Question : 41. Bellow Ltd. uses direct labor hours as the cost driver : 1291606

41. Bellow Ltd. uses direct labor hours as the cost driver for variable overhead. Which of the following items does not need to be known, in order to calculate the variable overhead efficiency variance? 
A. Actual overhead costs
B. Actual direct labor hours
C. Standard variable overhead rate per direct labor hour
D. Standard direct labor hours allowed

42. Sampson Apparel Inc.
Sampson Apparel Inc. incurred actual variable overhead expenses of $20,000 in the current year for the production of 5,000 units. Variable overhead was applied at a rate of $1.50 per direct labor hour and 2 direct labor hours were budgeted for each unit. The company used 9,000 direct labor hours for production.

Refer to the Sampson Apparel Inc. information above. What was Sampson’s variable overhead spending variance? 
A. $6,500 U
B. $6,500 F
C. $1,500 U
D. $1,500 F

43. Sampson Apparel Inc.
Sampson Apparel Inc. incurred actual variable overhead expenses of $20,000 in the current year for the production of 5,000 units. Variable overhead was applied at a rate of $1.50 per direct labor hour and 2 direct labor hours were budgeted for each unit. The company used 9,000 direct labor hours for production.

Refer to the Sampson Apparel Inc. information above. What was Sampson’s variable overhead efficiency variance? 
A. $6,500 U
B. $6,500 F
C. $1,500 U
D. $1,500 F

44. Latimer Textiles Inc.
Latimer Textiles Inc. incurred actual variable overhead expenses of $27,000 in the current year for the production of 8,000 units. Variable overhead was applied at a rate of $1.75 per direct labor hour and 2 direct labor hours were budgeted for each unit. The company used 17,400 direct labor hours for production.

Refer to the Latimer Textiles Inc. information above. What was Latimer’s variable overhead spending variance? 
A. $3,450 U
B. $3,450 F
C. $2,450 U
D. $2,450 F

45. Latimer Textiles Inc.
Latimer Textiles Inc. incurred actual variable overhead expenses of $27,000 in the current year for the production of 8,000 units. Variable overhead was applied at a rate of $1.75 per direct labor hour and 2 direct labor hours were budgeted for each unit. The company used 17,400 direct labor hours for production.

Refer to the Latimer Textiles Inc. information above. What was Latimer’s variable overhead efficiency variance? 
A. $3,450 U
B. $3,450 F
C. $2,450 U
D. $2,450 F

46. Atkinson Landscaping
Atkinson Landscaping applies variable overhead based on direct labor hours. At the beginning of the current year, Atkinson had estimated the following:
 

Estimated variable overhead

$56,000

Estimated units of production

10,000 units

Standard direct labor hours per unit

2.5 hours

During the year, 11,000 units were produced using a total of 27,200 direct labor hours and actual overhead costs were $60,000.

Refer to the Atkinson Landscaping information above. Atkinson’s variable overhead spending variance for the year is: 
A. $   672 F.
B. $   928 F.
C. $4,000 U.
D. $   145 U.

47. Atkinson Landscaping
Atkinson Landscaping applies variable overhead based on direct labor hours. At the beginning of the current year, Atkinson had estimated the following:
 

Estimated variable overhead

$56,000

Estimated units of production

10,000 units

Standard direct labor hours per unit

2.5 hours

During the year, 11,000 units were produced using a total of 27,200 direct labor hours and actual overhead costs were $60,000.

Refer to the Atkinson Landscaping information above. Atkinson’s variable overhead efficiency variance for the year is: 
A. $   672 F.
B. $   928 F.
C. $4,000 U.
D. $   145 U.

48. The variable overhead efficiency variance: 
A. is interpreted in the same manner as the direct labor efficiency variance.
B. measures the efficient use of factory utilities, factory maintenance, and factory supplies.
C. measures the efficient use of the cost driver used in the flexible budget.
D. measures the efficient use of direct materials.

49. Which of the following types of companies would not have a need to calculate a fixed overhead volume variance? 
A. A company that uses variable costing.
B. A company that uses absorption costing.
C. A company that applies fixed overhead based on direct labor hours.
D. A company that uses activity-based costing (ABC).

50. Washington Inc. has an unfavorable fixed overhead spending variance. Which of the following would be the most likely reason for this variance? 
A. More units were actually produced than predicted.
B. Fewer units were actually produced than predicted.
C. Actual fixed overhead was more than predicted.
D. Actual fixed overhead was less than predicted.