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Exam 27: Predetermined Overhead Rates and Overhead Analysis

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Question 21

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Mzimba Sofa Company has developed the following manufacturing overhead standards for its sofa production. Manufacturing overhead at Mzimba is applied to production on the basis of standard machine-hours. The above standards were based on an expected annual volume of 20,000 sofas. The actual results last year were as follows: -What was Mzimba's fixed manufacturing overhead volume variance?

A) $12,080 favorable
B) $42,920 unfavorable
C) $61,000 unfavorable
D) $73,080 favorable

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

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Question 22

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Gayman Corporation applies manufacturing overhead to products on the basis of standard machine-hours. The company bases its predetermined overhead rate on 7,300 machine-hours. The company's total budgeted fixed manufacturing overhead is $28,470. In the most recent month, the total actual fixed manufacturing overhead was $28,940. The company actually worked 7,510 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 7,670 machine-hours. What was the overall fixed manufacturing overhead volume variance for the month?

A) $819 favorable
B) $819 unfavorable
C) $470 unfavorable
D) $1,443 favorable

E) A) and B)
F) B) and C)

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Question 23

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Wintersmith Corporation estimates that its variable manufacturing overhead is $11.60 per machine-hour and its fixed manufacturing overhead is $278,124 per period. -If the denominator level of activity is 4,200 machine-hours, the variable element in the predetermined overhead rate would be:

The denominator activity represents the actual level of activity recorded for a period.

Wriphoff Company uses a standard cost system to collect costs related to the production of its clay bud vases. Manufacturing overhead at Wriphoff is applied to production on the basis of standard direct labor-hours. The overhead standards used at Wriphoff are as follows: The standards above were based on an expected annual volume of 40,000 bud vases or 36,000 direct labor-hours. The actual results for last year were as follows: -What was Wriphoff's fixed manufacturing overhead budget variance for last year?

Wintersmith Corporation estimates that its variable manufacturing overhead is $11.60 per machine-hour and its fixed manufacturing overhead is $278,124 per period. -If the denominator level of activity is 4,200 machine-hours, the fixed element in the predetermined overhead rate would be:

A furniture manufacturer 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: -What is the predetermined overhead rate to the nearest cent?

An unfavorable fixed manufacturing overhead volume variance would be caused by:

The Ferris Company applies manufacturing overhead costs to products on the basis of standard direct labor-hours. The standard cost card shows that 3 direct labor-hours are required per unit of product. For August, the company budgeted to work 90,000 direct labor-hours and to incur the following total manufacturing overhead costs: During August, the company completed 28,000 units of product, worked 86,000 direct labor-hours, and incurred the following total manufacturing overhead costs: The denominator activity in the predetermined overhead rate is 90,000 direct labor-hours. -For August, the variable overhead rate variance is:

Modine Corporation has provided the following data for September. Required: a. Compute the budget variance for September. Show your work! b. Compute the volume variance for September. Show your work!

If all four of Argo Corporation's overhead variances are favorable, Argo's overhead will be overapplied.

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 manufacturing overhead volume variance.

Shiplett Corporation applies overhead to products based on machine-hours. The denominator level of activity is 8,800 machine-hours. The budgeted fixed manufacturing overhead costs are $317,680. In March, the actual fixed manufacturing overhead costs were $314,300 and the standard machine-hours allowed for the actual output were 8,500 machine-hours. Required: a. Compute the budget variance for March. Show your work! b. Compute the volume variance for March. Show your work!

The volume variance represents the difference between actual fixed manufacturing overhead costs and budgeted fixed manufacturing overhead costs.

The Ferris Company applies manufacturing overhead costs to products on the basis of standard direct labor-hours. The standard cost card shows that 3 direct labor-hours are required per unit of product. For August, the company budgeted to work 90,000 direct labor-hours and to incur the following total manufacturing overhead costs: During August, the company completed 28,000 units of product, worked 86,000 direct labor-hours, and incurred the following total manufacturing overhead costs: The denominator activity in the predetermined overhead rate is 90,000 direct labor-hours. -For August, the variable overhead efficiency variance is:

Jessep Corporation has a standard cost system in which manufacturing overhead is applied on the basis of standard direct labor-hours. The company has provided the following data concerning its fixed manufacturing overhead costs in March: -The fixed manufacturing overhead budget variance is:

Mzimba Sofa Company has developed the following manufacturing overhead standards for its sofa production. Manufacturing overhead at Mzimba is applied to production on the basis of standard machine-hours. The above standards were based on an expected annual volume of 20,000 sofas. The actual results last year were as follows: -What was Mzimba's variable overhead efficiency variance?

Labossiere Corporation has provided the following data for November. -The volume variance for November is:

The predetermined overhead rate (variable and fixed) is $7.50 per machine-hour and the denominator activity level is 135,000 machine-hours. If the variable portion of the predetermined overhead rate is $3.00 per machine-hour, then the budgeted fixed factory overhead for the year is:

The fixed manufacturing overhead volume variance is due to: