Exam 19: Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

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 fixed manufacturing overhead volume variance?

Wintersmith Corporation estimates that its variable manufacturing overhead is $11.60 per machine-hour and its fixed manufacturing overhead is $278,124 per period. -If the denominator level of activity is 4,200 machine-hours,the fixed element in the predetermined overhead rate would be:

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: -What is the predetermined overhead rate to the nearest cent?

Wintersmith Corporation estimates that its variable manufacturing overhead is $11.60 per machine-hour and its fixed manufacturing overhead is $278,124 per period. -If the denominator level of activity is 4,300 machine-hours,the predetermined overhead rate would be:

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 applied to work in process during September was:

The higher the denominator level of activity:

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.

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.

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

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 variable overhead rate variance is:

A manufacturer of industrial 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: -How much overhead was applied to products during the period to the nearest dollar?

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?

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

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:

A manufacturer of playground equipment 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: -What was the fixed manufacturing overhead budget variance for the period to the nearest dollar?

Hart Company's labor standards call for 500 direct labor-hours to produce 250 units of product.During October the company worked 625 direct labor-hours and produced 300 units.The standard hours allowed for October would be:

The fixed manufacturing overhead volume variance is due to:

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 denominator activity represents the actual level of activity recorded for a period.

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: -What is the predetermined overhead rate to the nearest cent?