Question : 81. A company’s flexible budget for 48,000 units of production showed : 1225662

 

81. A company’s flexible budget for 48,000 units of production showed variable overhead costs of $72,000 and fixed overhead costs of $64,000. The company incurred overhead costs of $122,800 while operating at a volume of 40,000 units. The total controllable cost variance is: 

A. $1,200 favorable.

B. $1,200 unfavorable.

C. $13,200 favorable.

D. $13,200 unfavorable.

E. $15,200 favorable.

82. Adams Co. uses the following standard to produce a single unit of its product: variable overhead (2 hrs. @ $3/hr.) $6. Actual data for the month show variable overhead costs of $150,000, and 24,000 units produced. The total variable overhead variance is: 

A. $6,000F.

B. $6,000U.

C. $78,000U.

D. $78,000F.

E. $0.

83. Montaigne Corp. has the following information about its standards and production activity for November. The volume variance is:

   

A. $1,295U.

B. $1,295F.

C. $2,400U.

D. $2,400F.

E. $3,695U.

84. Montaigne Corp. has the following information about its standards and production activity for November. The controllable variance is:

   

A. $1,295U.

B. $1,295F.

C. $2,400U.

D. $2,400F.

E. $3,695U.

85. Regarding overhead costs, as volume increases: 

A. Unit fixed cost increases, unit variable cost decreases.

B. Unit fixed cost decreases, unit variable cost increases.

C. Unit variable cost decreases, unit fixed cost remains constant.

D. Unit fixed cost decreases, unit variable cost remains constant.

E. Both unit fixed cost and unit variable cost remain constant.

86. Price Company’s flexible budget shows $10,710 of overhead at 75% of capacity, which was the operating level achieved during May. However, the company applied overhead to production during May at a rate of $2.00 per direct labor hour based on a budgeted operating level of 6,120 direct labor hours (90% of capacity). If overhead actually incurred was $11,183 during May, the controllable variance for the month was: 

A. $473 unfavorable.

B. $473 favorable.

C. $1,530 favorable.

D. $1,530 unfavorable.

E. $1,057 favorable.

87. Adams, Inc. uses the following standard to produce a single unit of its product: overhead (2 hrs. @ $3/hr.) $6. The flexible budget for overhead is $100,000 plus $1 per direct labor hour. Actual data for the month show overhead costs of $150,000, and 24,000 units produced. The overhead volume variance is: 

A. $10,000 favorable.

B. $12,000 favorable.

C. $4,000 unfavorable.

D. $16,000 unfavorable.

E. $36,000 unfavorable.

88. Quantity variances for direct cost categories (direct materials and direct labor) are based on differences between the actual inputs used and the standard inputs allowed for the actual output achieved. A key difference in the analysis of quantity variances for direct cost categories and the analysis of the efficiency variance for variable overhead is: 

A. An efficiency variance for variable overhead cannot be calculated.

B. The flexible-budget variance for variable overhead is always equal to the efficiency variance for variable overhead.

C. The efficiency variance for variable overhead is based on the cost effectiveness in using the cost-allocation base.

D. The flexible-budget variance for variable overhead is always equal to the spending variance for variable overhead.

E. There is no key difference between the analysis of quantity variances for direct cost categories and the analysis of the efficiency variance for variable overhead; they should be evaluated in exactly the same manner.

89. The following information relating to a company’s overhead costs is available. Based on this information, the total overhead variance is:

  

Based on this information, the total overhead variance is: 

A. $7,000 favorable.

B. $6,000 favorable.

C. $1,000 unfavorable.

D. $6,000 unfavorable.

E. $1,000 favorable.

90. When recording variances in a standard cost system: 

A. Only unfavorable material variances are debited.

B. Only unfavorable material variances are credited.

C. Both unfavorable material and labor variances are credited.

D. All unfavorable variances are debited.

E. All unfavorable variances are credited.

 

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