Question

answere 7 to 11

7) During June, Bradley Company produced 4,000 units of product. The standard cost card indicates the following labour standards per unit of output: 3.5 hours @ $6 per hour $21. During the month, the company worked 15.000 hours. The standard hours allowed for the month were a) 14,000 hours. b) 15,000 hours. c) 24,000 hours. d) 18,000 hours. 8) Refer to the data in question 17) above. What is the labour efficiency variance for June? a) $1,000 F. b) $1,000 U. c) $6,000 F d) $6,000 U 9) During August, Bradley Company produced 3,500 units of product using 12,750 labour hours. The standard cost card indicates the following variable manufacturing overhead standards per unit of output: 3.5 labour hours @ $2 per labour hour = $7. During the month, the actual variable manufacturing overhead cost incurred was $25,000. The variable overhead spending variance was a) $500 U. b) $500 F. c) $24,500 U. d) $24,500 F. 10) Refer to the data in question 19) above. The variable overhead efficiency variance was a) $7,000 F. b) $7,000 U. c) $1,000 F. d) $1,000 U. 11) The predetermined overhead rate (variable and fixed) is $7.50 per machine hour, and the denominator level of activity is 135,000 machine hours. If the variable portion of the predetermined overhead rate is $3.00 per machine hour, what is the budgeted fixed factory overhead for the year? a) $30,000 b) $607,500 c) $405,000 d) $1,012,500

Answer 1

7. Standard hours allowed = 4,000*3.5 = 14,000 Option A

8. Labor efficiency variance = (SH-AH) * SR = (14000-15000)*6 = 6000 U Option D

9. Variable overhead spending variance = Standard - Actual = (3500*7) - 25000 = 500 U Option A

10. Variable overhead efficiency variance = (SH-AH) * SR = (3500*3.5 - 12750)*2 = 1000 U Option D