1. Colina Production Company uses a standard costing system. The following information pertains to the current...
1. Colina Production Company uses a standard costing system. The
following information pertains to the current year. Direct labor
hours is the driver used to assign overhead costs to
products.
| Actual production | 5,500 units |
| Actual factory overhead costs ($16,500 is fixed) | $40,125 |
| Actual direct labor costs (11,250 hours) | $131,625 |
| Standard direct labor for 5,500 units: | |
| Standard hours allowed | 11,000 hours |
| Labor rate | $12.00 |
The factory overhead rate is based on an activity level of 10,000
direct labor hours. Standard cost data for 5,000 units is as
follows:
| Variable factory overhead | $22,500 |
| Fixed factory overhead | 13,500 |
| Total factory overhead | $36,000 |
What is the variable overhead efficiency variance for Colina
Production Company?
a.$562.50 (U)
b.$1,687.50 (F)
c.$562.50 (F)
d.$3,000.00 (U)
2. Harrangue Company's standard variable overhead rate is $6 per
direct labor hour, and each unit requires 2 standard direct labor
hours. During March, Harry recorded 6,000 actual direct labor
hours, $37,000 actual variable overhead costs, and 2,900 units of
product manufactured.
What is the variable overhead efficiency variance for March for
Harrangue?
a.$2,200 (U)
b.$1,200 (U)
c.$600 (U)
d.$2,200 (F)
3. Synergy Manufacturing Company has a normal monthly activity
of 7,500 units.
Standard factory overhead rates are based on a normal monthly
volume of one standard direct hour per unit.
Standard factory overhead rates per direct labor hour
are:
| Fixed | $ 5.00 | ||
| Variable | 12.00 | $17.00 | |
| Units actually produced in current month | 7,000 units | ||
| Actual factory overhead costs incurred (includes $50,000 fixed) | $140,000 |
What is the variable overhead spending variance for Synergy?
a.$6,000 unfavorable
b.$21,000 unfavorable
c.$0
d.$6,000 favorable
4. Malkovich Company uses a standard costing system. The
following information pertains to direct materials for the month of
July:
| Standard price per lb. | $18.00 |
| Actual purchase price per lb. | $16.50 |
| Quantity purchased | 3,100 lbs. |
| Quantity used | 2,950 lbs. |
| Standard quantity allowed for actual output | 3,000 lbs. |
| Actual output | 1,000 units |
Malkovich Company reports its material price variances at the time
of purchase.
What is the material usage variance for Malkovich Company?
a.$900 (F)
b.$1,950 (F)
c.$900 (U)
d.$2,850 (F)
5.
Biscuit Company has developed the following standards for one of
its products. Direct labor hours is the driver used to assign
overhead costs to products.
| Direct materials: | 10 pounds × $3 per pound |
| Direct labor: | 2.5 hours × $8 per hour |
| Variable manufacturing overhead: | 2.5 hours × $2 per hour |
| The following activity occurred during the month of June: | |
| Materials purchased: | 125,000 pounds at $2.60 per pound |
| Materials used: | 110,000 pounds |
| Units produced: | 10,000 units |
| Direct labor: | 24,000 hours at $7.50 per hour |
| Actual variable manufacturing overhead: | $51,000 |
The company records materials price variances at the time of
purchase.
The direct labor efficiency variance is
a.$20,000 favorable.
b.$20,000 unfavorable.
c.$8,000 unfavorable.
d.$8,000 favorable.
Homework Answers
OPTION: $562.50 U
EXPLANATION:
Variable overhead efficiency variance = standard rate x (standard hours - actual hours)
= ($22500/10000) x (11000 - 11250)
= $2.25 x $250
= $562.50 U
Add Answer to:
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