1. What will result if the actual overhead costs incurred are greater than the amount in the flexible budget?

   The controllable overhead variance will be unfavorable.

   The overhead volume variance will be favorable.

   The overhead volume variance will be unfavorable.

   The controllable overhead variance will be favorable.

2 points

QUESTION 6

1. For which of the following reasons does the volume variance arise?

   Overhead costs incurred were greater or less than the amount budgeted.

   The company operated at more or less units of production activity than expected during the period.

   Actual activity equaled the volume used to establish the overhead cost per unit.

   The company purchased more or less materials for production than the amount used.

2 points

QUESTION 7

1. What does an unfavorable overhead volume variance indicate?

   The quantity of production was less than what was anticipated.

   The company spent more costs on overhead than expected.

   Production took longer than expected.

   The company produced more units than it budgeted.

2 points

QUESTION 8

1. In which of the following situations will the overhead volume variance be favorable?

   When more units are produced than were originally planned

   When actual overhead costs are less than the flexible budget

   When the predetermined overhead rate was set too low

   When there are units remaining in ending inventory

2 points

QUESTION 9

1. Which of the following values is used in the calculations for both the controllable overhead variance and the overhead volume variance?

   Overhead applied to production using the predetermined overhead rate

   Flexible budget level of overhead for the actual level of production

   Actual overhead incurred

   None of these answer choices are used in both calculations.