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Exam 18:Flexible Budgets, Standard Costs, and Variance Analysis

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Question 71

Multiple Choice

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The variable overhead rate variance is:

A) $18,955 F
B) $19,125 F
C) $19,125 U
D) $18,955 U

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

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Question 72

Multiple Choice

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If the denominator level of activity is 7,500 machine-hours, the variable component in the predetermined overhead rate would be:

A) $208.75 per machine-hour
B) $192.28 per machine-hour
C) $211.28 per machine-hour
D) $19.00 per machine-hour

E) All of the above
F) B) and C)

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Question 73

True/False

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An unfavorable volume variance means that the company operated at an activity level greater than that planned for the period.

Gaters 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 company incurred a total of $240,080 in manufacturing overhead cost during the year. Required: Determine whether overhead was underapplied or overapplied for the year and by how much.

The budgeted fixed manufacturing overhead cost was:

A company has a standard cost system in which fixed and variable manufacturing overhead costs are applied to products on the basis of direct labor-hours.The company's choice of the denominator level of activity has no effect on the fixed portion of the predetermined overhead rate.

Trumbauer 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 fixed overhead volume variance is:

The variable component of the predetermined overhead rate is closest to:

The fixed overhead budget variance is:

Nemes 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 fixed component of the predetermined overhead rate is closest to:

Wangerin Corporation applies overhead to products based on machine-hours.The denominator level of activity is 6,900 machine-hours.The budgeted fixed manufacturing overhead costs are $240,810.In April, the actual fixed manufacturing overhead costs were $245,640 and the standard machine-hours allowed for the actual output were 7,200 machine-hours. Required: a.Compute the budget variance for April.Show your work! b.Compute the volume variance for April.Show your work!

The volume variance for May is:

Likes 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 total amount of manufacturing overhead applied is closest to:

Sulema, Inc.repairs and refinishes antique furniture.Manufacturing overhead at Sulema is applied to production on the basis of standard direct labor-hours.Which overhead variance(s) at Sulema would be unfavorably affected if a significant amount of glue is being wasted by inexperienced direct labor workers?

You have just been hired as the controller of the Eastern Division of Global Manufacturing.Performance records for last year are incomplete, with only the following data available: Required: Prepare a complete analysis of manufacturing overhead for the past year.Indicate actual, standard, and denominator activity levels; variable overhead rate and efficiency variances; and fixed manufacturing overhead budget and volume variances.

The fixed manufacturing overhead applied to products during the period is closest to:

The standard direct labor-hours allowed for the output was:

Gremminger 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 labor-hours allowed for the actual output of the period.Data concerning the most recent year appear below: The variable overhead rate variance is:

The variable overhead rate variance is:

The denominator activity level in direct labor-hours used by Chuba in setting the predetermined overhead rate was: