Question 1

The denominator activity level in direct labor-hours used by Hawkins in setting the predetermined overhead rate for February is:

Accepted Answer

A)  9,300 hours
B)  8,400 hours
C)  9,000 hours
D)  8,700 hoursE) A) and D)
F) A) and C)

Question 2

Rameriz Company erred in selecting a denominator activity and chose a much higher level than was realistic. This error would most likely result in a large:

Accepted Answer

A)  favorable variable overhead efficiency variance.
B)  favorable fixed manufacturing overhead budget variance.
C)  unfavorable overhead volume variance.
D)  unfavorable fixed manufacturing overhead budget variance.E) B) and C)
F) C) and D)

Question 3

Franklin's fixed manufacturing overhead volume variance for the year is:

Accepted Answer

A)  $6,000 unfavorable
B)  $19,000 favorable
C)  $25,000 favorable
D)  $55,000 unfavorableE) A) and D)
F) A) and C)

Question 4

The standard hours allowed for actual production for the year total:

Accepted Answer

A)  247,500
B)  396,000
C)  400,000
D)  495,000E) C) and D)
F) B) and C)

Question 5

If the fixed manufacturing overhead volume variance is unfavorable, too much has been spent on fixed manufacturing overhead items.

Accepted Answer

A) True 
 B)False

Question 6

The fixed manufacturing overhead budget variance is not controllable by managers because fixed costs are not controllable.

Accepted Answer

A) True 
 B)False

Question 7

The fixed manufacturing overhead volume variance will be unfavorable if production volume is less than sales volume.

Accepted Answer

A) True 
 B)False

Question 8

An unfavorable volume variance means that a firm operated at an activity level that was above the activity level planned for the period.

Accepted Answer

A) True 
 B)False

Question 9

The volume variance was:

Accepted Answer

A)  $2,000 favorable
B)  $2,600 unfavorable
C)  $1,000 favorable
D)  $800 favorableE) A) and D)
F) B) and D)

Question 10

If the denominator level of activity is 9,000 machine-hours, the variable element in the predetermined overhead rate would be:

Accepted Answer

A)  $88.80
B)  $82.81
C)  $89.71
D)  $6.90E) All of the above
F) A) and B)

Question 11

What is the predetermined fixed manufacturing overhead rate to the nearest cent?

Accepted Answer

A)  $11.05 per MH
B)  $11.19 per MH
C)  $11.00 per MH
D)  $10.86 per MHE) B) and D)
F) A) and D)

Question 12

What was the fixed manufacturing overhead volume variance for the period to the nearest dollar?

Accepted Answer

A)  $2,486 U
B)  $1,511 U
C)  $975 U
D)  $2,653 UE) B) and D)
F) A) and D)

Question 13

The amount of fixed manufacturing overhead cost contained in the company's budget for February is:

Accepted Answer

A)  $27,000
B)  $27,550
C)  $25,200
D)  $29,350E) A) and C)
F) C) and D)

Question 14

If the denominator level of activity is 9,100 machine-hours, the predetermined overhead rate would be:

Accepted Answer

A)  $88.80
B)  $690.00
C)  $6.90
D)  $81.90E) B) and D)
F) All of the above

Question 15

The variable overhead efficiency variance for October was:

Accepted Answer

A)  $40,000 Favorable
B)  $60,000 Favorable
C)  $160,000 Unfavorable
D)  $210,000 UnfavorableE) None of the above
F) All of the above

Question 16

The total amount of overhead cost applied to Work in Process during November was:

Accepted Answer

A)  $47,520
B)  $66,528
C)  $106,528
D)  $114,048E) All of the above
F) B) and C)

Question 17

The budget variance for June is:

Accepted Answer

A)  $5,740 F
B)  $3,610 F
C)  $3,610 U
D)  $5,740 UE) A) and D)
F) B) and D)

Question 18

Franklin's variable overhead rate variance for the year is:

Accepted Answer

A)  $20,000 unfavorable
B)  $22,000 favorable
C)  $22,000 unfavorable
D)  $20,000 favorableE) C) and D)
F) None of the above

Question 19

Hereford Corporation has provided the following data for February.  Required:
a. Compute the budget variance for February. Show your work!
b. Compute the volume variance for February. Show your work!

Accepted Answer

a. Budget variance = Actual fixed manufa...

Question 20

Jay 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 information below pertains to a recent month's activity:  The volume variance would be:

Accepted Answer

A)  $300 F
B)  $300 U
C)  $150 F
D)  $180 FE) All of the above
F) A) and C)

Exam 18: Standard Costs and Variances

Hereford Corporation has provided the following data for February. Required: a. Compute the budget variance for February. Show your work! b. Compute the volume variance for February. Show your work!

Correct Answerverifieda. Budget variance = Actual fixed manufa...View AnswerShow Answer

Franklin's fixed manufacturing overhead volume variance for the year is:

Correct AnswerverifiedShow Answer

Rameriz Company erred in selecting a denominator activity and chose a much higher level than was realistic. This error would most likely result in a large:

Correct AnswerverifiedShow Answer

The fixed manufacturing overhead volume variance will be unfavorable if production volume is less than sales volume.

Correct AnswerverifiedShow Answer

Jay 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 information below pertains to a recent month's activity: The volume variance would be:

Correct AnswerverifiedShow Answer

Franklin's variable overhead rate variance for the year is:

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The standard hours allowed for actual production for the year total:

Correct AnswerverifiedShow Answer

The variable overhead efficiency variance for October was:

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If the denominator level of activity is 9,000 machine-hours, the variable element in the predetermined overhead rate would be:

Correct AnswerverifiedShow Answer

If the fixed manufacturing overhead volume variance is unfavorable, too much has been spent on fixed manufacturing overhead items.

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The fixed manufacturing overhead budget variance is not controllable by managers because fixed costs are not controllable.

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What was the fixed manufacturing overhead volume variance for the period to the nearest dollar?

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An unfavorable volume variance means that a firm operated at an activity level that was above the activity level planned for the period.

Correct AnswerverifiedShow Answer

The denominator activity level in direct labor-hours used by Hawkins in setting the predetermined overhead rate for February is:

Correct AnswerverifiedShow Answer

The budget variance for June is:

Correct AnswerverifiedShow Answer

The total amount of overhead cost applied to Work in Process during November was:

Correct AnswerverifiedShow Answer

What is the predetermined fixed manufacturing overhead rate to the nearest cent?

Correct AnswerverifiedShow Answer

The volume variance was:

Correct AnswerverifiedShow Answer

If the denominator level of activity is 9,100 machine-hours, the predetermined overhead rate would be:

Correct AnswerverifiedShow Answer

The amount of fixed manufacturing overhead cost contained in the company's budget for February is:

Correct AnswerverifiedShow Answer

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a. Budget variance = Actual fixed manufa...
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