ACCT 202 CH 11 P2

54. Atlanta Enterprises incurred $828,000 of fixed overhead during the period. During that same period, the company applied $845,000 of fixed overhead to production and reported an unfavorable budget variance of $41,000. How much was Atlanta's budgeted fixed overhead? A. $787,000. B. $804,000. C. $869,000. D. $886,000. E. Not enough information to judge.

A $787,000

35. Delson Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended: Actual units produced: 10,000 Actual variable overhead incurred: $62,000 Actual machine hours worked: 16,000 Standard variable overhead cost per machine hour: $4 If Delson estimates 1.7 hours to manufacture a completed unit, the company's variable-overhead spending variance is: A. $2,000 favorable. B. $2,000 unfavorable. C. $6,000 favorable. D. $6,000 unfavorable. E. some other amount not listed above.

A. $2,000 favorable

Sussex Company uses a standard cost system and prepared the following budget for May when 24,000 machine hours of activity were anticipated: variable overhead, $48,000; fixed overhead: $240,000. Actual data for May were: Standard machine hours allowed for output attained: 25,000 Actual machine hours worked: 24,000 Variable overhead incurred: $50,000 Fixed overhead incurred: $250,000 44. The standard variable overhead rate for May is: A. $2.00. B. $2.08. C. $3.00. D. $5.00. E. $5.21.

A. $2.00

Abbott has a standard variable overhead rate of $4.50 per machine hour, and each unit produced has a standard time allowed of three hours. The company's static budget was based on 46,000 units. Actual results for the year follow. Actual units produced: 42,000 Actual machine hours worked: 120,000 Actual variable overhead incurred: $520,000 37. Abbott's variable-overhead spending variance is: A. $20,000 favorable. B. $20,000 unfavorable. C. $27,000 favorable. D. $27,000 unfavorable. E. not listed above.

A. $20,000 favorable

Duncanville, Inc., has the following overhead standards: Variable overhead: 4 hours at $8 per hour Fixed overhead: 4 hours at $10 per hour The standards were based on a planned activity of 20,000 machine hours when 5,000 units were scheduled for production. Actual data follow. Variable overhead incurred: $167,750 Fixed overhead incurred: $210,000 Machine hours worked: 19,800 Actual units produced: 5,100 48. Duncanville's fixed-overhead volume variance is: A. $4,000 favorable. B. $4,000 unfavorable. C. $10,000 favorable. D. $10,000 unfavorable. E. not listed above.

A. $4,000 favorable

SanBox Company is choosing new cost drivers for its accounting system. One driver is labor hours; the other is a combination of machine hours for unit variable costs and number of setups for a pool of batch-level costs. Data for the past year follow. Budget Actual Labor hours 200,000 200,000 Machine hours 360,000 450,000 Number of setups 3,000 3,300 Unit variable cost pool $1,600,000 $2,000,000 Batch-level cost pool $900,000 $990,000 55. Assume that both cost pools are combined into a single pool, and labor hours is the driver. The total flexible budget for the actual level of labor hours and the total variance for the combined pool are: Flexible Budget Variance A. $1,600,000 $400,000U B. $2,500,000 $490,000U C. $2,590,000 $400,000U D. $2,900,000 $90,000U E. $2,990,000 $0

B $2,500,000 $490,000U

40. Herman Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended: Actual units produced: 13,000 Actual fixed overhead incurred: $742,000 Standard fixed overhead rate: $15 per hour Budgeted fixed overhead: $720,000 Planned level of machine-hour activity: 48,000 If Herman estimates four hours to manufacture a completed unit, the company's fixed-overhead budget variance would be: A. $22,000 favorable. B. $22,000 unfavorable. C. $60,000 favorable. D. $60,000 unfavorable. E. some other amount.

B $22,000 unfavorable

41. Enberg Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended: Actual units produced: 14,800 Actual fixed overhead incurred: $791,000 Standard fixed overhead rate: $13 per hour Budgeted fixed overhead: $780,000 Planned level of machine-hour activity: 60,000 If Enberg estimates four hours to manufacture a completed unit, the company's fixed-overhead volume variance would be: A. $10,400 favorable. B. $10,400 unfavorable. C. $11,000 favorable. D. $11,000 unfavorable. E. some other amount.

B. $10,400 unfavorable

39. Arling Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended: Actual units produced: 12,000 Actual fixed overhead incurred: $730,000 Actual machine hours worked: 60,000 Budgeted fixed overhead: $720,000 Planned level of machine-hour activity: 50,000 If Arling estimates four hours to manufacture a completed unit, the company's standard fixed overhead rate per machine hour would be: A. $12.00. B. $14.40. C. $14.60. D. $15.00. E. some other amount.

B. $14.40

52. Luke, Inc., has a standard variable overhead rate of $5 per machine hour, with each completed unit expected to take three machine hours to produce. A review of the company's accounting records found the following: Actual production: 19,500 units Variable-overhead efficiency variance: $9,000U Variable-overhead spending variance: $21,000F What was Luke's actual variable overhead during the period? A. $262,500. B. $280,500. C. $304,500. D. $322,500. E. Some other amount.

B. $280,500

32. A fixed-overhead volume variance would normally arise when: A. actual hours of activity coincide with actual units of production. B. budgeted fixed overhead is overapplied to production. C. there is a fixed-overhead budget variance. D. actual fixed overhead exceeds budgeted fixed overhead. E. there is a variable-overhead efficiency variance.

B. budgeted fixed overhead is overapplied to production

Duncanville, Inc., has the following overhead standards: Variable overhead: 4 hours at $8 per hour Fixed overhead: 4 hours at $10 per hour The standards were based on a planned activity of 20,000 machine hours when 5,000 units were scheduled for production. Actual data follow. Variable overhead incurred: $167,750 Fixed overhead incurred: $210,000 Machine hours worked: 19,800 Actual units produced: 5,100 47. Duncanville's fixed-overhead budget variance is: A. $6,000 unfavorable. B. $7,000 unfavorable. C. $10,000 unfavorable. D. $12,000 unfavorable. E. not listed above.

C. $10,000 unfavorable

34. Rowe Corporation reported the following variances for the period just ended: Variable-overhead spending variance: $50,000U Variable-overhead efficiency variance: $28,000U Fixed-overhead budget variance: $70,000U Fixed-overhead volume variance: $30,000U If Rowe desires to analyze variances that arose primarily from managers' expenditures in excess of anticipated amounts, the company should focus on variances that total: A. $50,000U. B. $70,000U. C. $120,000U. D. $178,000U. E. some other amount.

C. $120,000U

Benson Company, which uses a standard cost system, budgeted $600,000 of fixed overhead when 40,000 machine hours were anticipated. Other data for the period were: Actual units produced: 10,000 Standard production time per unit: 3.9 machine hours Fixed overhead incurred: $620,000 Actual machine hours worked: 42,000 43. Benson's fixed-overhead volume variance is: A. $10,000 favorable. B. $15,000 favorable. C. $15,000 unfavorable. D. $20,000 favorable. E. $20,000 unfavorable.

C. $15,000 unfavorable

Duncanville, Inc., has the following overhead standards: Variable overhead: 4 hours at $8 per hour Fixed overhead: 4 hours at $10 per hour The standards were based on a planned activity of 20,000 machine hours when 5,000 units were scheduled for production. Actual data follow. Variable overhead incurred: $167,750 Fixed overhead incurred: $210,000 Machine hours worked: 19,800 Actual units produced: 5,100 51. The amount of variable overhead that Duncanville applied to production is: A. $158,400. B. $160,000. C. $163,200. D. $167,750. E. not listed above.

C. $163,200

Abbott has a standard variable overhead rate of $4.50 per machine hour, and each unit produced has a standard time allowed of three hours. The company's static budget was based on 46,000 units. Actual results for the year follow. Actual units produced: 42,000 Actual machine hours worked: 120,000 Actual variable overhead incurred: $520,000 38. Abbott's variable-overhead efficiency variance is: A. $20,000 favorable. B. $20,000 unfavorable. C. $27,000 favorable. D. $27,000 unfavorable. E. not listed above.

C. $27,000 favorable

Duncanville, Inc., has the following overhead standards: Variable overhead: 4 hours at $8 per hour Fixed overhead: 4 hours at $10 per hour The standards were based on a planned activity of 20,000 machine hours when 5,000 units were scheduled for production. Actual data follow. Variable overhead incurred: $167,750 Fixed overhead incurred: $210,000 Machine hours worked: 19,800 Actual units produced: 5,100 50. Duncanville's variable-overhead efficiency variance is: A. $550 favorable. B. $550 unfavorable. C. $4,800 favorable. D. $4,800 unfavorable. E. not listed above.

C. $4,800 favorable

36. Martin Company, which applies overhead to production on the basis of machine hours, reported the following data for the period just ended: Actual units produced: 9,000 Actual variable overhead incurred: $54,400 Actual machine hours worked: 16,000 Standard variable overhead cost per machine hour: $3.50 If Martin estimates two hours to manufacture a completed unit, the company's variable-overhead efficiency variance is: A. $1,600 favorable. B. $1,600 unfavorable. C. $7,000 favorable. D. $7,000 unfavorable. E. some other amount not listed above.

C. $7,000 favorable

Master Products has the following information for the year just ended: Budget Actual Sales in units 15,000 14,000 Sales $150,000 $147,000 Less: Variable expenses 90,000 82,600 Contribution margin $ 60,000 $ 64,400 Less: Fixed expenses 35,000 40,000 Operating income $ 25,000 $ 24,400 62. The company's sales-price variance is: A. $3,000 unfavorable. B. $7,000 unfavorable. C. $7,000 favorable. D. $7,500 unfavorable. E. $7,500 favorable.

C. $7,000 favorable

60. The sales-volume variance equals: A. (actual sales volume - budgeted sales volume) x actual sales price. B. (actual sales volume - budgeted sales volume) x actual contribution margin. C. (actual sales volume - budgeted sales volume) x budgeted sales price. D. (actual sales price - budgeted sales price) x budgeted sales volume. E. (actual sales price - budgeted sales price) x fixed-overhead volume variance.

C. (actual sales volume - budgeted sales volume) x budgeted sales price

53. Bushnell, Inc., has a standard variable overhead rate of $4 per machine hour, with each completed unit expected to take three machine hours to produce. A review of the company's accounting records found the following: Actual variable overhead: $210,000 Variable-overhead efficiency variance: $18,000U Variable-overhead spending variance: $30,000F How many units did Bushnell actually produce during the period? A. 13,500. B. 16,500. C. 18,500. D. 21,500. E. Some other amount.

C. 18,500

58. In an effort to reduce record-keeping procedure, companies that sell perishable goods will often enter the standard cost of direct material, direct labor, and manufacturing overhead directly into what account? A. Work-in-Process Inventory. B. Finished-Goods Inventory. C. Cost of Goods Sold. D. Cost of Goods Manufactured. E. Sales Revenue.

C. Cost of Goods Sold

57. What is the most common treatment of the fixed-overhead budget variance at the end of the accounting period? A. Reported as a deferred charge or credit. B. Allocated among Work-in-Process Inventory, Finished-Goods Inventory, and Cost of Goods Sold. C. Charged or credited to Cost of Goods Sold. D. Allocated among Cost of Goods Manufactured, Finished-Goods Inventory, and Cost of Goods Sold. E. Charged or credited to Income Summary.

C. charged or credited to Cost of Goods Sold

Master Products has the following information for the year just ended: Budget Actual Sales in units 15,000 14,000 Sales $150,000 $147,000 Less: Variable expenses 90,000 82,600 Contribution margin $ 60,000 $ 64,400 Less: Fixed expenses 35,000 40,000 Operating income $ 25,000 $ 24,400 61. The company's sales-volume variance is: A. $3,000 unfavorable. B. $4,000 unfavorable. C. $4,400 favorable. D. $10,000 unfavorable. E. $10,000 favorable.

D. $10,000 unfavorable

SanBox Company is choosing new cost drivers for its accounting system. One driver is labor hours; the other is a combination of machine hours for unit variable costs and number of setups for a pool of batch-level costs. Data for the past year follow. Budget Actual Labor hours 200,000 200,000 Machine hours 360,000 450,000 Number of setups 3,000 3,300 Unit variable cost pool $1,600,000 $2,000,000 Batch-level cost pool $900,000 $990,000 56. Assume that the two separate pools are used. The flexible budget amounts for the actual level of machine hours and actual number of setups are: Unit Variable Cost Pool Batch-Level Cost Pool A. $1,600,000 $900,000 B. $1,600,000 $990,000 C. $2,000,000 $900,000 D. $2,000,000 $990,000 E. $2,500,000 $0

D. $2,000,000 $990,000

Duncanville, Inc., has the following overhead standards: Variable overhead: 4 hours at $8 per hour Fixed overhead: 4 hours at $10 per hour The standards were based on a planned activity of 20,000 machine hours when 5,000 units were scheduled for production. Actual data follow. Variable overhead incurred: $167,750 Fixed overhead incurred: $210,000 Machine hours worked: 19,800 Actual units produced: 5,100 49. Duncanville's variable-overhead spending variance is: A. $550 favorable. B. $4,550 unfavorable. C. $4,800 favorable. D. $9,350 unfavorable. E. not listed above.

D. $9,350 unfavorable

33. Which variance is commonly associated with measuring the cost of under- or over-utilization of plant capacity? A. The variable-overhead spending variance. B. The variable-overhead efficiency variance. C. The fixed-overhead budget variance. D. The fixed-overhead volume variance. E. The total fixed-overhead variance.

D. the fixed-overhead volume variance

59. When actual variable cost per unit equals standard variable cost per unit, the difference between actual and budgeted contribution margin is explained by a combination of which two variances? A. The sales-volume variance and the fixed-overhead volume variance. B. The sales-volume variance and the fixed-overhead budget variance. C. The sales-price variance and the fixed-overhead volume variance. D. The sales-price variance and sales-volume variance. E. The sales-price variance and fixed-overhead budget variance.

D. the sales-price variance and sales-volume variance

Sussex Company uses a standard cost system and prepared the following budget for May when 24,000 machine hours of activity were anticipated: variable overhead, $48,000; fixed overhead: $240,000. Actual data for May were: Standard machine hours allowed for output attained: 25,000 Actual machine hours worked: 24,000 Variable overhead incurred: $50,000 Fixed overhead incurred: $250,000 46. The fixed-overhead budget and volume variances are: Fixed-Overhead Budget Variance Fixed-Overhead Volume Variance A. $0 $10,000 favorable B. $10,000 favorable $0 C. $10,000 favorable $10,000 unfavorable D. $10,000 unfavorable $0 E. $10,000 unfavorable $10,000 favorable

E. $10,000 unfavorable $10,000 favorable

Sussex Company uses a standard cost system and prepared the following budget for May when 24,000 machine hours of activity were anticipated: variable overhead, $48,000; fixed overhead: $240,000. Actual data for May were: Standard machine hours allowed for output attained: 25,000 Actual machine hours worked: 24,000 Variable overhead incurred: $50,000 Fixed overhead incurred: $250,000 45. The variable-overhead spending and efficiency variances are: Variable-Overhead Spending Variance Variable-Overhead Efficiency Variance A. $0 $0 B. $0 $2,000 unfavorable C. $2,000 unfavorable $0 D. $2,000 favorable $2,000 unfavorable E. $2,000 unfavorable $2,000 favorable

E. $2,000 unfavorable $2,000 favorable

Benson Company, which uses a standard cost system, budgeted $600,000 of fixed overhead when 40,000 machine hours were anticipated. Other data for the period were: Actual units produced: 10,000 Standard production time per unit: 3.9 machine hours Fixed overhead incurred: $620,000 Actual machine hours worked: 42,000 42. Benson's fixed-overhead budget variance is: A. $10,000 favorable. B. $15,000 favorable. C. $15,000 unfavorable. D. $20,000 favorable. E. $20,000 unfavorable.

E. $20,000 unfavorable