11) In most companies, variances are investigated only if they exceed a minimum dollar or percentage deviation from budgeted amounts.
12) The total flexible-budget variance can be broken down into a price variance and a usage variance.
13) A usage variance measures actual deviations from the quantity of inputs that should have been used to achieve the actual output quantity.
14) The difference between applied and budgeted fixed overhead is the production-volume variance.
15) When actual volume is less than expected volume, fixed overhead is overapplied.
16) A cost system that applies actual direct materials and actual direct-labour costs to products or services but uses standards for applying overhead is known as a standard costing system.
17) The only way to account for standard cost variances is to adjust income in the current period.
18) Underapplied overhead is always the difference between the budgeted overhead and the overhead applied.