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Exam 18:Flexible Budgets, Standard Costs, and Variance Analysis

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Question 61

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Garrity Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $6.80 per machine-hour and fixed manufacturing overhead cost of $503,272 per period.If the denominator level of activity is 7,600 machine-hours, the variable element in the predetermined overhead rate would be:

A) $6.80
B) $72.16
C) $66.22
D) $73.02

E) C) and D)
F) All of the above

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Question 62

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The total manufacturing overhead is underapplied or overapplied by how much?

A) $38,462 Underapplied
B) $13,888 Underapplied
C) $38,462 Overapplied
D) $13,888 Overapplied

E) All of the above
F) B) and C)

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Question 63

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The predetermined overhead rate is closest to:

The fixed component of the predetermined overhead rate is closest to:

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 necessarily occur in a month in which actual direct labor-hours differ from standard hours allowed.

The variable overhead efficiency variance is:

The volume variance for February is:

Ferro Enterprises uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of standard direct labor-hours.During the month of September, the company applied $52,000 in fixed manufacturing overhead cost to units of product.At the end of the month, manufacturing overhead was overapplied by $3,000.If there was no volume variance in September, then the budgeted fixed manufacturing overhead cost for the month was:

What is the predetermined overhead rate to the nearest cent?

The fixed overhead volume variance is:

Fabert Incorporated makes a single product--a cooling coil used in commercial refrigerators.The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period.Data concerning the most recent year appear below: Required: a.Determine the variable overhead rate variance for the year. b.Determine the variable overhead efficiency variance for the year. c.Determine the fixed overhead budget variance for the year. d.Determine the fixed overhead volume variance for the year.

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. The amount of fixed manufacturing overhead that Dori would apply to finished production would be:

What was Tantanka's fixed manufacturing overhead volume variance?

If the denominator level of activity is 7,600 machine-hours, the predetermined overhead rate would be:

Billa Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $11.70 per machine-hour and fixed manufacturing overhead cost of $341,596 per period.If the denominator level of activity is 4,700 machine-hours, the predetermined overhead rate would be:

Warrenfeltz Incorporated makes a single product--a cooling coil used in commercial refrigerators.The company has a standard cost system in which it applies overhead to this product based on the standard labor-hours allowed for the actual output of the period.Data concerning the most recent year appear below: Required: a.Compute the variable component of the company's predetermined overhead rate. b.Compute the fixed component of the company's predetermined overhead rate. c.Compute the company's predetermined overhead rate. d.Determine the variable overhead rate variance for the year. e.Determine the variable overhead efficiency variance for the year. f.Determine the fixed overhead budget variance for the year. g.Determine the fixed overhead volume variance for the year.

Potestio Incorporated makes a single product--a critical part used in commercial airline seats.The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period.Data concerning the most recent year appear below: The total of the overhead variances is:

The Marlow Corporation uses a standard cost system and applies manufacturing overhead to products on the basis of standard direct labor-hours.The denominator activity is set at 40,000 direct labor-hours per year.Budgeted fixed manufacturing overhead cost is $40,000 per year, and 0.5 direct labor-hours are required to manufacture one unit.The standard cost card would indicate fixed manufacturing overhead cost per unit to be:

Canel Incorporated makes a single product--an electrical motor used in many long-haul trucks.The company has a standard cost system in which it applies overhead to this product based on the standard machine-hours allowed for the actual output of the period.Data concerning the most recent year appear below: Required: a.Determine the fixed overhead budget variance for the year. b.Determine the fixed overhead volume variance for the year.

Hykes Corporation's manufacturing overhead includes $4.40 per machine-hour for supplies; $4.40 per machine-hour for indirect labor; $55,800 per period for salaries; and $58,590 per period for depreciation. Required: Determine the predetermined overhead rate if the denominator level of activity is 3,100 machine-hours.Show your work!