Question : Use the information below to answer the following question(s). Moeller Electric : 1186333

 

Use the information below to answer the following question(s).

 

Moeller Electric manufactures light fixtures. The following information pertains to the company’s manufacturing overhead data.

 

Budgeted output units

30,000 fixtures

Budgeted machine-hours

10,000 hours

Budgeted variable manufacturing

overhead costs for 30,000 fixtures

$80,625

 

 

Actual output units produced

44,000 fixtures

Actual machine-hours used

10,000 hours

Actual variable manufacturing

overhead costs

$121,000

 

15) What is Moeller Electric’s variable manufacturing overhead static-budget variance?

A) $2,750 favourable

B) $2,750 unfavourable

C) $40,375 favourable

D) $40,375 unfavourable

E) $44,000 unfavourable

16) What is Moeller Electric’s variable manufacturing overhead sales-volume variance?

A) $2,750 favourable

B) $37,625 favourable

C) $37,625 unfavourable

D) $40,375 favourable

E) $40,375 unfavourable

 

17) What is the variable manufacturing overhead flexible-budget variance?

A) $387 favourable

B) $2,363 unfavourable

C) $2,363 favourable

D) $2,750 favourable

E) $2,750 unfavourable

 

18) Assume that variable manufacturing overhead is allocated according to machine-hours. Aladdin Company expects to produce 400 cases of Product A using 400 machine-hours. Each machine hour is expected to take 10 KWH of electricity, which costs $6 per KWH. What is the maximum amount the company would be willing to pay for the new machine based solely on rate and efficiency variances if a new energy-efficient machine only used 8 KWH per machine-hour?

A) $120

B) $4,680

C) $4,920

D) $4,800

E) $4,120

19) Cady Machine Shop used 15,000 machine hours during January. It takes 0.90 machine-hours to produce one unit; 15,000 units were produced during the month. Budgeted production included 12,000 units, using 10,800 machine hours. Budgeted variable manufacturing overhead costs per machine-hour is $22.50. What is the variable overhead efficiency variance for Cady?

A) $67,500 unfavourable

B) $67,500 favourable

C) $37,000 favourable

D) $33,750 favourable

E) $33,750 unfavourable

 

20) A favourable variable manufacturing overhead efficiency variance may be interpreted as meaning which of the following?

A) Employees used too much electricity during production.

B) Less maintenance was required than expected.

C) Excess supplies were used.

D) Too much of the cost driver was used.

E) The cost driver is inappropriate.

 

21) If Ferg Company has a $12,000 unfavourable variable-overhead efficiency variance, which of the following statements would be true?

A) Ferg would credit the Cost of Goods Sold account to write-off the variance.

B) Ferg used the variable overhead components more effectively than expected.

C) Ferg made efficient use of the cost driver.

D) Ferg used the variable overhead components and cost driver as expected.

E) Ferg did not use the cost driver efficiently.

22) A company had the following information pertaining to two different cases:

 

 

Case X

Case Y

Budgeted fixed overhead

$130,000

$230,000

Variable factory overhead

per direct-labour hour

$24

$14

Standard direct-labour hours

1,000

6,000

Flexible-budget variance

$10,000 F

$20,000 U

Production-volume variance

$6,000 U

$8,000 F

 

The total overhead variance in Case Y was

A) $4,000 unfavourable.

B) $4,000 favourable.

C) $10,000 unfavourable.

D) $12,000 favourable.

E) $12,000 unfavourable.

 

23) A leased factory building has a fixed monthly rental payment, and a variable overhead cost of energy and indirect labour. Which of the following is TRUE, assuming that all activity levels are within the relevant range?

A) Variable OVH costs will increase as production increases, but Fixed OVH costs will decrease.

B) Variable OVH costs will decrease as production increases, but Fixed OVH costs will increase.

C) Variable OVH costs will increase as production increases, and Fixed OVH costs will increase.

D) Variable OVH costs will increase as production increases, but Fixed OVH costs will remain constant.

E) Both will increase with production, but at different rates.

24) During October 2012 Foxmore Inc. used $250,000 in manufacturing overhead costs, of which $66,500 was variable. Budgeted manufacturing overhead was $229,500, of which $75,000 was variable. Which of the following entries for manufacturing overhead could have been recorded?

A)

Accounts Receivable

75,000

Work in Process Control

75,000

 

B)

Variable Manufacturing Overhead Allocated

75,000

Accounts Payable and other accounts

75,000

 

C)

Work in Process Control

66,500

Accounts Payable and other accounts

66,500

 

D)

Variable Manufacturing Overhead Control

66,500

Accounts Payable and other accounts

66,500

 

E)

Work in Process Control

66,500

Variable Manufacturing Overhead Control

66,500