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Exam 27: Predetermined Overhead Rates and Overhead Analysis

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Question 41

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Web Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of standard machine-hours. During February, the company used a denominator activity of 80,000 machine-hours in computing its predetermined overhead rate. However, only 75,000 standard machine-hours were allowed for the month's actual production. If the fixed manufacturing overhead volume variance for February was $6,400 unfavorable, then the total budgeted fixed manufacturing overhead cost for the month was:

A) $96,000
B) $102,400
C) $100,000
D) $98,600

E) A) and B)
F) C) and D)

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Question 42

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Wriphoff Company uses a standard cost system to collect costs related to the production of its clay bud vases. Manufacturing overhead at Wriphoff is applied to production on the basis of standard direct labor-hours. The overhead standards used at Wriphoff are as follows: The standards above were based on an expected annual volume of 40,000 bud vases or 36,000 direct labor-hours. The actual results for last year were as follows: -What total amount of manufacturing overhead cost (variable and fixed) did Wriphoff apply to the 35,600 vases produced during last year?

A) $512,640
B) $548,000
C) $564,800
D) $569,600

E) A) and B)
F) None of the above

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Question 43

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An outdoor barbecue grill manufacturer has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period: -What was the fixed manufacturing overhead volume variance for the period to the nearest dollar?

A manufacturer of industrial equipment uses a standard costing system in which standard machine-hours (MHs) is the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period: -How much overhead was applied to products during the period to the nearest dollar?

A manufacturer of playground equipment has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period: -What was the fixed manufacturing overhead volume variance for the period to the nearest dollar?

The fixed portion of the predetermined overhead rate is used for product costing purposes and has no significance in terms of cost control.

Which of the following variances is caused by a difference between the denominator activity in the predetermined overhead rate and the standard hours allowed for the actual production of the period?

One cause of an unfavorable overhead volume variance would be increases in cost for fixed manufacturing overhead items.

A manufacturing company uses a standard costing system in which standard machine-hours (MHs) is the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period: -What was the variable overhead rate variance for the period to the nearest dollar?

A manufacturing company uses a standard costing system in which standard machine-hours (MHs) is the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period: -What was the fixed manufacturing overhead budget variance for the period to the nearest dollar?

Macdowell Corporation's manufacturing overhead includes $2.50 per machine-hour for supplies; $3.50 per machine-hour for indirect labor; $214,200 per period for salaries; and $307,020 per period for depreciation. Required: Determine the predetermined overhead rate if the denominator level of activity is 8,500 machine-hours. Show your work!

If the standard hours allowed for the actual output of the period is greater than the denominator level of activity (in hours), then the overhead budget variance will be unfavorable.

A furniture manufacturer has a standard costing system based on standard direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below: The following data pertain to operations for the most recent period: -What was the fixed manufacturing overhead budget variance for the period to the nearest dollar?

Hart Company's labor standards call for 500 direct labor-hours to produce 250 units of product. During October the company worked 625 direct labor-hours and produced 300 units. The standard hours allowed for October would be:

Felux Corporation has provided the following data for October. Required: a. Compute the budget variance for October. Show your work! b. Compute the volume variance for October. Show your work!

A decrease in denominator level of activity will:

Wriphoff Company uses a standard cost system to collect costs related to the production of its clay bud vases. Manufacturing overhead at Wriphoff is applied to production on the basis of standard direct labor-hours. The overhead standards used at Wriphoff are as follows: The standards above were based on an expected annual volume of 40,000 bud vases or 36,000 direct labor-hours. The actual results for last year were as follows: -What was Wriphoff's variable overhead rate variance for last year?

Wiley Corporation bases its predetermined overhead rate on variable manufacturing overhead cost of $13.90 per machine-hour and fixed manufacturing overhead cost of $944,300 per period. If the denominator level of activity is 7,100 machine-hours, the predetermined overhead rate would be:

Wolle Corporation estimates that its variable manufacturing overhead is $11.60 per machine-hour and its fixed manufacturing overhead is $298,936 per period. -If the denominator level of activity is 4,400 machine-hours, the predetermined overhead rate would be:

Wolle Corporation estimates that its variable manufacturing overhead is $11.60 per machine-hour and its fixed manufacturing overhead is $298,936 per period. -If the denominator level of activity is 4,300 machine-hours, the variable element in the predetermined overhead rate would be: