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

(Appendix 11A)Derf Corporation uses a standard cost system in which it applies manufacturing overhead on the basis of standard direct labor-hours.Two direct labor-hours are required for each unit produced.The denominator activity was set at 9, 000 units.Manufacturing overhead was budgeted at $135, 000 for the period;20 percent of this cost was fixed.The 17, 200 hours worked during the period resulted in production of 8, 500 units.Variable manufacturing overhead cost incurred was $108, 500 and fixed manufacturing overhead cost was $28, 000. The variable overhead rate variance for the period was:

(Appendix 11A)The Murray Corporation makes and sells a single product.The company recorded the following activity and cost data for May: The fixed component of the predetermined overhead rate is $0.95 per direct labor-hour. The fixed manufacturing overhead budget variance for May was:

(Appendix 11A)Derf Corporation uses a standard cost system in which it applies manufacturing overhead on the basis of standard direct labor-hours.Two direct labor-hours are required for each unit produced.The denominator activity was set at 9, 000 units.Manufacturing overhead was budgeted at $135, 000 for the period;20 percent of this cost was fixed.The 17, 200 hours worked during the period resulted in production of 8, 500 units.Variable manufacturing overhead cost incurred was $108, 500 and fixed manufacturing overhead cost was $28, 000. The variable overhead efficiency variance for the period was:

(Appendix 11A)Littleton Manufacturing uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard machine-hours.At standard, each unit of product requires one machine-hour to complete.The standard variable overhead is $1.80 per machine-hour and $432, 000 per year.The denominator level of activity is 120, 000 machine-hours, or 120, 000 units.Actual data for the year were as follows: Required: a.What are the predetermined variable and fixed manufacturing overhead rates? b.Compute the variable overhead rate and efficiency variances. c.Compute the fixed manufacturing overhead budget and volume variances.

(Appendix 11A)The Claus Corporation makes and sells a single product and uses standard costing.During January, the company actually used 8, 700 direct labor-hours (DLHs)and produced 3, 000 units of product.The standard cost card for one unit of product includes the following: Variable factory overhead: 3.0 DLHs @ $4.00 per DLH. Fixed factory overhead: 3.0 DLHs @ $3.50 per DLH. For January, the company incurred $22, 000 of actual fixed manufacturing overhead costs and recorded a $875 favorable volume variance. The denominator level of activity in direct labor-hours (DLHs)used by Claus in setting the predetermined overhead rate for January is:

(Appendix 11A)A manufacturing company uses a standard costing system in which standard machine-hours (MHs)is 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 predetermined overhead rate per MH is closest to:

(Appendix 11A)An outdoor barbecue grill 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: The fixed manufacturing overhead volume variance for the period is closest to:

(Appendix 11A)Kingdon Corporation's manufacturing overhead includes $7.10 per machine-hour for variable manufacturing overhead and $207, 000 per period for fixed manufacturing overhead. Required: Determine the predetermined overhead rate for the denominator level of activity of 4, 600 machine-hours.

(Appendix 11A)The Claus Corporation makes and sells a single product and uses standard costing.During January, the company actually used 8, 700 direct labor-hours (DLHs)and produced 3, 000 units of product.The standard cost card for one unit of product includes the following: Variable factory overhead: 3.0 DLHs @ $4.00 per DLH. Fixed factory overhead: 3.0 DLHs @ $3.50 per DLH. For January, the company incurred $22, 000 of actual fixed manufacturing overhead costs and recorded a $875 favorable volume variance. The fixed manufacturing overhead cost used to compute the predetermined overhead rate was:

(Appendix 11A)The Murray Corporation makes and sells a single product.The company recorded the following activity and cost data for May: The fixed component of the predetermined overhead rate is $0.95 per direct labor-hour. The fixed manufacturing overhead used to calculate the predetermined overhead rate was:

(Appendix 11A)A furniture manufacturer uses a standard costing system in which standard machine-hours (MHs)is 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 predetermined overhead rate is closest to:

(Appendix 11A)Hairr Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $9.50 per machine-hour and fixed manufacturing overhead cost of $947, 672 per period.If the denominator level of activity is 8, 900 machine-hours, the predetermined overhead rate would be:

(Appendix 11A)The fixed manufacturing overhead volume variance is more meaningful than the budget variance for cost control purposes.

(Appendix 11A)Homer Corporation has a standard cost system in which manufacturing overhead is applied on the basis of standard machine-hours.The company has provided the following data concerning its manufacturing overhead costs for last year: The volume variance was:

(Appendix 11A)Homer Corporation has a standard cost system in which manufacturing overhead is applied on the basis of standard machine-hours.The company has provided the following data concerning its manufacturing overhead costs for last year: The fixed manufacturing overhead budget variance was:

(Appendix 11A)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.A fixed manufacturing overhead volume variance will NOT necessarily occur in a month in which the fixed manufacturing overhead applied to units of product on the basis of standard hours allowed differs from the budgeted fixed manufacturing overhead.

(Appendix 11A)Faessler Corporation applies overhead to products based on machine-hours.The denominator level of activity is 6, 500 machine-hours.The budgeted fixed manufacturing overhead costs are $242, 450.In July, the actual fixed manufacturing overhead costs were $242, 490 and the standard machine-hours allowed for the actual output were 7, 000 machine-hours. Required: a.Compute the budget variance for July.Show your work! b.Compute the volume variance for July.Show your work!

(Appendix 11A)Tillinghast Corporation estimates that its variable manufacturing overhead is $9.60 per machine-hour and its fixed manufacturing overhead is $14, 630 per period. If the denominator level of activity is 1, 100 machine-hours, the predetermined overhead rate would be:

(Appendix 11A)Traveller Corporation sells one product and uses a standard cost system.Last year the overhead volume variance was zero.Which of the following is correct?

(Appendix 11A)The Adlake Corporation makes and sells a single product and uses a standard cost system.During October, the company budgeted $300, 000 in manufacturing overhead cost at a denominator activity of 20, 000 machine-hours.At standard, each unit of finished product requires 5 machine-hours.The following cost and activity were recorded during October: The amount of overhead cost that the company applied to work in process for October was: