Question : 51. New Hampshire Products has a favorable fixed overhead spending variance. : 1291607

51. New Hampshire Products has a favorable 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.

52. Armstrong ProductsArmstrong Products applies fixed overhead at a rate of $3 per direct labor hour. Each unit produced is expected to take 2 direct labor hours. Armstrong expected production in the current year to be 10,000 units but 9,000 units were actually produced. Actual direct labor hours were 19,000 and actual fixed overhead costs were $62,000. Refer to the Armstrong Products information above. Armstrong’s fixed overhead spending variance is: A. $8,000 F.B. $8,000 U.C. $2,000 F.D. $2,000 U.

53. Armstrong ProductsArmstrong Products applies fixed overhead at a rate of $3 per direct labor hour. Each unit produced is expected to take 2 direct labor hours. Armstrong expected production in the current year to be 10,000 units but 9,000 units were actually produced. Actual direct labor hours were 19,000 and actual fixed overhead costs were $62,000. Refer to the Armstrong Products information above. Armstrong’s fixed overhead volume variance is: A. $2,000.B. $6,000.C. $8,000.D. $       0.

54. Hayward Inc.Hayward Inc. produces a unique item. Hayward’s management team wishes to perform a variance analysis on its fixed overhead. Fixed overhead is applied to units produced using direct labor hours as its cost driver. The company’s managerial accountant has compiled the following information: 

Projected data:

Estimated direct labor hours

50,000 hours

Estimated fixed overhead

$75,000

Actual data:

Actual production

104,000 units

Actual direct labor hours used

52,000 hours

Actual fixed overhead

$80,000

Refer to the Hayward Inc. information above. Hayward’s fixed overhead spending variance is: A. $2,000 F.B. $2,000 U.C. $5,000 F.D. $5,000 U.

55. Hayward Inc.Hayward Inc. produces a unique item. Hayward’s management team wishes to perform a variance analysis on its fixed overhead. Fixed overhead is applied to units produced using direct labor hours as its cost driver. The company’s managerial accountant has compiled the following information: 

Projected data:

Estimated direct labor hours

50,000 hours

Estimated fixed overhead

$75,000

Actual data:

Actual production

104,000 units

Actual direct labor hours used

52,000 hours

Actual fixed overhead

$80,000

Refer to the Hayward Inc. information above. Hayward’s fixed overhead volume variance is: A. $5,000.B. $2,000.C. $3,000.D. $2,500.

56. The fixed overhead volume variance is calculated by taking the difference between: A. actual fixed overhead and budgeted fixed overhead.B. budgeted fixed overhead and budgeted variable overhead.C. budgeted fixed overhead and applied fixed overhead.D. actual fixed overhead and applied fixed overhead.

57. Which of the following variances is generally not reported as being favorable or unfavorable? A. Variable overhead efficiency varianceB. Direct labor rate varianceC. Fixed overhead volume varianceD. Direct materials usage variance

58. When managers apply the process of “management by exception”: A. they take action when there is a significant variance between planned and actual results.B. they take action when there is a variance of any size or amount between planned and actual results.C. they are allowed to use standard costs rather than actual costs on financial statements issued to decision makers.D. they are not required to compute the standard cost of making a product.

59. Managers who properly apply the concept of “management by exception” will: A. investigate only unfavorable variances.B. investigate only favorable variances.C. always investigate unfavorable and favorable variances regardless of size.D. investigate only variances of a certain size or scope.

60. Which of the following statements is false regarding variance analysis in the modern manufacturing environment? A. It is often not timely enough to be useful to managers.B. It is often too detailed to be of much use to managers.C. Not all variances are required to be investigated.D. It can influence employee behavior.