ACCT 3130 Chapter 8

What is the first step of developing budgeted variable overhead cost rates?

• Choose the period to be used for the budget

• Select the cost-allocation bases to use in allocating VOH costs to output produced

• Identify the VOH costs associated with each cost-allocation base

• Compute the rate per unit of each cost-allocation based used to allocate VOH costs to output produced

What is the second step of developing budgeted variable overhead cost rates?

• Choose the period to be used for the budget

• Select the cost-allocation bases to use in allocating VOH costs to output produced

• Identify the VOH costs associated with each cost-allocation base

• Compute the rate per unit of each cost-allocation based used to allocate VOH costs to output produced

What is the third step of developing budgeted variable overhead cost rates?

• Choose the period to be used for the budget

• Select the cost-allocation bases to use in allocating VOH costs to output produced

• Identify the VOH costs associated with each cost-allocation base

• Compute the rate per unit of each cost-allocation based used to allocate VOH costs to output produced

What is the fourth step of developing budgeted variable overhead cost rates?

• Choose the period to be used for the budget

• Select the cost-allocation bases to use in allocating VOH costs to output produced

• Identify the VOH costs associated with each cost-allocation base

• Compute the rate per unit of each cost-allocation based used to allocate VOH costs to output produced

X $ / DMH =

• Budgeted VOH Rate

• Actual VOH Rate

• Budgeted VOH Cost/Unit output unit

• Budgeted FOH Rate

• Budgeted FOH Cost/Unit per output unit

(X $ / DMH) x (Y DMH/unit of production) =

• Budgeted VOH Rate

• Actual VOH Rate

• Budgeted VOH Cost/Unit output unit

• Budgeted FOH Rate

• Budgeted FOH Cost/Unit per output unit

Production volume variance is difficult to interpret due to the nature of costs involved ad how they are budgeted.

• True

• False

Which of the following are true about fixed costs:

• Somewhat inflexible

• Fairly Flexible

• While production flexes up or down, fixed costs remain the same

• May be set years in advance & difficult to change quickly

• Budgeted similar to variable cost

Assuming this is VOH, what is the label for 1?

Assuming this is VOH, what is the label for 3?