11) Elite Brands Company uses standard costs for their manufacturing division. Standards specify 0.1 direct labor hours per unit of product. At the beginning of the year, the static budget for variable overhead costs included the following data:
Production volume6,000 units
Estimated variable overhead costs$13,500
Estimated direct labor hours (DLHr)600 hours
At the end of the year, actual data were as follows:
Production volume4,000 units
Actual variable overhead costs$15,000
Actual direct labor hours (DLHr)480 hours
Calculate the variable overhead efficiency variance.
A) $1,800 F
B) $1,800 U
C) $4,200 F
D) $4,200 U
12) Which of the following is a key point to investigate while analyzing overhead costs?
A) whether costs incurred are product costs or period costs
B) whether direct materials prices are higher than standards
C) whether certain overhead costs are controllable or not
D) whether labor costs can be reduced
13) Zenith Fashions uses standard costs for their manufacturing division. From the following data, calculate the fixed overhead cost variance.
|
Actual fixed overhead |
$30,000 |
|
Budgeted fixed overhead |
$25,000 |
|
Standard overhead allocation rate |
$7 |
|
Standard direct labor hours per unit |
2 DLHr |
|
Actual output |
2,000 units |
A) $3,000 F
B) $3,000 U
C) $5,000 F
D) $5,000 U
14) Zenith Fashions uses standard costs for their manufacturing division. From the following data, calculate the fixed overhead allocated to production based on direct labor hours (DLHr).
|
Actual fixed overhead |
$30,000 |
|
Budgeted fixed overhead |
$25,000 |
|
Standard overhead allocation rate |
$7 |
|
Standard direct labor hours per unit |
2 DLHr |
|
Actual output |
2,000 units |
A) $25,000
B) $28,000
C) $30,000
D) $14,000
AICPA Functional: Measurement
15) Zenith Fashions uses standard costs for their manufacturing division. From the following data, calculate the fixed overhead volume variance.
|
Actual fixed overhead |
$30,000 |
|
Budgeted fixed overhead |
$25,000 |
|
Allocated fixed overhead |
$28,000 |
|
Standard overhead allocation rate |
$7 per unit |
|
Standard direct labor hours per unit |
2 DLHr |
|
Actual output |
2,000 units |
A) $14,000 F
B) $3,000 U
C) $3,000 F
D) $14,000 U
16) Zenith Fashions uses standard costs for their manufacturing division. From the following data, calculate the total fixed overhead variance.
|
Actual fixed overhead |
$30,000 |
|
Budgeted fixed overhead |
$25,000 |
|
Allocated fixed overhead |
$28,000 |
|
Standard overhead allocation rate |
$7 per unit |
|
Standard direct labor hours per unit |
2 DLHr |
|
Actual output |
2,000 units |
A) $2,000 U
B) $2,000 F
C) $14,000 U
D) $14,000 F
17) Discount Sales Company uses standard costing to manage their direct costs and overhead costs. Overhead costs are allocated based on direct labor hours. In the first quarter, Discount Sales had a favorable cost variance for their variable overhead costs. Which of the following scenarios would be a reasonable explanation for that variance?
A) The actual number of direct labor hours was lower than the budgeted hours.
B) The actual variable overhead costs were higher than the budgeted costs.
C) The actual variable overhead costs were lower than the budgeted costs.
D) The actual number of direct labor hours was higher than the budgeted hours.
18) Discount Sales Company uses standard costing to manage their direct costs and their overhead costs. Overhead costs are allocated based on direct labor hours. In the first quarter, Discount Sales had a favorable efficiency variance for their variable overhead costs. Which of the following scenarios would be a reasonable explanation for that variance?
A) The actual number of direct labor hours was lower than the budgeted hours.
B) The actual variable overhead costs were higher than the budgeted costs.
C) The actual variable overhead costs were lower than the budgeted costs.
D) The actual number of direct labor hours was higher than the budgeted hours.
19) Quality Brand Products uses standard costing to manage their direct costs and their overhead costs. Overhead costs are allocated based on direct labor hours. In the first quarter, Quality Brand had an unfavorable cost variance for their variable overhead costs. Which of the following scenarios would be a reasonable explanation for that variance?
A) The actual number of direct labor hours was lower than the budgeted hours.
B) The actual variable overhead costs were higher than the budgeted costs.
C) The actual variable overhead costs were lower than the budgeted costs.
D) The actual number of direct labor hours was higher than the budgeted hours.
20) Quality Brand Products uses standard costing to manage their direct costs and their overhead costs. Overhead costs are allocated based on direct labor hours. In the first quarter, Quality Brand had an unfavorable efficiency variance for their variable overhead costs. Which of the following scenarios would be a reasonable explanation for that variance?
A) The actual number of direct labor hours was lower than the budgeted hours.
B) The actual variable overhead costs were higher than the budgeted costs.
C) The actual variable overhead costs were lower than the budgeted costs.
D) The actual number of direct labor hours was higher than the budgeted hours.
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