Exam 11: Flexible Budgeting and Analysis of Overhead Costs

Use the following information to answer Questions Match Point, Inc. has the following overhead standards: Variable overhead: 4 hours at $8 per hour Fixed overhead: 4 hours at $10 per hour The standards were based on a planned activity of 20,000 machine hours when 5,000 units were scheduled for production. Actual data follow. Variable overhead incurred: $167,750 Fixed overhead incurred: $210,000 Machine hours worked: 19,800 Actual units produced: 5,100 -The amount of variable overhead that Match Point applied to production is:

The right (credit) side of the production-overhead account accumulates actual overhead costs incurred.

Use the following information to answer the following Questions Commerce Corporation has a high probability of operating at 40,000 activity hours during the upcoming period, and lower probabilities of operating at 30,000 hours and 50,000 hours. The company's flexible budget revealed the following: -If Commerce operated at 35,000 hours, its total budgeted cost would be:

Briefly describe the procedures that are used to apply manufacturing overhead to production for companies that use (1) normal costing systems and (2) those that use standard costing systems.

Use the following information to answer Questions Match Point, Inc. has the following overhead standards: Variable overhead: 4 hours at $8 per hour Fixed overhead: 4 hours at $10 per hour The standards were based on a planned activity of 20,000 machine hours when 5,000 units were scheduled for production. Actual data follow. Variable overhead incurred: $167,750 Fixed overhead incurred: $210,000 Machine hours worked: 19,800 Actual units produced: 5,100 -Match Point's variable-overhead efficiency variance is:

Hope, Inc. has a standard variable overhead rate of $4 per machine hour, with each completed unit expected to take three machine hours to produce. A review of the company's accounting records found the following: Actual variable overhead: $210,000 Variable-overhead efficiency variance: $18,000U Variable-overhead spending variance: $30,000F How many units did Hope actually produce during the period?

The activity measure selected for use in a variable- and fixed-overhead flexible budget:

Which variance is commonly associated with measuring the cost of under- or over-utilization of plant capacity?

Use the following information to answer the following Questions Bannister Motors Corporation reported the following variances for the period just ended: Variable-overhead spending variance: $50,000U Variable-overhead efficiency variance: $28,000U Fixed-overhead budget variance: $70,000U Fixed-overhead volume variance: $30,000U -If Bannister prepared an overhead cost performance report, which of these overhead variances is likely to be excluded from the report?