Question : 31) The production-volume variance A) only pertains to variable overhead costs. B) : 1186345

 

31) The production-volume variance

A) only pertains to variable overhead costs.

B) only pertains to fixed overhead costs.

C) is not applicable in analysis of inventory costs.

D) pertains to both fixed and variable overhead costs.

E) equals the rate variance minus the efficiency variance.

 

 

32) Capacity cost is

A) only an inventoriable cost.

B) only a period cost.

C) never amortized.

D) a variable manufacturing overhead cost.

E) a fixed manufacturing overhead cost.

33) In order to properly record a fixed manufacturing overhead rate variance of $30,000 unfavourable and a production-volume overhead variance of $20,000 favourable, what would the appropriate journal entry be if actual fixed overhead is $500,000?

A)

Fixed Overhead Allocated

500,000

Various Payable Accounts

500,000

 

B)

Work in Process Control

500,000

Fixed Overhead Production-Vol Variance

  20,000

Fixed Overhead Rate Variance

30,000

                                          Fixed Overhead Allocated

490,000

 

C)

Fixed Overhead Allocated

500,000

Fixed Overhead Production-Vol Variance

  20,000

                     Fixed Overhead Rate Variance

30,000

                     Fixed Overhead Control

490,000

 

D)

Fixed Overhead Allocated

490,000

Fixed Overhead Rate Variance

30,000

Fixed Overhead Production-Volume Variance

20,000

             Fixed Overhead Control

500,000

 

E)

Fixed Overhead Rate Variance

30,000

Fixed Overhead Production-Volume Variance

20,000

             Various Payable Accounts

10,000

 

Answer the following question(s) using the information below.

 

Jenny’s Corporation manufactured 25,000 grooming kits for horses during March. The fixed-overhead cost allocation rate is $20.00 per machine-hour. The following fixed overhead data pertain to March:

 

 

Actual

Static Budget

Production

25,000 units

24,000 units

Machine-hours

6,100 hours

6,000 hours

Fixed overhead costs for March

$123,000

$120,000

 

34) What is the flexible-budget amount for fixed-overhead?

A) $120,000

B) $122,000

C) $123,000

D) $125,000

E) $120,983

 

35) What is the amount of fixed overhead allocated to production?

A) $120,000

B) $122,000

C) $123,000

D) $125,000

E) $130,000

 

36) What is the fixed overhead rate variance?

A) $1,000 unfavourable

B) $2,000 favourable

C) $3,000 unfavourable

D) $5,000 favourable

E) $983 unfavourable

37) What is the fixed overhead production-volume variance?

A) $2,000 unfavourable

B) $3,000 favourable

C) $4,000 unfavourable

D) $5,000 favourable

E) $10,000 favourable

 

38) The production-volume variance may also be referred to as the

A) flexible-budget variance.

B) static-budget variance.

C) rate variance.

D) efficiency variance.

E) denominator-level variance.

 

39) A favourable production-volume variance indicates that the company

A) has good management.

B) produced more than it has sold.

C) has a total economic gain from using excess capacity.

D) should increase capacity.

E) has allocated more fixed overhead costs than budgeted.

 

40) When machine-hours are used as a cost allocation base, the item MOST likely to contribute to a favourable production-volume variance is

A) an increase in the selling price of the product.

B) the purchase of a new manufacturing machine costing considerably less than expected.

C) a decline in the cost of energy.

D) strengthened demand for the product.

E) a competitor lowering the price of a similar product.