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Exam 21: Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

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Question 81

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Surma Incorporated makes a single product-a critical part used in commercial airline seats. The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period. Data concerning the most recent year appear below: The fixed component of the predetermined overhead rate is closest to:

A) $5.43 per machine-hour
B) $5.57 per machine-hour
C) $6.51 per machine-hour
D) $6.68 per machine-hour

E) All of the above
F) A) and D)

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Question 82

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A manufacturer of playground equipment has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period: The fixed manufacturing overhead volume variance for the period is closest to:

A) $2,213 F
B) $2,113 F
C) $3,045 F
D) $832 U

E) None of the above
F) B) and C)

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Question 83

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If the standard hours allowed for the actual output of the period is greater than the denominator level of activity (in hours), then the overhead volume variance will be favorable.

Asper Corporation has provided the following data for February. The budget variance for February is:

Harris Corporation uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of standard direct labor-hours (DLHs) . The company has provided the following data: The volume variance would be:

Muscato Corporation estimates that its variable manufacturing overhead is $19.00 per machine-hour and its fixed manufacturing overhead is $1,442,100 per period. If the denominator level of activity is 7,500 machine-hours, the fixed component in the predetermined overhead rate would be:

Chojnowski Incorporated makes a single product-a cooling coil used in commercial refrigerators. The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below: The variable component of the predetermined overhead rate is closest to:

The higher the denominator activity level used to compute the predetermined overhead rate, the higher the predetermined overhead rate.

Emanuele Incorporated makes a single product--a critical part used in commercial airline seats. The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period. Data concerning the most recent year appear below: Required: a. Compute the variable component of the company's predetermined overhead rate. b. Compute the fixed component of the company's predetermined overhead rate. c. Compute the company's predetermined overhead rate. d. Determine the variable overhead rate variance for the year. e. Determine the variable overhead efficiency variance for the year. f. Determine the fixed overhead budget variance for the year. g. Determine the fixed overhead volume variance for the year. h. Determine whether overhead was underapplied or overapplied for the year and by how much.

Ronda Manufacturing Corporation uses a standard cost system with machine-hours as the activity base for overhead. Last year, Ronda incurred $840,000 of fixed manufacturing overhead and generated a $42,000 favorable fixed manufacturing overhead budget variance. The following data relate to last year's operations: What amount of total fixed manufacturing overhead cost did Ronda apply to production last year?

Reade Incorporated makes a single product-an electrical motor used in many long-haul trucks. The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period. Data concerning the most recent year appear below: The total manufacturing overhead is underapplied or overapplied by how much?

Fredin Incorporated makes a single product-an electrical motor used in many long-haul trucks. The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below: The fixed component of the predetermined overhead rate is closest to:

Mcgreal Incorporated has provided the following data concerning its overhead variances for the most recent period: The total of the overhead variances is:

Songster Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual overhead costs for the most recent month appear below: The company based its original budget on 3,500 machine-hours. The company actually worked 3,700 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 3,820 machine-hours. What was the overall fixed manufacturing overhead budget variance for the month?

Benoit Corporation's manufacturing overhead includes $13.20 per machine-hour for variable manufacturing overhead and $555,408 per period for fixed manufacturing overhead. Required: Determine the predetermined overhead rate for the denominator level of activity of 5,700 machine-hours.

Wineman Incorporated makes a single product-an electrical motor used in many long-haul trucks. The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period. Data concerning the most recent year appear below: The variable overhead rate variance is:

Zotta Enterprises uses standard costing and applies manufacturing overhead cost to products on the basis of standard direct labor-hours (DLHs) . Budgeted and actual data relating to manufacturing overhead for last year appear below: The budgeted fixed manufacturing overhead cost was:

Khat Incorporated makes a single product--a cooling coil used in commercial refrigerators. The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period. Data concerning the most recent year appear below: Required: Determine whether overhead was underapplied or overapplied for the year and by how much.

Fenderson Incorporated makes a single product--a cooling coil used in commercial refrigerators. The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period. Data concerning the most recent year appear below: The company incurred a total of $370,077 in manufacturing overhead cost during the year. Required: a. Compute the variable component of the company's predetermined overhead rate. b. Compute the fixed component of the company's predetermined overhead rate. c. Compute the company's predetermined overhead rate. d. Determine whether overhead was underapplied or overapplied for the year and by how much.

Garrity Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $6.80 per machine-hour and fixed manufacturing overhead cost of $503,272 per period. If the denominator level of activity is 7,600 machine-hours, the variable element in the predetermined overhead rate would be: