COMMERCE 2AB3 Study Guide - Final Guide: Standard Cost Accounting, Variable Cost, Bundesautobahn 99

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 2AB3
• Professor: Karim Karim

Document Summary

True/false: fixed costs should not be included in a flexible budget since such costs are not likely to be controllable by managers. Level: medium lo: 1 ans: f: it is not important that the activity base and overhead costs be causally related when developing a flexible budget. Level: easy lo: 1 ans: f: the activity base for a flexible budget should usually be expressed in units of activity rather than in dollars. Level: easy lo: 1 ans: t: the static budget should be used primarily to determine whether cost control is being maintained. Level: medium lo: 4 ans: t: responsibility for the overhead efficiency variance should be assigned to whoever is responsible for control of the activity base underlying the flexible budget. Level: easy lo: 4 ans: t: a favorable variable overhead efficiency variance indicates that overhead has been used efficiently.