Exam 27: Predetermined Overhead Rates and Overhead Analysis

Hoops Corporation applies manufacturing overhead to products on the basis of standard machine-hours. The company's predetermined overhead rate for fixed manufacturing overhead is $1.30 per machine-hour and the denominator level of activity is 3,700 machine-hours. In the most recent month, the total actual fixed manufacturing overhead was $4,450 and the company actually worked 4,000 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 3,880 machine-hours. What was the overall fixed manufacturing overhead volume variance for the month?

The Tate Company uses a standard costing system in which manufacturing overhead is applied on the basis of standard direct labor-hours (DLHs). The company recorded the following costs and activity for September: -The amount of fixed manufacturing overhead cost contained in the company's flexible budget for manufacturing overhead for September was:

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: During August, the company completed 28,000 units of product, worked 86,000 direct labor-hours, and incurred the following total manufacturing overhead costs: The denominator activity in the predetermined overhead rate is 90,000 direct labor-hours. -For August, the fixed manufacturing overhead budget variance is:

The economic impact of the inability to reach a target denominator level of activity would best be measured by:

Glasner Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $2.70 per machine-hour and fixed manufacturing overhead cost of $289,784 per period. If the denominator level of activity is 8,800 machine-hours, the variable element in the predetermined overhead rate would be:

Hugh 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 6,700 machine-hours. The company actually worked 6,810 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 6,940 machine-hours. What was the overall fixed manufacturing overhead budget variance for the month?

Desormeaux 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 $21,600 and the actual fixed manufacturing overhead cost for the month was $21,120. The company based its original budget on 5,400 machine-hours. The standard hours allowed for the actual output of the month totaled 5,850 machine-hours. What was the overall fixed manufacturing overhead budget variance for the month?

Guadalupe Manufacturing Company uses a standard cost system with direct labor-hours as the activity base for overhead. Last year, Guadalupe applied a total of $936,000 of fixed manufacturing overhead cost to the products it produced. The following data relate to production for the year: What was Guadalupe's fixed manufacturing overhead volume variance?

The fixed manufacturing overhead budget variance is more meaningful than the volume variance for cost control purposes.

Labossiere Corporation has provided the following data for November. -The budget variance for November is:

Mzimba Sofa Company has developed the following manufacturing overhead standards for its sofa production. 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: -What was Mzimba's variable overhead rate variance?

Sheeder Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $18.70 per machine-hour and fixed manufacturing overhead cost of $1,817,202 per period. If the denominator level of activity is 8,200 machine-hours, the fixed element in the predetermined overhead rate would be:

Kuhlman 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 2,800 machine-hours. The company actually worked 2,730 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 2,860 machine-hours. What was the overall fixed manufacturing overhead volume variance for the month?

The Moore Company produces and sells a single product. A standard cost card for the product follows: Standard Cost Card-per unit of product: The company manufactured and sold 18,000 units of product during the year. A total of 70,200 yards of material was purchased during the year at cost of $4.20 per yard. 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 labor-hours during the year at a cost of $9.75 per hour. Overhead cost is applied to products on the basis of standard direct labor-hours. The denominator activity level (direct labor-hours) was 22,500 hours. Budgeted fixed manufacturing overhead costs as shown on the flexible budget were $157,500, while actual fixed manufacturing 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 labor rate and efficiency variances for the year. c. Compute the variable overhead rate and efficiency variances for the year. d. Compute the fixed manufacturing overhead budget and volume variances for the year.

Which of the following variances would be useful in calling attention to possible problems in the control of spending on overhead items?

Henley Company uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of standard direct labor-hours. For the month of January, the fixed manufacturing overhead volume variance was $2,220 favorable. The company uses a fixed manufacturing overhead rate of $1.85 per direct labor-hour. During January, the standard direct labor-hours allowed for the month's output:

Mattern Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual fixed manufacturing overhead costs for the most recent month appear below: The company based its original budget on 6,100 machine-hours. The company actually worked 5,710 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 5,540 machine-hours. What was the overall fixed manufacturing overhead volume variance for the month?

If the denominator activity used to compute the predetermined overhead rate is equal to the standard activity allowed for the actual output of the period, then there is no volume variance.

Michetti Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual overhead costs for the month appear below: The company based its original budget on 4,300 machine-hours. The company actually worked 4,140 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 4,200 machine-hours. What was the overall fixed manufacturing overhead budget variance for the month?

Mauve 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 following data pertain to last month: The fixed manufacturing overhead budget variance is: