Question 1

What was the budgeted fixed factory overhead cost for January?

Accepted Answer

A)  $30,625. 
B)  $31,500. 
C)  $32,375. 
D)  $33,250. 
A)  $30,625. 
B)  $31,500. 
C)  $32,375. 
D)  $33,250.

Question 2

What was the total predetermined overhead rate,rounded to the nearest cent?

Accepted Answer

A)  $23.59. 
B)  $23.91. 
C)  $23.98. 
D)  $24.30. 
A)  $23.59. 
B)  $23.91. 
C)  $23.98. 
D)  $24.30.

Question 3

Lab Corp.uses a standard cost system.Direct labour information for Product CER for the month of October follows:  
What were the actual hours worked?

Accepted Answer

A)  1,400 hours. 
B)  1,402 hours. 
C)  1,598 hours. 
D)  1,600 hours. 
A)  1,400 hours. 
B)  1,402 hours. 
C)  1,598 hours. 
D)  1,600 hours.

Question 4

(Appendix 10B)To record the incurrence of direct labour cost and its use in production,the general ledger would include what entry to the Labour Rate Variance account?

Accepted Answer

A)  $240 credit. 
B)  $240 debit. 
C)  $340 debit. 
D)  $340 credit. 
A)  $240 credit. 
B)  $240 debit. 
C)  $340 debit. 
D)  $340 credit.

Question 5

What was the variable overhead spending variance for March?

Accepted Answer

A)  $4,900 unfavourable. 
B)  $11,060 unfavourable. 
C)  $14,700 unfavourable. 
D)  $17,300 unfavourable. 
A)  $4,900 unfavourable. 
B)  $11,060 unfavourable. 
C)  $14,700 unfavourable. 
D)  $17,300 unfavourable.

Question 6

Patridge Company uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of direct labour hours.The information below is taken from the company's flexible budget for manufacturing overhead:  
During the year,the company operated at exactly 80% of capacity,but it applied manufacturing overhead to products based on the 90% level.What was the company's fixed overhead volume variance for the year?

Accepted Answer

A)  $6,000 favourable. 
B)  $6,000 unfavourable. 
C)  $12,000 favourable. 
D)  $12,000 unfavourable. 
A)  $6,000 favourable. 
B)  $6,000 unfavourable. 
C)  $12,000 favourable. 
D)  $12,000 unfavourable.

Question 7

(Appendix 10C)What is the sum of the sales mix variance and the sales quantity variance?

Accepted Answer

A)  The flexible budget variance. 
B)  The sales volume variance. 
C)  The master budget variance. 
D)  The market share variance. 
A)  The flexible budget variance. 
B)  The sales volume variance. 
C)  The master budget variance. 
D)  The market share variance.

Question 8

(Appendix 10B)The following is the standard cost card for X Company's only product:   
The company manufactured and sold 18,000 units of product during the year.A total of 70,200 metres of material was purchased during the year at cost of $4.20 per metre.All of this material was used to manufacture the 18,000 units.The company records showed no beginning or ending inventories for the year.
The company worked 29,250 direct labour hours during the year at a cost of $9.75 per hour.Overhead cost is applied to products on the basis of direct labour hours.The denominator activity level (direct labour hours)was 22,500 hours.Budgeted fixed overhead costs as shown on the flexible budget were $157,500,while actual fixed overhead costs were $156,000.Actual variable overhead costs were $90,000.
Required:
a)Compute the direct materials price and quantity variances for the year.
b)Compute the direct labour rate and efficiency variances for the year.
c)Compute the variable overhead spending and efficiency variances for the year.
d)Compute the fixed overhead budget and volume variances for the year.
e)(Appendix 10B)Prepare a journal entry to record the variable overhead costs incurred and applied,including the results of the variance analysis.
f)(Appendix 10B)Prepare a journal entry to record the fixed overhead costs incurred and applied,including the results of the variance analysis.

Accepted Answer

a)Direct materials price and quantity va

Question 9

What was the fixed overhead budget variance for March?

Accepted Answer

A)  $900 favourable. 
B)  $3,000 unfavourable. 
C)  $3,900 favourable. 
D)  $7,750 favourable. 
A)  $900 favourable. 
B)  $3,000 unfavourable. 
C)  $3,900 favourable. 
D)  $7,750 favourable.

Question 10

To measure controllable production inefficiencies,which of the following is the best basis for a company to use in establishing the standard hours allowed for the output of one unit of product?

Accepted Answer

A)  Average historical performance for the last several years. 
B)  Engineering estimates based on ideal performance. 
C)  Engineering estimates based on attainable performance. 
D)  The hours per unit that would be required for the present workforce to satisfy expected demand over the long run. 
A)  Average historical performance for the last several years. 
B)  Engineering estimates based on ideal performance. 
C)  Engineering estimates based on attainable performance. 
D)  The hours per unit that would be required for the present workforce to satisfy expected demand over the long run.

Question 11

(Appendix 10A)For raw material A,what were the mix and yield variances,respectively?

Accepted Answer

A)  $60 favourable and $440 unfavourable. 
B)  $200 unfavourable and $300 favourable. 
C)  $300 favourable and $200 unfavourable. 
D)  $300 unfavourable and $200 favourable.Yield = (2/5 * 1,200 - 230 * 2)* 10 = $200 unfavourable. 
A)  $60 favourable and $440 unfavourable. 
B)  $200 unfavourable and $300 favourable. 
C)  $300 favourable and $200 unfavourable. 
D)  $300 unfavourable and $200 favourable.Yield = (2/5 * 1,200 - 230 * 2)* 10 = $200 unfavourable.

Question 12

Direct labour hour is often assumed as the sole cost driver in analyzing the total variable overhead cost variance into spending and efficiency variances.
Required:
a)Will direct labour cost ever be a better cost driver of variable overhead costs than direct labour hour? Explain
b)How is the standard variable overhead rate different from the standard labour rate in variance analysis? Explain.

Accepted Answer

a)Direct labour cost can be a better cos

Question 13

What was the materials price variance for the month?

Accepted Answer

A)  $2,550 favourable. 
B)  $2,550 unfavourable. 
C)  $2,700 favourable. 
D)  $2,700 unfavourable. 
A)  $2,550 favourable. 
B)  $2,550 unfavourable. 
C)  $2,700 favourable. 
D)  $2,700 unfavourable.

Question 14

(Appendix 10C)A favourable sales volume variance for a substitute product in a multiple-product firm does NOT necessarily imply a favourable sales mix variance for that substitute product.

Accepted Answer

A) True 
 B)False

Question 15

The standards for direct labour for a product are 2.5 hours at $8 per hour.Last month,9,000 units of the product were made,and the labour efficiency variance was $8,000 favourable.What was the actual number of hours worked during the past period?

Accepted Answer

A)  20,500 hours. 
B)  21,500 hours. 
C)  22,500 hours. 
D)  23,500 hours. 
A)  20,500 hours. 
B)  21,500 hours. 
C)  22,500 hours. 
D)  23,500 hours.

Question 16

Borden Enterprises uses standard costing.For the month of April,the company reported the following data:  
What was the labour rate variance for April?

Accepted Answer

A)  $2,850 favourable. 
B)  $2,850 unfavourable. 
C)  $3,760 favourable. 
D)  $3,760 unfavourable. 
A)  $2,850 favourable. 
B)  $2,850 unfavourable. 
C)  $3,760 favourable. 
D)  $3,760 unfavourable.

Question 17

What was the price variance for the direct materials acquired by the company during March?

Accepted Answer

A)  $7,550 favourable. 
B)  $7,550 unfavourable. 
C)  $8,250 favourable. 
D)  $8,250 unfavourable. 
A)  $7,550 favourable. 
B)  $7,550 unfavourable. 
C)  $8,250 favourable. 
D)  $8,250 unfavourable.

Question 18

Henley Company uses a standard cost system that applies manufacturing overhead to units of product on the basis of direct labour hours.For the month of January,the fixed manufacturing overhead volume variance was $2,220 favourable.The company uses a fixed manufacturing overhead rate of $1.85 per direct labour hour.What were the standard direct labour hours allowed for the month's output in January?

Accepted Answer

A)  They exceeded the denominator hours by 1,000. 
B)  They fell short of the denominator hours by 1,000. 
C)  They exceeded the denominator hours by 1,200. 
D)  They fell short of the denominator hours by 1,200. 
A)  They exceeded the denominator hours by 1,000. 
B)  They fell short of the denominator hours by 1,000. 
C)  They exceeded the denominator hours by 1,200. 
D)  They fell short of the denominator hours by 1,200.

Question 19

What was the variable overhead efficiency variance?

Accepted Answer

A)  $500 favourable. 
B)  $500 unfavourable. 
C)  $520 favourable. 
D)  $520 unfavourable. 
A)  $500 favourable. 
B)  $500 unfavourable. 
C)  $520 favourable. 
D)  $520 unfavourable.

Question 20

What was the amount of fixed manufacturing overhead cost applied to work in process during September?

Accepted Answer

A)  $54,150. 
B)  $57,000. 
C)  $59,850. 
D)  $61,400. 
A)  $54,150. 
B)  $57,000. 
C)  $59,850. 
D)  $61,400.

What was the budgeted fixed factory overhead cost for January?

What was the total predetermined overhead rate,rounded to the nearest cent?

Lab Corp.uses a standard cost system.Direct labour information for Product CER for the month of October follows: What were the actual hours worked?

(Appendix 10B)To record the incurrence of direct labour cost and its use in production,the general ledger would include what entry to the Labour Rate Variance account?

What was the variable overhead spending variance for March?

(Appendix 10C)What is the sum of the sales mix variance and the sales quantity variance?

What was the fixed overhead budget variance for March?

To measure controllable production inefficiencies,which of the following is the best basis for a company to use in establishing the standard hours allowed for the output of one unit of product?

(Appendix 10A)For raw material A,what were the mix and yield variances,respectively?

What was the materials price variance for the month?

(Appendix 10C)A favourable sales volume variance for a substitute product in a multiple-product firm does NOT necessarily imply a favourable sales mix variance for that substitute product.

The standards for direct labour for a product are 2.5 hours at $8 per hour.Last month,9,000 units of the product were made,and the labour efficiency variance was $8,000 favourable.What was the actual number of hours worked during the past period?

Borden Enterprises uses standard costing.For the month of April,the company reported the following data: What was the labour rate variance for April?

What was the price variance for the direct materials acquired by the company during March?

What was the variable overhead efficiency variance?

What was the amount of fixed manufacturing overhead cost applied to work in process during September?

Managerial Accounting and the Business Environment

Cost Terms, Concepts, and Classifications

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Job-Order Costing

Systems Design: Process Costing

Activity-Based Costing: a Tool to Aid Decision Making

Variable Costing: a Tool for Management

Budgeting

Reporting for Control

Relevant Costs for Decision Making

Capital Budgeting Decisions

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Exam 10: Standard Costs and Overhead Analysis

What was the budgeted fixed factory overhead cost for January?

What was the total predetermined overhead rate,rounded to the nearest cent?

Lab Corp.uses a standard cost system.Direct labour information for Product CER for the month of October follows: What were the actual hours worked?

(Appendix 10B)To record the incurrence of direct labour cost and its use in production,the general ledger would include what entry to the Labour Rate Variance account?

What was the variable overhead spending variance for March?

(Appendix 10C)What is the sum of the sales mix variance and the sales quantity variance?

What was the fixed overhead budget variance for March?

To measure controllable production inefficiencies,which of the following is the best basis for a company to use in establishing the standard hours allowed for the output of one unit of product?

(Appendix 10A)For raw material A,what were the mix and yield variances,respectively?

What was the materials price variance for the month?

(Appendix 10C)A favourable sales volume variance for a substitute product in a multiple-product firm does NOT necessarily imply a favourable sales mix variance for that substitute product.

The standards for direct labour for a product are 2.5 hours at $8 per hour.Last month,9,000 units of the product were made,and the labour efficiency variance was $8,000 favourable.What was the actual number of hours worked during the past period?

Borden Enterprises uses standard costing.For the month of April,the company reported the following data: What was the labour rate variance for April?

What was the price variance for the direct materials acquired by the company during March?

What was the variable overhead efficiency variance?

What was the amount of fixed manufacturing overhead cost applied to work in process during September?

Managerial Accounting and the Business Environment

Cost Terms, Concepts, and Classifications

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Job-Order Costing

Systems Design: Process Costing

Activity-Based Costing: a Tool to Aid Decision Making

Variable Costing: a Tool for Management

Budgeting

Reporting for Control

Relevant Costs for Decision Making

Capital Budgeting Decisions

Financial Statement Analysis Online

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