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Exam 4: Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

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Question 21

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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 rate variance for the period was:

A) $5,300 Unfavorable
B) $1,200 Unfavorable
C) $6,300 Unfavorable
D) $6,500 Unfavorable

E) B) and C)
F) B) and D)

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Question 22

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The Murray Corporation uses a standard cost system in which it applies manufacturing overhead on the basis of standard direct labor-hours (DLHs) . The company recorded the following activity and cost data for May: -The amount of fixed manufacturing overhead cost applied during May was:

A) $52,535
B) $54,135
C) $36,090
D) $50,400

E) B) and C)
F) A) and D)

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Question 23

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In a standard cost system, overhead is applied to production on the basis of:

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.

Cajun Corporation manufactures a labor-intensive product. The cost standards developed by Cajun appear below. Manufacturing overhead at Cajun is applied to production on the basis of standard direct labor-hours: The standards above were based on an expected annual volume of 8,000 units. The actual results for last year were as follows: Required: Compute the following variances for Cajun. a. Materials price variance. b. Materials quantity variance. c. Labor rate variance. d. Variable overhead rate variance. e. Variable overhead efficiency variance. f. Fixed overhead budget variance.

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: The standard machine-hours per vase is 1.25. Last year Nitrol produced 84,000 vases. -What was Nitrol's total underapplied or overapplied overhead cost for last year?

If all four of Argo Corporation's overhead variances are favorable, Argo's overhead will be underapplied.

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: The following data pertain to operations for the most recent period: -The predetermined overhead rate per MH is closest to:

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: -What was Cuda's fixed manufacturing overhead budget variance?

The Murray Corporation uses a standard cost system in which it applies manufacturing overhead on the basis of standard direct labor-hours (DLHs) . The company recorded the following activity and cost data for May: -The fixed manufacturing overhead budget variance for May was:

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

Bruley Corporation applies manufacturing overhead to products on the basis of standard machine-hours. The company's predetermined overhead rate for fixed manufacturing overhead is $3.30 per machine-hour and the denominator level of activity is 3,500 machine-hours. In the most recent month, the total actual fixed manufacturing overhead was $11,570 and the company actually worked 3,430 machine-hours during the month. The standard hours allowed for the actual output of the month totaled 3,450 machine-hours. What was the overall fixed manufacturing overhead volume variance for the month?

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 manufacturing overhead volume variance.

A manufacturer of playground 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: The following data pertain to operations for the most recent period: -The fixed manufacturing overhead budget variance for the period is closest to:

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

The Murray Corporation uses a standard cost system in which it applies manufacturing overhead on the basis of standard direct labor-hours (DLHs) . The company recorded the following activity and cost data for May: -The amount of fixed manufacturing overhead cost that was used to compute the fixed component of the predetermined overhead rate was:

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: During June, 17,000 machine-hours were used to complete 13,000 units of product, and the following actual total overhead costs were incurred: 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:

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: -What total amount of manufacturing overhead cost (variable and fixed) did Cuda apply to production?

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: -What total amount of manufacturing overhead cost (variable and fixed) did Vette apply to the 58,000 ties produced during the year?

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: The standard machine-hours per vase is 1.25. Last year Nitrol produced 84,000 vases. -What was Nitrol's variable overhead rate variance for last year?