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

(Appendix 11A)In a standard cost system, overhead is applied to production on the basis of:

(Appendix 11A)The Dillon Corporation makes and sells a single product.Overhead costs are applied on the basis of standard direct labor-hours.The standard cost card shows that 5 direct labor-hours are required per unit.The Dillon Corporation had the following budgeted and actual data for March: The variable overhead rate variance for March is:

(Appendix 11A)Bakos Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $8.80 per machine-hour and fixed manufacturing overhead cost of $100, 688 per period.If the denominator level of activity is 2, 800 machine-hours, the variable component in the predetermined overhead rate would be:

(Appendix 11A)Dexter Corporation uses a standard cost system and applies manufacturing overhead cost to units of product on the basis of standard direct labor-hours (DLHs).Information on Dexter Corporation's manufacturing overhead costs for last period is given below: Given these data, the underapplied or overapplied overhead cost for the period would be:

(Appendix 11A)Nova Corporation produces a single product and uses a standard cost system to help control costs.Overhead is applied to production on the basis of standard machine-hours.According to the company's flexible budget, the following overhead costs should be incurred at an activity level of 18, 000 machine-hours (the denominator activity level chosen for the current year): During the current year, the following operating results were recorded: At the end of the year, the company's Manufacturing Overhead account showed total debits for actual overhead costs of $145, 100 and total credits of $136, 000 for overhead applied.The difference ($9, 100)represents under-applied overhead, the cause of which management would like to know. Required: a.Compute the predetermined overhead rate that would have been used during the year, showing separately the variable and fixed components of the rate. b.Show how the $136, 000 of overhead actually applied was computed. c.Analyze the $9, 100 under-applied overhead figure in terms of the variable overhead rate and efficiency variances and the fixed manufacturing overhead budget and volume variances.

(Appendix 11A)An unfavorable volume variance means that a firm operated at an activity level that was below the activity level planned for the period.

(Appendix 11A)Reidenbach Corporation applies manufacturing overhead to products on the basis of standard machine-hours.The budgeted fixed manufacturing overhead cost for the most recent month was $17, 100 and the actual fixed manufacturing overhead cost for the month was $17, 450.The company based its original budget on 4, 500 machine-hours.The standard hours allowed for the actual output of the month totaled 4, 810 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?

(Appendix 11A)Which of the following variances is generally the least significant from the standpoint of cost control?

(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, 000 machine-hours, the fixed component in the predetermined overhead rate would be:

(Appendix 11A)Acuff Corporation applies manufacturing overhead to products on the basis of standard machine-hours.Budgeted and actual overhead costs for the most recent month appear below: The company based its original budget on 6, 200 machine-hours.The company actually worked 6, 560 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 6, 420 machine-hours.What was the overall fixed manufacturing overhead budget variance for the month?

(Appendix 11A)The Forbes Corporation uses a standard cost system in which overhead costs are applied to products on the basis of standard direct labor-hours (DLHs).The following data applied to the company's activities for June: The volume variance for June is: