Exam 23: Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

The Dodge Company makes and sells a single product and uses a standard cost system in which manufacturing overhead costs are applied to units of product on the basis of standard direct labor-hours. The standard cost card shows that 5 direct labor-hours are required per unit of product. The Dodge Company had the following budgeted and actual data for the year: The budgeted direct labor-hours is used as the denominator activity for the month. -The variable overhead rate variance was:

Buell Corporation has provided the following data for June. -The volume variance for June is:

A volume variance and an efficiency variance are computed for fixed manufacturing overhead costs.

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: -What was the variable overhead efficiency variance for the period to the nearest dollar?

Franklin Glass Works uses a standard cost system in which manufacturing overhead is applied on the basis of standard direct labor-hours. Each unit requires two standard hours of direct labor for completion. The denominator activity for the year was based on budgeted production of 200,000 units. Total overhead was budgeted at $900,000 for the year, and the fixed manufacturing overhead rate was $1.50 per direct labor-hour. The actual data pertaining to the manufacturing overhead for the year are presented below: -Franklin's fixed manufacturing overhead budget variance for the year is:

Heersink Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $10.50 per machine-hour and fixed manufacturing overhead cost of $108,108 per period.If the denominator level of activity is 2,700 machine-hours,the fixed element in the predetermined overhead rate would be:

In a standard costing system where the denominator activity for the predetermined overhead rate is labor-hours,overhead costs are applied to work in process on the basis of actual hours worked.

Jay Company uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of standard direct labor-hours (DLHs).The information below pertains to a recent month's activity: The volume variance would be:

Able Control Company, which manufactures electrical switches, uses a standard cost system in which manufacturing overhead costs are applied to units of product on the basis of standard direct labor-hours (DLHs). The standard overhead costs are shown below: *Based on 300,000 DLHs per month. The following information is available for the month of October: • Plans called for the production of 60,000 switches. • 56,000 switches were actually produced. • 275,000 direct labor-hours were worked at a total cost of $2,550,000. • Actual variable manufacturing overhead costs were $2,340,000. • Actual fixed manufacturing overhead costs were $3,750,000. -The fixed manufacturing overhead budget variance for October was:

The higher the denominator level of activity:

The Phelps Company applies overhead costs to products on the basis of standard direct labor-hours. The standard cost card shows that 5 direct labor-hours are required per unit of product. Phelps Company had the following budgeted and actual data for March: The budgeted direct labor-hours is used as the denominator activity for the month. -The fixed manufacturing overhead volume variance for March is:

The Hawkins Company uses a standard costing system in which manufacturing overhead is applied on the basis of standard direct labor-hours (DLHs). During February, the company actually used 9,200 direct labor-hours and made 2,900 units of finished product. The standard cost card for one unit of product includes the following: Variable factory overhead: 3 DLHs $4.75 per DLH Fixed factory overhead: 3 DLHs $3.00 per DLH For February, the company incurred $28,450 in fixed manufacturing overhead costs and recorded a $900 favorable volume variance. -The denominator activity level in direct labor-hours used by Hawkins in setting the predetermined overhead rate for February is:

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: -How much overhead was applied to products during the period to the nearest dollar?

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: -What was the fixed manufacturing overhead budget variance for the period to the nearest dollar?

The fixed manufacturing overhead volume variance will be unfavorable if production volume is less than sales volume.

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?

Seroka Corporation estimates that its variable manufacturing overhead is $6.90 per machine-hour and its fixed manufacturing overhead is $745,290 per period. -If the denominator level of activity is 9,000 machine-hours,the variable element in the predetermined overhead rate would be:

A manufacturer of playground equipment 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: -How much fixed manufacturing overhead was applied to products during the period to the nearest dollar?

Overhead is applied to work in process in a standard costing system by:

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: -How much overhead was applied to products during the period to the nearest dollar?