COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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identifying the variable overhead costs associated with each cost-allocation base
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estimating the budgeted denominator level based on expected utilization of available capacity
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selecting the cost-allocation bases to use
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choosing the period to be used for the budget
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Detailed explanation-1: -12-4 Steps in developing a budgeted variable-overhead cost rate are: 1. Choose the period to be used for the budget, 2. Select the cost-allocation bases to use in allocating variable overhead costs to the output produced, 3. Identify the variable overhead costs associated with each cost-allocation base, and 4.
Detailed explanation-2: -Steps in developing a budgeted fixed-overhead rate are 1. Choose the period to use for the budget, 2. Select the cost-allocation base to use in allocating fixed overhead costs to output produced, 3. Identify the fixed-overhead costs associated with each cost-allocation base, and 4.
Detailed explanation-3: -Answer and Explanation: The correct answer is A) total fixed overhead variance. Total fixed overhead variance is not a flexible budget variance because its budget fixed overhead cost is not flexible, but static.
Detailed explanation-4: -Answer and Explanation: The correct answer is C) Spending and efficiency variance. The variable overhead flexible budget is classified into spending variance and efficiency variance.