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: $\begin{array}{llcc} \text {Denominator level of activity } &1,100\quad\text { DLHs }\\ \text { Overhead costs at the denominator activity level: } &\\ \text { Variable overhead cost } &\$7,920\\ \text { Fixed overhead cost } &\$10,120\\ \end{array}$ The following data pertain to operations for the most recent period: $\begin{array}{lrc} \text { Actual hours ................................................ } & 1,200& \text { DLHs } \\ \text { Standard hours allowed for the actual output............... } & 1,166 &\text { DLHs }\\ \text { Actual total variable manufacturing overhead cost....... }&\$ 8,460 \\ \text { Actual total fixed manufacturing overhead cost } & \$ 9.070 \end{array}$ -What was the fixed manufacturing overhead budget variance for the period to the nearest dollar?

A) $1,050 F B) $257 F C) $1,657 U D) $1,970 U A) $1,050 F B) $257 F C) $1,657 U D) $1,970 U

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: $\begin{array}{llcc} \text {Denominator level of activity } &1,100\quad\text { DLHs }\\ \text { Overhead costs at the denominator activity level: } &\\ \text { Variable overhead cost } &\$7,920\\ \text { Fixed overhead cost } &\$10,120\\ \end{array}$ The following data pertain to operations for the most recent period: $\begin{array}{lrc} \text { Actual hours ................................................ } & 1,200& \text { DLHs } \\ \text { Standard hours allowed for the actual output............... } & 1,166 &\text { DLHs }\\ \text { Actual total variable manufacturing overhead cost....... }&\$ 8,460 \\ \text { Actual total fixed manufacturing overhead cost } & \$ 9.070 \end{array}$ -What was the fixed manufacturing overhead volume variance for the period to the nearest dollar?

A) $313 U B) $607 F C) $920 F D) $513 F A) $313 U B) $607 F C) $920 F D) $513 F

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: $\begin{array}{llcc} \text {Denominator level of activity................ } &3,900&\text {DLHs } \\ \text { Fixed overhead cost............................. } &\$49,530\\ \end{array}$ The following data pertain to operations for the most recent period: $\begin{array}{lrc} \text { Actual hours ................................................ } & 3,800& \text { DLHs } \\ \text { Standard hours allowed for the actual output............... } &3,861 &\text { DLHs }\\ \text { Actual total variable manufacturing overhead cost....... }&\$ 50,230\\ \end{array}$ -What was the fixed manufacturing overhead budget variance for the period to the nearest dollar?

A) $806 U B) $700 U C) $1,970 F D) $1,195 F A) $806 U B) $700 U C) $1,970 F D) $1,195 F

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: $\begin{array}{llcc} \text {Denominator level of activity } &1,100\quad\text { DLHs }\\ \text { Overhead costs at the denominator activity level: } &\\ \text { Variable overhead cost } &\$7,920\\ \text { Fixed overhead cost } &\$10,120\\ \end{array}$ The following data pertain to operations for the most recent period: $\begin{array}{lrc} \text { Actual hours ................................................ } & 1,200& \text { DLHs } \\ \text { Standard hours allowed for the actual output............... } & 1,166 &\text { DLHs }\\ \text { Actual total variable manufacturing overhead cost....... }&\$ 8,460 \\ \text { Actual total fixed manufacturing overhead cost } & \$ 9.070 \end{array}$ -What is the predetermined overhead rate to the nearest cent?

A) $15.94 B) $16.40 C) $14.61 D) $15.03 A) $15.94 B) $16.40 C) $14.61 D) $15.03

The Ferris Company applies manufacturing overhead costs to products on the basis of standard direct labor-hours.The standard cost card shows that 3 direct labor-hours are required per unit of product.For August,the company budgeted to work 90,000 direct labor-hours and to incur the following total manufacturing overhead costs: $\begin{array}{llcc} \text { Total variable manufacturing overhead costs......} &\$99,000\\ \text {Total fixed manufacturing overhead costs ........... } &\$118,800\\ \end{array}$ During August,the company completed 28,000 units of product,worked 86,000 direct labor-hours,and incurred the following total manufacturing overhead costs: $\begin{array}{llcc} \text { Total variable manufacturing overhead costs......} &\$98,900\\ \text {Total fixed manufacturing overhead costs ........... } &\$115,300\\ \end{array}$ The denominator activity in the predetermined overhead rate is 90,000 direct labor-hours. -For August,the variable overhead efficiency variance is:

A) $1,800 F B) $0 C) $2,200 U D) $2,200 F A) $1,800 F B) $0 C) $2,200 U D) $2,200 F

Labossiere Corporation has provided the following data for November. $\begin{array}{llcc} \text {Denominator level of activity........................... } &7,000& \text {machine-hours } \\ \text { Budgeted fixed manufacturing overhead costs } &\$204,400\\ \text { Fixed portion of the predetermined overhead } &\\ \text { rate................................................................. } &\$29.20& \text { per machine-hour } \\ \text {Actual level of activity..................................... } &7,100& \text { machine-hours } \\ \text { Standard machine-hours allowed for the actual } &\\ \text {output.............................................................. } &6,700& \text { machine-hours } \\ \text {Actual fixed manufacturing overhead costs...... } &\$209,990\\ \end{array}$ -The budget variance for November is:

A) $5,590 U B) $2,920 F C) $5,590 F D) $2,920 U A) $5,590 U B) $2,920 F C) $5,590 F D) $2,920 U

The following data for August has been provided by Mirabelli Corporation. $\begin{array}{llcc} \text {Denominator level of activity........................... } &3,700& \text {machine-hours } \\ \text { Budgeted fixed manufacturing overhead costs } &\$85,840\\ \text {Actual level of activity..................................... } &4,00& \text { machine-hours } \\ \text { Standard machine-hours allowed for the actual } &\\ \text {output.............................................................. } &3,800& \text { machine-hours } \\ \text {Actual fixed manufacturing overhead costs...... } &\$88,080\\ \end{array}$ -The volume variance for August is:

A) $6,960 F B) $6,960 U C) $2,320 F D) $2,320 U A) $6,960 F B) $6,960 U C) $2,320 F D) $2,320 U

The following data pertain to operations for the most recent period: $\begin{array}{lrc} \text { Actual hours ................................................ } & 6,400& \text { DLHs } \\ \text { Standard hours allowed for the actual output............... } & 6,273 &\text { DLHs }\\ \text { Actual total variable manufacturing overhead cost....... }&\$ 58,110 \\ \end{array}$ -How much fixed manufacturing overhead was applied to products during the period to the nearest dollar?

A) $59,210 B) $59,907 C) $61,120 D) $58,110 A) $59,210 B) $59,907 C) $61,120 D) $58,110

Exam 10: Compute and Interpret the Fixed Overhead Variances

Wolle Corporation estimates that its variable manufacturing overhead is $11.60 per machine-hour and its fixed manufacturing overhead is $298,936 per period. -If the denominator level of activity is 4,300 machine-hours,the variable element in the predetermined overhead rate would be:

(Multiple Choice)

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Question 41

The fixed manufacturing overhead budget variance and the fixed manufacturing overhead volume variance taken together explain the difference between the actual fixed manufacturing overhead cost incurred and the fixed manufacturing overhead cost applied to production.

(True/False)

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Question 42

If the standard hours allowed for the actual output of the period is greater than the denominator level of activity (in hours),then the overhead budget variance will be unfavorable.

(True/False)

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Question 43

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: Denominator level of activity 1,100 DLHs Overhead costs at the denominator activity level: Variable overhead cost \7 ,920 Fixed overhead cost \1 0,120 The following data pertain to operations for the most recent period: Actual hours ................................................ 1,200 DLHs Standard hours allowed for the actual output............... 1,166 DLHs Actual total variable manufacturing overhead cost....... \ 8,460 Actual total fixed manufacturing overhead cost \ 9.070 -What was the fixed manufacturing overhead budget variance for the period to the nearest dollar?

(Multiple Choice)

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Question 44

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: Denominator level of activity 1,100 DLHs Overhead costs at the denominator activity level: Variable overhead cost \7 ,920 Fixed overhead cost \1 0,120 The following data pertain to operations for the most recent period: Actual hours ................................................ 1,200 DLHs Standard hours allowed for the actual output............... 1,166 DLHs Actual total variable manufacturing overhead cost....... \ 8,460 Actual total fixed manufacturing overhead cost \ 9.070 -What was the fixed manufacturing overhead volume variance for the period to the nearest dollar?

(Multiple Choice)

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Question 45

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: Denominator level of activity................ 3,900 DLHs Fixed overhead cost............................. \4 9,530 The following data pertain to operations for the most recent period: Actual hours ................................................ 3,800 DLHs Standard hours allowed for the actual output............... 3,861 DLHs Actual total variable manufacturing overhead cost....... \ 50,230 -What was the fixed manufacturing overhead budget variance for the period to the nearest dollar?

(Multiple Choice)

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Question 46

Wriphoff Company uses a standard cost system to collect costs related to the production of its clay bud vases.Manufacturing overhead at Wriphoff is applied to production on the basis of standard direct labor-hours.The overhead standards used at Wriphoff are as follows: Standard Cost Per Hour Standard Cost Per Vase Variable overhead ........ \ 6.40 \ 5.76 Fixed overhead .......... \ 9.60 \ 8.64 The standards above were based on an expected annual volume of 40,000 bud vases or 36,000 direct labor-hours.The actual results for last year were as follows: Number of vases produced........... 35,600 Direct labor-hours incurred ........... 34,250 Variable overhead cost ................ \ 212,350 Fixed overhead cost \ldots\ldots\ldots\ldots\ldots\ldots\ldots... \ 338,000 -What total amount of manufacturing overhead cost (variable and fixed)did Wriphoff apply to the 35,600 vases produced during last year?

(Multiple Choice)

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Question 47

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: Denominator level of activity 1,100 DLHs Overhead costs at the denominator activity level: Variable overhead cost \7 ,920 Fixed overhead cost \1 0,120 The following data pertain to operations for the most recent period: Actual hours ................................................ 1,200 DLHs Standard hours allowed for the actual output............... 1,166 DLHs Actual total variable manufacturing overhead cost....... \ 8,460 Actual total fixed manufacturing overhead cost \ 9.070 -What is the predetermined overhead rate to the nearest cent?

(Multiple Choice)

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Question 48

The Ferris Company applies manufacturing overhead costs to products on the basis of standard direct labor-hours.The standard cost card shows that 3 direct labor-hours are required per unit of product.For August,the company budgeted to work 90,000 direct labor-hours and to incur the following total manufacturing overhead costs: Total variable manufacturing overhead costs...... \9 9,000 Total fixed manufacturing overhead costs ........... \1 18,800 During August,the company completed 28,000 units of product,worked 86,000 direct labor-hours,and incurred the following total manufacturing overhead costs: Total variable manufacturing overhead costs...... \9 8,900 Total fixed manufacturing overhead costs ........... \1 15,300 The denominator activity in the predetermined overhead rate is 90,000 direct labor-hours. -For August,the variable overhead efficiency variance is:

(Multiple Choice)

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Question 49

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 actual direct labor-hours differ from standard hours allowed.

(True/False)

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Question 50

Macdowell Corporation's manufacturing overhead includes $2.50 per machine-hour for supplies;$3.50 per machine-hour for indirect labor;$214,200 per period for salaries;and $307,020 per period for depreciation. Required: Determine the predetermined overhead rate if the denominator level of activity is 8,500 machine-hours.Show your work!

(Essay)

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Question 51

Labossiere Corporation has provided the following data for November. Denominator level of activity........................... 7,000 machine-hours Budgeted fixed manufacturing overhead costs \2 04,400 Fixed portion of the predetermined overhead rate................................................................. \2 9.20 per machine-hour Actual level of activity..................................... 7,100 machine-hours Standard machine-hours allowed for the actual output.............................................................. 6,700 machine-hours Actual fixed manufacturing overhead costs...... \2 09,990 -The budget variance for November is:

(Multiple Choice)

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Question 52

Which of the following variances is caused by a difference between the denominator activity in the predetermined overhead rate and the standard hours allowed for the actual production of the period?

(Multiple Choice)

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Question 53

The following data for August has been provided by Mirabelli Corporation. Denominator level of activity........................... 3,700 machine-hours Budgeted fixed manufacturing overhead costs \8 5,840 Actual level of activity..................................... 4,00 machine-hours Standard machine-hours allowed for the actual output.............................................................. 3,800 machine-hours Actual fixed manufacturing overhead costs...... \8 8,080 -The volume variance for August is:

(Multiple Choice)

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Question 54

Shiplett Corporation applies overhead to products based on machine-hours.The denominator level of activity is 8,800 machine-hours.The budgeted fixed manufacturing overhead costs are $317,680.In March,the actual fixed manufacturing overhead costs were $314,300 and the standard machine-hours allowed for the actual output were 8,500 machine-hours. Required: a.Compute the budget variance for March.Show your work! b.Compute the volume variance for March.Show your work!

(Essay)

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Question 55

The following data pertain to operations for the most recent period: Actual hours ................................................ 6,400 DLHs Standard hours allowed for the actual output............... 6,273 DLHs Actual total variable manufacturing overhead cost....... \ 58,110 -How much fixed manufacturing overhead was applied to products during the period to the nearest dollar?

(Multiple Choice)

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Question 56

Which of the following is not correct?

(Multiple Choice)

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Question 57

Mzimba Sofa Company has developed the following manufacturing overhead standards for its sofa production. Standard Cost Per Sofa Variable overhead (0.9 machine-hours @\ 32.00 per machine-hour)..... \2 8.80 Fixed overhead (0.9 machine-hours @\ 58.00 per machine-hour)..... \5 2.20 Manufacturing overhead at Mzimba is applied to production on the basis of standard machine-hours.The above standards were based on an expected annual volume of 20,000 sofas.The actual results last year were as follows: Number of sofas produced ........... 21,400 Machine-hours incurred .............. 19,800 Variable overhead cost ................. \ 625,086 Fixed overhead cost .................... \ 1,105,000 -What was Mzimba's fixed manufacturing overhead volume variance?

(Multiple Choice)

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Question 58

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: $\begin{array}{llcc} \text {Denominator level of activity } &8,900\quad \text { \mathrm{MHs} }\\ \text { Overhead costs at the denominator activity level: } &\\ \text { Variable overhead cost } &\$86,775\\ \text {Fixed overhead cost } &\$137,950\\ &\\ \text { } &\\\end{array}$ The following data pertain to operations for the most recent period: Actual hours 9,000 MHs Standard hours allowed for the actual output. 8,977 MHs Actual total variable manufacturing overhead cost \8 8,650 Actual total fixed manufacturing overhead cost \1 36,850 -What was the fixed manufacturing overhead budget variance for the period to the nearest dollar?

(Multiple Choice)

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Question 59

Web Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard machine-hours.During February,the company used a denominator activity of 80,000 machine-hours in computing its predetermined overhead rate.However,only 75,000 standard machine-hours were allowed for the month's actual production.If the fixed manufacturing overhead volume variance for February was $6,400 unfavorable,then the total budgeted fixed manufacturing overhead cost for the month was:

(Multiple Choice)

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Question 60

Wolle Corporation estimates that its variable manufacturing overhead is $11.60 per machine-hour and its fixed manufacturing overhead is $298,936 per period. -If the denominator level of activity is 4,300 machine-hours,the variable element in the predetermined overhead rate would be:

The fixed manufacturing overhead budget variance and the fixed manufacturing overhead volume variance taken together explain the difference between the actual fixed manufacturing overhead cost incurred and the fixed manufacturing overhead cost applied to production.

If the standard hours allowed for the actual output of the period is greater than the denominator level of activity (in hours),then the overhead budget variance will be unfavorable.

Which of the following variances is caused by a difference between the denominator activity in the predetermined overhead rate and the standard hours allowed for the actual production of the period?

Which of the following is not correct?

Absorption Costing and Variable Costing

Statement of Cash Flows

Further Classification of Labor Costs

Cost of Quality

Least-Squares Regression Computations

Absorption Costing and Variable Costing

Abc Action Analysis

Use Activity-Based Costing Technique to Compute Product Costs for External Reports

Fifo Method

Journal Entries to Record Variances

Transfer Pricing

The Concept of Present Value

Income Taxes in Capital Budgeting Decisions

Pricing Products and Services

Profitability Analysis

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