s C)i nc r e as et hel i ne ar i t ybe t we e nt ot a lc os t sa ndv ol umeofpr oduc t i on D)i de nt i f yt hepr oduc ta dve r t i s i ngr e qui r e me nt sa ndf a c t ort hos ei nt ot hev ar i a bl eo ve r he a dbudge t Ans we r :B Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

3 )Whi c hoft hef ol l o wi ngi sat r ues t a t e me ntofe ne r gyc os t s ? A)Ene r gyc os t sar enotc ont r ol l a bl e B)S t r a t e gi e st or e duc ee ne r gyc os t swi l lnoti mpac tvar i a bl ec os tbudge t s . C)Ene r gyc os t sa r eafix e dc os tofdoi ngbus i ne s sf oramanuf a c t ur e r . D)Ene r gyc os t sar eagr owi ngc ompone ntofvar i a bl eove r he a dc os t s . Ans we r :D Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

4 )Fi x e dove r he adc os t si nc l ude_ _ __ _ _ __ . A)t hec os tofs a l e sc ommi s s i ons B)Le as i ngofma c hi ne r yus e di naf a c t or y C)e ne r gyc os t s D)i ndi r e c tma t e r i al s Ans we r :B Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

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5 )Effe c t i vepl anni ngoffixe do ve r he a dc os t si nc l ude s_ _ __ _ _ __ . A)pl a nni ngda yt oda yope r a t i ona lde c i s i ons B)e l i mi na t i ngva l ue adde dc os t s C)de t e r mi ni ngwhi c hpr oduc t sa r et obepr oduc e d D)c hoos i ngt hea ppr opr i a t el e ve lofi nve s t me nti npr oduc t i veas s e t s Ans we r :D Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

6 )Effe c t i vepl anni ngofva r i abl eo ve r he a dc os t si nc l ude s__ _ _ __ _ _. A)c hoos i ngt hea ppr opr i a t el e ve lofi nve s t me nt B)e l i mi na t i ngva l ue adde dc os t s C)r e de s i gni ngpr oduc t sorpr oc e s s e st ous ef e we rr e s our c e s D)r e or gani z i ngma na ge me nts t r uc t ur e Ans we r :C Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

7 )Mos toft hede c i s i onsde t e r mi ni ngt hel e ve loffix e dove r he a dc os t st obei nc ur r e dwi l lbema de _ _ __ _ __ _ . A)b yt hee ndofabudge tpe r i od B)b yt hemi ddl eofabudge tpe r i od C)onada yt oda yongoi ngbas i s D)a tt hes t a r tofabudge tpe r i od Ans we r :D Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

8 )Thema j orc hal l e ngewhe npl a nni ngfix e do ve r he a di s_ _ __ _ _ __ . A)c al c ul a t i ngt ot a lc os t s B)c a l c ul a t i ngt hec os t al l oc a t i onr a t e C)c hoos i ngt hea ppr opr i a t el e ve lofc a pac i t y D)c hoos i ngt hea ppr opr i a t epl a nni ngpe r i od Ans we r :C Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

9 )Ane ffe c t i v epl a nf orva r i a bl eo ve r he a dc os t swi l le l i mi na t ea c t i vi t i e st ha tdonotaddva l ue . Ans we r :TRUE Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

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1 0 )Att hes t a r toft hebudge tpe r i od,mana ge me ntwi l lha vema demos tde c i s i onsr e ga r di ngt hel e v e lof fix e do ve r he a dc os t st obei nc ur r e d. Ans we r :TRUE Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

1 1 )Thepl a nni ngoffix e do ve r he a dc os t sdi ffe r sf r om t hepl anni ngofva r i abl eo ve r he a dc os t si nt e r msof t i mi ng. Ans we r :TRUE Di ff: 2 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

1 2 )Thec os t sr e l a t e dt obui l di ngs( s uc hasr e ntandi ns ur a nc e ) ,e qui pme nt( s uc ha sl e as epa yme nt sor s t r a i ght l i nede pr e c i a t i on) ,ands a l ar i e dl a bori naf a c t or yar eal le xa mpl e sofc os ti t e mst ha twoul dbepa r t oft hefix e do ve r he a dbudge t . Ans we r :TRUE Expl a na t i on:Thec os t sme nt i one da r eal lfix e dove r he a dc os t s . Di ff: 1 Obj e c t i ve :1 AACSB:Anal yt i c a lt hi nki ng

8 . 2 Obj e c t i ve8 . 2 1 )Whi c hoft hef ol l o wi ngma t he ma t i c ale x pr e s s i oni sus e dt oc a l c ul a t ebudge t e dvar i a bl eo ve r he adc os t r a t epe rout putuni t ? A)Budge t e dout puta l l owe dpe ri nputuni t×Budge t e dva r i a bl eo ve r he a dc os tr a t epe ri nputuni t B)Budge t e di nputa l l owe dpe rout putuni t÷Budge t e dvar i a bl eove r he adc os tr a t epe ri nputuni t C)Budge t e dout puta l l o we dpe ri nputuni t÷Budge t e dv ar i a bl eo ve r he a dc os tr a t epe ri nputuni t D)Budge t e di nputa l l owe dpe rout putuni t×Budge t e dva r i a bl eo ve r he adc os tr a t epe ri nputuni t Ans we r :D Di ff: 2 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

2 )Whi l ec a l c ul a t i ngt hec os t sofpr oduc t sa nds e r vi c e s ,as t anda r dc os t i ngs ys t e m_ _ _ __ _ __ . A)a l l oc a t e so ve r he a dc os t sont heba s i soft hea c t ua lo ve r he adc os tr a t e s B)us e ss t a nda r dc os t st ode t e r mi net hec os tofpr oduc t s C)doe snotke e pt r a c kofo ve r he a dc os t D)t r ac e sdi r e c tc os t st oout putb ymul t i pl yi ngt hes t a nda r dpr i c e sorr a t e sb yt hea c t ualqua nt i t i e s Ans we r :B Di ff: 2 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

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3 )Whi c hoft hef ol l o wi ngbe s tde fine ss t a ndar dc os t i ng? A)I ti st hes a mea sa c t ualc os t i ngbutdonei nr e a lt i me . B)I ti sas ys t e mt ha tt r a c e sdi r e c tc os tt oout putb ymul t i pl yi nga c t ualpr oc e s sorr a t e sb yac t ualqua nt i t i e s ofi nput s+a l l oc a t e so ve r he a db yont heba s i sofa c t ualqua nt i t i e soft hea l l oc a t i onba s eus e d. C)I ti sas ys t e mt ha tt r a c e sdi r e c tc os t st oout putpr oduc e db ymul t i pl yi ngt hes t anda r dpr i c e sorr a t e sb y t hes t anda r dqua nt i t i e sofi nput sa l l owe df ort hea c t ualout putpr oduc e d. D)I ti sas ys t e mt ha ta l l oc a t e sove r he a dc os t sont heba s i sofs t anda r do ve r he a dc os tr a t e st i me st heac t ual quant i t i e soft hea l l oc a t i onba s e dus e d. Ans we r :C Di ff: 1 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

4 )Whi c hoft hef ol l o wi ngi st hema t he ma t i c ale xpr e s s i onf ort hebudge t e dfix e dove r he adc os tpe runi tof c os ta l l oc a t i onba s e ? A)Budge t e dfix e do ve r he a dc os tpe runi tofc os tal l oc a t i onba s e=Ac t ualt ot a lc os t si nfix e do ve r he a dc os t pool÷Budge t e dt ot alqua nt i t yofc os tal l oc a t i onba s e B)Budge t e dfix e dove r he a dc os tpe runi tofc os tal l oc a t i onba s e=Budge t e dt ot alc os t si nfix e do ve r he ad c os tpool÷Budge t e dt ot alqua nt i t yofc os tal l oc a t i onba s e C)Budge t e dfix e dove r he a dc os tpe runi tofc os tal l oc a t i onba s e=Ac t ualt ot a lc os t si nfix e dove r he a dc os t pool÷Ac t ualt ot a lqua nt i t yofc os ta l l oc a t i onba s e D)Budge t e dfix e do ve r he a dc os tpe runi tofc os tal l oc a t i onba s e=Budge t e dt ot alc os t si nfix e dov e r he a d c os tpool÷Ac t ualt ot a lqua nt i t yofc os tal l oc a t i onba s e Ans we r :B Di ff: 2 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

5 )I nfle x i bl ebudge t st hec os t st ha ta r enot" fle x e d"be c a us et he yr e ma i nt hes a mewi t hi nar e l e va ntr a nge ofa c t i vi t y( s uc ha ss a l e sorout put )a r ec al l e d_ _ _ __ _ _ _. A)t ot a lo ve r he a dc os t s B)t ot albudge t e dc os t s C)fix e dc os t s D)v ar i a bl ec os t s Ans we r :C Di ff: 1 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

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6 )Re al l yGr e a tCor por a t i onmanuf a c t ur e si ndus t r i a l s i ze dl a nds c a pi ngt r a i l e r sa ndus e sbudge t e d ma c hi ne hour st oa l l oc a t eva r i a bl ema nuf a c t ur i ngove r he a d.Thef ol l owi ngi nf or ma t i onpe r t a i nst ot he c ompa ny' smanuf ac t ur i ngo ve r he adda t a : Budge t e dout putuni t s Budge t e dmac hi ne hour s Budge t e dv ar i a bl emanuf a c t ur i ngo ve r he adc os t sf or4 0 , 00 0uni t s

4 0 , 0 0 0uni t s 1 0 , 0 0 0hour s $ 3 10 , 00 0

Ac t ualout putuni t spr oduc e d Ac t ualmac hi ne hour sus e d Ac t ualv ar i a bl emanuf ac t ur i ngove r he adc os t s

3 6 , 5 0 0uni t s 1 4 , 6 0 0hour s $ 3 50 , 40 0

Wha ti st hebudge t e dvar i a bl eo ve r he a dc os tr a t epe rout putuni t ? A)$ 9 . 60 B)$ 1 2 . 4 0 C)$ 7 . 75 D)$ 3 1 . 0 0 Ans we r :C Expl a na t i on:Mac hi nehourpe runi t=10 , 00 0÷4 0 , 0 0 0=0. 2 5 Budge t e dc os tpe rmac hi nehour=$ 3 10 , 00 0÷10 , 00 0=$ 3 1 . 0 0 Budge t e dc os tpe runi t=$ 3 1 . 0 0×0. 2 5=$7 . 75 Di ff: 2 Obj e c t i ve :2 AACSB:Appl i c a t i onofknowl e dge

7 )HomePl a t eCor por a t i onmanuf ac t ur e sba s e ba l luni f or msandus e sbudge t e dma c hi ne hour st oal l oc a t e va r i abl ema nuf a c t ur i ngove r he ad.Thef ol l owi ngi nf or ma t i onpe r t a i nst ot hec ompany' smanuf ac t ur i ng ove r he a dda t a : Budge t e dout putuni t s Budge t e dmac hi ne hour s Budge t e dv ar i a bl emanuf a c t ur i ngo ve r he adc os t sf or7 , 0 00uni t s

7 , 0 0 0uni t s 1 9 , 0 0 0hour s $ 1 19 , 00 0

Ac t ualout putuni t spr oduc e d Ac t ualmac hi ne hour sus e d Ac t ualv ar i a bl emanuf ac t ur i ngove r he adc os t s

6 , 0 0 0uni t s 1 8 , 0 0 0hour s $ 1 08 , 00 0

Wha ti st hebudge t e dvar i a bl eo ve r he a dc os tr a t epe rout putuni t ? A)$ 6 . 26 B)$ 6 . 0 0 C)$ 1 7 . 0 0 D)$ 1 8 . 0 0 Ans we r :C Expl a na t i on:$ 1 19 , 00 0 /7 , 0 0 0=$ 1 7 . 0 0 Di ff: 2 Obj e c t i ve :2 AACSB:Appl i c a t i onofknowl e dge

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8 )He a l t hyEar t hPr oduc t sI nc .pr oduc e sf e r t i l i ze ra nddi s t r i but e st hepr oduc tb yus i ngc ompa nyt r uc ks . Thec ont r ol l e roft hec ompa nyus e sbudge t e dfle e thour st oa l l oc a t evar i a bl ema nuf ac t ur i ngove r he ad.The f ol l owi ngi nf or ma t i onr e l a t e st ot hec ompa ny' sma nuf a c t ur i ngove r he adda t a: Budge t e dout putuni t s Budge t e dfle e thour s Budge t e dpoundsoff e r t i l i ze r Budge t e dv ar i a bl emanuf a c t ur i ngo ve r he adc os t sf or8 0 0l oads

8 0 0t r uc kl oads 5 2 0hour s 2 8 , 0 0 0, 0 00pounds $ 9 3, 6 00 . 00

Ac t ualout putuni t spr oduc e da ndde l i ve r e d Ac t ualfle e thour s Ac t ualpoundsoff e r t i l i z e rpr oduc e da ndde l i ve r e d Ac t ualv ar i a bl emanuf ac t ur i ngove r he adc os t s

7 6 0t r uc kl oads 4 6 0hour s 2 9 , 4 0 0, 0 00pounds $ 9 1, 2 00 . 00

Wha ti st hebudge t e dvar i a bl eo ve r he a dc os tr a t epe rout putuni t ? A)$ 1 1 4. 0 0 B)$ 1 1 7. 0 0 C)$ 1 2 3 . 1 6 D)$ 1 2 0 . 0 0 Ans we r :B Expl a na t i on:Budge t e dfle e thour spe runi t=5 20÷8 0 0=0 . 6 5 Budge t e dc os tpe rfle e thour=$ 93 , 60 0 . 0 0÷5 2 0=$ 1 8 0 Budge t e dc os tpe runi t=$ 1 8 0×0 . 65=$ 1 1 7. 0 0 Di ff: 2 Obj e c t i ve :2 AACSB:Appl i c a t i onofknowl e dge

9 )S t a nda r dc os t i ngi sac os t i ngs ys t e mt ha tal l oc a t e so ve r he a dc os t sont heba s i soft hes t a nda r do ve r he a dc os tr a t e st i me st hes t a ndar dqua nt i t i e soft heal l oc a t i onba s e sa l l o we df ort hea c t ualout put spr oduc e d. Ans we r :TRUE Di ff: 1 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

1 0 )Fi x e dc os t saut oma t i c al l yi nc r e a s eorde c r e a s ewi t ht hel e v e lofac t i vi t ywi t hi nar e l e va ntr angeof a c t i vi t y . Ans we r :F ALSE Expl a na t i on:Fi x e dc os t sdonotaut oma t i c a l l yi nc r e as eorde c r e as ewi t ht hel e ve lofa c t i vi t ywi t hi nt he r e l e vantr a nge . Di ff: 1 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

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1 1 )St a nda r dc os t i ngi sac os ts ys t e mt ha tal l oc a t e so ve r he adc os t sont heba s i sofove r he adc os tr a t e sba s e d onac t ualove r he adc os t st i me st hes t a ndar dqua nt i t i e soft heal l oc a t i onba s e sal l owe df ort heac t ual out put spr oduc e d. Ans we r :F ALSE Expl a na t i on:S t anda r dc os t i ngi sac os t i ngs ys t e mt ha tt r a c e sdi r e c tc os t st oout putpr oduc e db y mul t i pl yi ngt hes t anda r dpr i c e sorr a t e sbyt hes t anda r dqua nt i t i e sofi nput sal l owe df ora c t ualout put s pr oduc e d. Di ff: 2 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

1 2 )Comput i ngs t anda r dc os t sa tt hes t ar toft hebudge tpe r i odr e s ul t si nac ompl e xr e c or dke e pi ngs ys t e m. Ans we r :F ALSE Expl a na t i on:Comput i ngs t anda r dc os t sa tt hes t a r toft hebudge tpe r i ods i mpl i fie sr e c or dke e pi ng be c aus enor e c or dsa r ene e de doft heac t ualove r he adc os t soroft hea c t ualqua nt i t i e soft hec os t al l oc a t i on bas e sus e d. Di ff: 2 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

1 3 )Li s tt hef ours t e pst ode ve l opbudge t e dv ar i a bl eo ve r he adc os t a l l oc a t i on. Ans we r :St e p1 :Choos et hepe r i odt obeus e df ort hebudge t . S t e p2:S e l e c tt hec os t al l oc a t i onba s e st ous ei na l l oc a t i ngt heva r i a bl eo ve r he a dc os t st ot heout put pr oduc e d. S t e p3:I de nt i f yt heva r i abl eo ve r he a dc os t sas s oc i a t e dwi t he a c hc os t al l oc a t i onba s e . S t e p4:Comput et her a t epe runi tofe a c hc os t a l l oc a t i onba s eus e dt oal l oc a t et heva r i abl eo ve r he a dc os t s t ot heout putpr oduc e d. Di ff: 2 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

1 4 )Wha ti sas t anda r dc os t i ngs ys t e m? Ans we r :St anda r dc os t i ngi sac os t i ngs ys t e mt ha t( 1)t r a c e sdi r e c tc os t st oout putpr oduc e db y mul t i pl yi ngt hes t anda r dpr i c e sorr a t e sbyt hes t anda r dqua nt i t i e sofi nput sal l owe df ora c t ualout put s pr oduc e da nd( 2)a l l oc a t e so ve r he a dc os t sont heba s i soft hes t anda r dove r he adc os tr a t e st i me st he s t a nda r dqua nt i t i e soft hea l l oc a t i onba s e sa l l o we df ort hea c t ualout put spr oduc e d. Di ff: 2 Obj e c t i ve :2 AACSB:Anal yt i c a lt hi nki ng

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8 . 3 Obj e c t i ve8 . 3 1 )Thev ar i a bl eo ve r he a ds pe ndi ngva r i anc eme a s ur e st hedi ffe r e nc ebe t we e n_ _ _ __ _ _ _,mul t i pl i e db yt he a c t ualqua nt i t yofvar i a bl eo ve r he a dc os t a l l oc a t i onba s eus e d. A)t hea c t ua lvar i a bl eo ve r he a dc os tpe runi ta ndt hebudge t e dva r i abl eo ve r he a dc os tpe runi t B)t hes t a nda r dv ar i a bl eo ve r he adc os tr a t ea ndt hebudge t e dva r i abl eo ve r he a dc os tr a t e C)t heac t ualva r i a bl eo ve r he adc os tpe runi ta ndt hebudge t e dfix e do ve r he a dc os tpe runi t D)t hea c t ualqua nt i t ype runi tandt hebudge t e dqua nt i t ype runi t Ans we r :A Di ff: 2 Obj e c t i ve :3 AACSB:Anal yt i c a lt hi nki ng

2 )A$ 5 , 0 0 0unf a v or a bl efle xi bl e budge tva r i a nc ei ndi c a t e st ha t_ _ __ _ _ __ . A)t hefle xi bl e budge ta mounte x c e e de da c t ualva r i a bl emanuf ac t ur i ngove r he adb y$ 5, 0 00 B)t hea c t ualv ar i a bl emanuf a c t ur i ngove r he ade x c e e de dt hefle xi bl e budge ta mountby$ 5, 0 00 C)t hefle xi bl e budge tamounte x c e e de ds t a nda r dva r i abl ema nuf a c t ur i ngo ve r he adb y$ 5, 0 00 D)t hes t a ndar dv ar i a bl emanuf ac t ur i ngove r he ade x c e e de dt hefle xi bl e budge ta mountby$5 , 00 0 Ans we r :B Di ff: 2 Obj e c t i ve :3 AACSB:Anal yt i c a lt hi nki ng

3 )Ma j e s t i cCor por a t i onmanuf ac t ur e swhe e lba r r owsa ndus e sbudge t e dma c hi nehour st oa l l oc a t e va r i abl ema nuf a c t ur i ngove r he ad.Thef ol l owi ngi nf or ma t i onr e l a t e st ot hec ompa ny' smanuf a c t ur i ng ove r he a dda t a : Budge t e dout putuni t s Budge t e dmac hi ne hour s Budge t e dv ar i a bl emanuf a c t ur i ngo ve r he adc os t sf or2 8 , 47 5uni t s

2 8 , 4 7 5uni t s 1 7 , 0 8 5hour s $ 3 58 , 78 5

Ac t ualout putuni t spr oduc e d Ac t ualmac hi ne hour sus e d Ac t ualv ar i a bl emanuf ac t ur i ngove r he adc os t s

3 2 , 4 7 5uni t s 1 5 , 0 0 0hour s $ 3 84 , 06 0

Wha ti st hefle xi bl e budge ta mountf orva r i a bl ema nuf ac t ur i ngo ve r he a d? A)$ 3 5 8, 7 85 B)$ 4 0 9, 1 85 C)$ 3 8 4 , 0 6 0 D)$ 3 3 6 , 7 5 5 Ans we r :B Expl a na t i on:Budge t e dmac hi nehour spe runi t=1 7 , 0 8 5÷2 8, 4 75=0 . 6 Budge t e dmac hi nehour sal l owe df or32 , 47 5uni t s=3 2 , 47 5×0. 6 =1 9 , 48 5 Budge t e dv ar i a bl eo ve r he adr a t epe rma c hi nehour=$ 3 58 , 78 5÷1 7 , 0 8 5=$2 1 . 0 0 Fl e xi bl e budge tamount=1 9 , 4 8 5×$2 1 . 0 0=$4 0 9 , 1 8 5 Di ff: 2 Obj e c t i ve :3 AACSB:Appl i c a t i onofknowl e dge

4 )Ma j e s t i cCor por a t i onmanuf ac t ur e swhe e lba r r owsa ndus e sbudge t e dma c hi nehour st oa l l oc a t e va r i abl ema nuf a c t ur i ngove r he ad.Thef ol l owi ngi nf or ma t i onr e l a t e st ot hec ompa ny' smanuf a c t ur i ng ove r he a dda t a : Budge t e dout putuni t s Budge t e dmac hi ne hour s

4 3 , 5 0 0uni t s 1 7 , 4 0 0hour s 8 Copyright © 2018 Pearson Education, Ltd.

Budge t e dv ar i a bl emanuf a c t ur i ngo ve r he adc os t sf or4 3 , 50 0uni t s Ac t ualout putuni t spr oduc e d Ac t ualmac hi ne hour sus e d Ac t ualv ar i a bl emanuf ac t ur i ngove r he adc os t s

$ 3 82 , 80 0 4 5 , 5 0 0uni t s 1 4 , 5 0 0hour s $ 4 35 , 70 9

Wha ti st hefle xi bl e budge tv ar i a nc ef orva r i a bl emanuf ac t ur i ngove r he ad? A)$ 3 5 , 3 0 9unf a v or a bl e B)$ 5 2 , 9 0 9unf a vor a bl e C)$ 3 5 , 3 0 9f a vor abl e D)$ 5 2 , 9 0 9f a vor a bl e Ans we r :A Expl a na t i on:Budge t e dmac hi nehour spe runi t=1 7 , 4 0 0÷4 3, 5 00=0 . 4 Budge t e dmac hi nehour sal l owe df or45 , 50 0uni t s=4 5 , 50 0×0. 4=1 8 , 2 0 0 Budge t e dv ar i a bl eo ve r he adr a t epe rma c hi nehour=$ 3 82 , 80 0÷1 7 , 4 0 0=$2 2 . 0 0 Fl e xi bl e budge tamount=1 8 , 2 0 0×$2 2 . 0 0=$4 0 0 , 4 0 0 Fl e xi bl e budge tvar i a nc e=$ 4 35 , 70 9−$ 4 0 0, 4 00=$ 3 5, 3 09unf a vor a bl e Di ff: 3 Obj e c t i ve :3 AACSB:Appl i c a t i onofknowl e dge

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5 )Ma j e s t i cCor por a t i onmanuf ac t ur e swhe e lba r r owsa ndus e sbudge t e dma c hi nehour st oa l l oc a t e va r i abl ema nuf a c t ur i ngove r he ad.Thef ol l owi ngi nf or ma t i onr e l a t e st ot hec ompa ny' smanuf a c t ur i ng ove r he a dda t a : Budge t e dout putuni t s Budge t e dmac hi ne hour s Budge t e dv ar i a bl emanuf a c t ur i ngo ve r he adc os t sf or4 3 , 50 0uni t s

4 3 , 5 0 0uni t s 1 7 , 4 0 0hour s $ 3 82 , 80 0

Ac t ualout putuni t spr oduc e d Ac t ualmac hi ne hour sus e d Ac t ualv ar i a bl emanuf ac t ur i ngove r he adc os t s

4 7 , 5 0 0uni t s 1 5 , 1 0 0hour s $ 3 87 , 51 8
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