The company has provided the following data for the most recent month: Budgeted level of activity 3,900 MHs Actual level of activity 4,100 MHs Standard variable manufacturing overhead r
Trang 1Appendix 8A
Predetermined Overhead Rates and Overhead Analysis in a
Standard Costing System
True / False Questions
1 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 production volume differs from sales volume
True False
2 The fixed manufacturing overhead volume variance is more meaningful than the budget variance for cost control purposes
True False
3 In a standard costing system, if the actual fixed manufacturing overhead cost
exceeds the budgeted fixed manufacturing overhead cost for the period, then fixed manufacturing overhead cost would be overapplied for the period
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Trang 26 The higher the denominator activity level used to compute the predetermined overhead rate, the lower the predetermined overhead rate
9 A fixed manufacturing overhead volume variance occurs as the result of a difference between the denominator level of activity (in hours) and the standard hours allowed for the actual output of the period
True False
10 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 there is a fixed manufacturing overhead budget variance
True False
11 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 the standard labor-hours allowed for the actual output
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Trang 314 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 The
company's choice of the denominator level of activity affects the fixed manufacturingoverhead volume variance
True False
Multiple Choice Questions
15 Sulema, Inc repairs and refinishes antique furniture Manufacturing overhead at Sulema is applied to production on the basis of standard direct labor-hours Which overhead variance(s) at Sulema would be unfavorably affected if the cost of solvents used to strip the old paint from the furniture unexpectedly doubles in price?
A variable overhead rate
16 When computing standard cost variances, the difference between actual and
standard price multiplied by actual quantity yields a(n):
A combined price and quantity
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Trang 417 The fixed manufacturing overhead budget variance is:
A the difference between budgeted fixed manufacturing overhead cost and actual fixed manufacturing overhead cost
B the difference between actual fixed manufacturing overhead cost and applied fixedmanufacturing overhead cost
C the difference between budgeted fixed manufacturing overhead cost and applied fixed manufacturing overhead cost
D the difference between fixed overhead at the planned level of activity and the flexible budget for actual activity
18 A volume variance is computed for:
A both variable and fixed manufacturing
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Trang 520 Traveller Corporation sells one product and uses a standard cost system Last year the overhead volume variance was zero Which of the following is correct?
A Actual variable manufacturing overhead cost was equal to standard variable manufacturing overhead cost
B Total applied overhead was equal to total actual
22 In a standard cost system, overhead is applied to production on the basis of:
A the denominator hours chosen for the
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Trang 623 Dori Castings is a job order shop that uses a standard cost system Manufacturing overhead costs are applied on the basis of standard direct labor-hours A volume variance will exist for Dori in a month where:
A production volume differs from sales
$6.20 per MH The company had budgeted its fixed manufacturing overhead cost at
$40,000 for the month During the month, the actual total variable manufacturing overhead was $48,970 and the actual total fixed manufacturing overhead was
$43,000 The actual level of activity for the period was 8,300 MHs What was the total
of the variable overhead rate and fixed manufacturing overhead budget variances forthe month?
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Trang 726 Omary Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs) The company has provided the following data for the most recent month:
Budgeted level of activity 3,900 MHs
Actual level of activity 4,100 MHs
Standard variable
manufacturing overhead rate $7.60
per MH Budgeted fixed manufacturing
overhead cost
$50,00 0 Actual total variable
manufacturing overhead
$31,98 0 Actual total fixed manufacturing
overhead
$54,00 0
What was the total of the variable overhead rate and fixed manufacturing overhead budget variances for the month?
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Trang 827 Dexter Corporation uses a standard cost system and applies manufacturing overheadcost 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:
Standard hours allowed for actual production 38,000 DLHs
Denominator hours used in computing the predetermined
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Trang 928 Steinhagen 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:
Original Budget
Actual Costs
Total overhead cost $46,280 $48,800
The company based its original budget on 2,600 machine-hours The company actually worked 2,790 machine-hours during the month The standard hours allowed for the actual output of the month totaled 2,960 machine-hours What was the overallfixed manufacturing overhead volume variance for the month?
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Trang 1029 Semaan Corporation applies manufacturing overhead to products on the basis of standard machine-hours Budgeted and actual overhead costs for the month appear below:
Original Budget
Actual Costs
Total overhead cost $56,860 $59,990
The company based its original budget on 2,700 machine-hours The company actually worked 2,960 machine-hours during the month The standard hours allowed for the actual output of the month totaled 3,030 machine-hours What was the overallfixed manufacturing overhead budget variance for the month?
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Trang 1130 Hairr Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $9.50 per machine-hour and fixed manufacturing overhead cost of
$947,672 per period If the denominator level of activity is 8,900 machine-hours, the predetermined overhead rate would be:
Total actual manufacturing overhead
cost incurred
$294,00 0 Units of product completed 3,800
Actual machine-hours worked 19,422
The amount of overhead cost that the company applied to work in process for October was:
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Trang 1232 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?
$12,720 In the most recent month, the total actual fixed manufacturing overhead was $12,370 The company actually worked 5,350 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?
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Trang 1334 Masek Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs) The company has provided the following data for the most recent month:
Budgeted level of activity 2,000 MHs
Actual level of activity 2,400 MHs
Standard variable
manufacturing overhead rate $5.90
per MH Budgeted fixed manufacturing
overhead cost
$50,00 0 Actual total variable
manufacturing overhead
$14,88 0 Actual total fixed manufacturing
overhead
$49,00 0
What was the fixed manufacturing overhead budget variance for the month?
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Trang 1435 Pizzi, Inc had the following fixed manufacturing overhead variances last year:
Fixed overhead budget
variance
$30,00 0
Unfavorab le
Fixed overhead volume
Pizzi uses hours as an activity base for overhead and used 48,000 hours as the denominator activity level for the year Total actual fixed manufacturing overhead was $150,000 The actual number of machine-hours incurred were 50,000 What were Pizzi's standard hours allowed for actual output?
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Trang 1537 At the beginning of last year, Tari Corporation budgeted $300,000 of fixed
manufacturing overhead and chose a denominator level of activity of 600,000
machine-hours At the end of the year, Tari's fixed manufacturing overhead budget variance was $9,000 favorable Its fixed manufacturing overhead volume variance was $15,000 favorable Actual direct labor-hours for the year were 625,000 What was Tari's total standard machine-hours allowed for last year's output?
Original Budget Actual Costs
Fixed overhead costs:
The company based its original budget on 6,400 machine-hours The company actually worked 6,710 machine-hours during the month The standard hours allowed for the actual output of the month totaled 6,540 machine-hours What was the overallfixed manufacturing overhead volume variance for the month?
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Trang 1639 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:
40 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:
Original Budget Actual Costs
Fixed overhead costs:
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 overallfixed manufacturing overhead budget variance for the month?
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Trang 1741 Oldham Corporation bases its predetermined overhead rate on variable
manufacturing overhead cost of $4.00 per machine-hour and fixed manufacturing overhead cost of $87,822 per period If the denominator level of activity is 4,100 machine-hours, the fixed component in the predetermined overhead rate would be:
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Trang 1843 Nitrol Corporation manufactures brass vases using a standard cost system with standard machine-hours as the activity base for overhead The following information relates to vase production at Nitrol for last year:
Estimated for
year
Actual results for year
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Trang 1944 Nitrol Corporation manufactures brass vases using a standard cost system with standard machine-hours as the activity base for overhead The following information relates to vase production at Nitrol for last year:
Estimated for
year
Actual results for year
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Trang 2045 Nitrol Corporation manufactures brass vases using a standard cost system with standard machine-hours as the activity base for overhead The following information relates to vase production at Nitrol for last year:
Estimated for
year
Actual results for year
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Trang 2146 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:
Variable overhead costs $140,500 $123,200
Fixed overhead costs $80,000 $77,000
The variable overhead rate variance for March is:
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Trang 2247 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:
Variable overhead costs $140,500 $123,200
Fixed overhead costs $80,000 $77,000
The variable overhead efficiency variance for March is:
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Trang 2348 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:
Variable overhead costs $140,500 $123,200
Fixed overhead costs $80,000 $77,000
The fixed manufacturing overhead budget variance for March is:
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Trang 2449 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:
Variable overhead costs $140,500 $123,200
Fixed overhead costs $80,000 $77,000
The fixed manufacturing overhead volume variance for March is:
The variable overhead rate variance for the period was:
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Trang 2551 Derf Corporation uses a standard cost system in which it applies manufacturing overhead on the basis of standard direct labor-hours Two direct labor-hours are required for each unit produced The denominator activity was set at 9,000 units Manufacturing overhead was budgeted at $135,000 for the period; 20 percent of this cost was fixed The 17,200 hours worked during the period resulted in production of 8,500 units Variable manufacturing overhead cost incurred was $108,500 and fixed manufacturing overhead cost was $28,000.
The variable overhead efficiency variance for the period was:
The fixed manufacturing overhead budget variance for the period was:
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Trang 2653 Derf Corporation uses a standard cost system in which it applies manufacturing overhead on the basis of standard direct labor-hours Two direct labor-hours are required for each unit produced The denominator activity was set at 9,000 units Manufacturing overhead was budgeted at $135,000 for the period; 20 percent of this cost was fixed The 17,200 hours worked during the period resulted in production of 8,500 units Variable manufacturing overhead cost incurred was $108,500 and fixed manufacturing overhead cost was $28,000.
The fixed manufacturing overhead volume variance for the period was:
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Trang 2754 Vette Tie Corporation has developed the following manufacturing overhead standards
to use in applying overhead to the production of its hand-painted silk ties
Manufacturing overhead at Vette is applied to production on the basis of standard direct labor-hours (DLHs)
The above standards were based on an expected annual volume of 60,000 ties The actual results for last year were as follows:
Number of ties produced 58,000
Direct labor-hours worked 64,000
Variable overhead cost $880,000
What was Vette's variable overhead rate variance?
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Trang 2855 Vette Tie Corporation has developed the following manufacturing overhead standards
to use in applying overhead to the production of its hand-painted silk ties
Manufacturing overhead at Vette is applied to production on the basis of standard direct labor-hours (DLHs)
The above standards were based on an expected annual volume of 60,000 ties The actual results for last year were as follows:
Number of ties produced 58,000
Direct labor-hours worked 64,000
Variable overhead cost $880,000
What was Vette's fixed manufacturing overhead budget variance?
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Trang 2956 Vette Tie Corporation has developed the following manufacturing overhead standards
to use in applying overhead to the production of its hand-painted silk ties
Manufacturing overhead at Vette is applied to production on the basis of standard direct labor-hours (DLHs)
The above standards were based on an expected annual volume of 60,000 ties The actual results for last year were as follows:
Number of ties produced 58,000
Direct labor-hours worked 64,000
Variable overhead cost $880,000
What total amount of manufacturing overhead cost (variable and fixed) did Vette apply to the 58,000 ties produced during the year?
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Trang 3057 Pohl Corporation uses a standard cost system in which manufacturing overhead is applied on the basis of standard machine-hours For June, the company's
manufacturing overhead flexible budget showed the following total budgeted costs at
a denominator activity level of 20,000 machine-hours:
At standard, each unit of finished product requires 1.4 hours of machine time
The total predetermined overhead rate per machine-hour for June was:
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Trang 3158 Pohl Corporation uses a standard cost system in which manufacturing overhead is applied on the basis of standard machine-hours For June, the company's
manufacturing overhead flexible budget showed the following total budgeted costs at
a denominator activity level of 20,000 machine-hours:
At standard, each unit of finished product requires 1.4 hours of machine time
The variable overhead rate variance for maintenance cost for June was:
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Trang 3259 Pohl Corporation uses a standard cost system in which manufacturing overhead is applied on the basis of standard machine-hours For June, the company's
manufacturing overhead flexible budget showed the following total budgeted costs at
a denominator activity level of 20,000 machine-hours:
At standard, each unit of finished product requires 1.4 hours of machine time
The variable overhead efficiency variance for utilities cost for June was:
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Trang 3360 Pohl Corporation uses a standard cost system in which manufacturing overhead is applied on the basis of standard machine-hours For June, the company's
manufacturing overhead flexible budget showed the following total budgeted costs at
a denominator activity level of 20,000 machine-hours:
At standard, each unit of finished product requires 1.4 hours of machine time
The fixed manufacturing overhead budget variance (in total) for June was:
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Trang 3461 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:
Denominator level of activity 6,100MH
s Overhead costs at the
denominator activity level:
Variable overhead cost $35,07
5 Fixed overhead cost $77,77
MH s Actual total variable
manufacturing overhead cost
$36,54 0 Actual total fixed manufacturing
overhead cost
$76,87 5
The predetermined overhead rate per MH is closest to:
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Trang 3562 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:
Denominator level of activity 6,100MH
s Overhead costs at the
denominator activity level:
Variable overhead cost $35,07
5 Fixed overhead cost $77,77
MH s Actual total variable
manufacturing overhead cost
$36,54 0 Actual total fixed manufacturing
overhead cost
$76,87 5
The overhead applied to products during the period was closest to:
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Trang 3663 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:
Denominator level of activity 6,100MH
s Overhead costs at the
denominator activity level:
Variable overhead cost $35,07
5 Fixed overhead cost $77,77
MH s Actual total variable
manufacturing overhead cost
$36,54 0 Actual total fixed manufacturing
overhead cost
$76,87 5
The variable overhead rate variance for the period was closest to:
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Trang 3764 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:
Denominator level of activity 6,100MH
s Overhead costs at the
denominator activity level:
Variable overhead cost $35,07
5 Fixed overhead cost $77,77
MH s Actual total variable
manufacturing overhead cost
$36,54 0 Actual total fixed manufacturing
overhead cost
$76,87 5
The variable overhead efficiency variance for the period is closest to:
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Trang 3865 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:
Denominator level of activity 6,100MH
s Overhead costs at the
denominator activity level:
Variable overhead cost $35,07
5 Fixed overhead cost $77,77
MH s Actual total variable
manufacturing overhead cost
$36,54 0 Actual total fixed manufacturing
overhead cost
$76,87 5
The fixed manufacturing overhead budget variance for the period is closest to:
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Trang 3966 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:
Denominator level of activity 6,100MH
s Overhead costs at the
denominator activity level:
Variable overhead cost $35,07
5 Fixed overhead cost $77,77
MH s Actual total variable
manufacturing overhead cost
$36,54 0 Actual total fixed manufacturing
overhead cost
$76,87 5
The fixed manufacturing overhead volume variance for the period is closest to:
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Trang 4067 Cuda Manufacturing Corporation uses a standard cost system with machine-hours (MHs) as the activity base for overhead The following information relates to Cuda's operations last year:
Denominator activity level in machine-hours 50,000 MHs
Standard machine-hours allowed for actual output 55,000 MHs
Actual number of machine-hours incurred 52,000 MHs
Predetermined overhead rate for variable manufacturing
per MH Predetermined overhead rate for fixed manufacturing
per MH Total variable manufacturing overhead incurred $370,00
0 Total fixed manufacturing overhead incurred $615,00
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