Question

The Thanksgiving Costume Factory used budgeted activity as its denominator level for 2018. The company measures its direct materials usage in pounds. The production cost variances for 2018 are as follows: $8,000 F $9,000 F $4,000U $6,000F Variable Overrhead Rate Variance: Variable Overhead Efficiency Variance: Fixed Overhead Budget Variance: Fixed Overhead Volume Variance Direct Material Price Variance: Direct Material Quantity Variance: $ 7,000 F Direct Labor Rate Variance: Direct Labor Efficiency Variance $13,000 U $12,000 U $ 4,000 F For the next eight questions, please use the following answer key: If the Statement is True - You should answer A If the Statement is False - You should answer B If it cannot be determined from the information given whether the statement is true or false-You should answer C Thanksgiving Costume paid more than the standard rate per hour for direct labor. The company used less than the standard direct materials allowed to produce the actual 18. 19. costumes. Actual production was more than budgeted production. 20. Thanksgiving Costume paid more than the standard price for direct materials purchased. 21. Thanksgiving Costume may have used direct labor hours to apply overhead to the actual costumes produced. 22. Thanksgiving Costume used less than the standard hours allowed for direct labor to 23. produce the actual units. The actual fixed overhead for 2018 was greater than the budgeted fixed overhead for 24. 2018. The company used more pounds of direct material than it purchased. Refer back to the production variance report for Thanksgiving Costume. Compute the underapplied or overapplied overhead for the company. $27,000 underapplied $27,000 overapplied $19,000 underapplied 25 26. a. b. с. $19,000 overapplied d. $6,000 overapplied e.

Answer 1

18.
Answer is B
Since Direct Labor rate variance is favorable which implies Actual rate is lower than standard rate.

19.
Answer is A
Since Direct Material Quantity Variance is favorable

20.
Answer is A
Since Fixed Overhead Volume Variance is favorable

21.
Answer is A
Since Direct material Quantity price variance

22.
Answer is C.
It cannot be determined from variances given

23.
Answer is B.
Since Direct material efficiency variance is unfavorable

24.
Answer is A
Since Fixed Overhead Budget Variance is unfavorable

25.
Answer is B.
Since Direct Material Quantity Variance is favorable

26.
Cannot be determined with available data