A budget is a financial plan for a future period. The budget is prepared usually for a financial year. Budgets can be prepared for revenue and expenses. Budgets help the company to plan for future income and expenses and evaluate business performance. The manufacturing overhead budget is prepared to estimate the amount of overhead for the budgeted period. The overhead includes the variable overhead and fixed overhead. To prepare: the manufacturing overhead budget.

Question

Which of the following statements concerning standards is correct? A. Standards cannot be used for product costing and cash budgeting. B. Standards should not be attainable by the average worker. C. Variances are likely when compared to actual results. D. All of the above. E. None of these.

Answer 1

Question

Chapter 9, Problem 9.5E

1.

To determine

Concept Introduction:

A budget is a financial plan for a future period. The budget is prepared usually for a financial year. Budgets can be prepared for revenue and expenses. Budgets help the company to plan for future income and expenses and evaluate business performance.

The manufacturing overhead budget is prepared to estimate the amount of overhead for the budgeted period. The overhead includes the variable overhead and fixed overhead.

To prepare: the manufacturing overhead budget.

2.

To determine

Concept Introduction:

A budget is a financial plan for a future period. The budget is prepared usually for a financial year. Budgets can be prepared for revenue and expenses. Budgets help the company to plan for future income and expenses and evaluate business performance.

The manufacturing overhead budget is prepared to estimate the amount of overhead for the budgeted period. The overhead includes the variable overhead and fixed overhead.

To prepare: the predetermined overhead rate.

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Which of the following statements concerning standards is correct? A. Standards cannot be used for product costing and cash budgeting. B. Standards should not be attainable by the average worker. C. Variances are likely when compared to actual results. D. All of the above. E. None of these.

What is material quantity variance

Amish Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $276,660 for the year, and machine usage is estimated at 125,300 hours. For the year, $296,534 of overhead costs are incurred and 132,300 hours are used. Compute the manufacturing overhead rate for the year.