Question

In a period, the labor efficiency variance was $54,000 F. The standard direct labor wage rate is $12.00 per hour and 30 direct labor hours are allowed for each unit of output. Given that 43,500 direct labor hours were worked, how many units of output were actually produced? 150 c. 1,450 d. 1,600 The overhead variance that is a measure of capacity utilization is: a. The overhead spending variance The overhead efficiency variance c. The overhead budget variance d. The overhead volume variance The Roller Blade Product has been considered a drag on profits at Sporting Goods International for some time and management is considering discontinuing the product altogether. Data from the company's accounting system appear below. Sales Variable Costs Fixed Overhead Fixed Selling and Administrative $161,000 $730,000 $350,000 $234,000 In the company's accounting system all fixed costs for the company are fully allocated to products. Further investigation has revealed that f costs will be reduced by $93,000 if the Roller Blade Product is discontinued. What would be the effect on the company's overall net operating income if the Roller Blade Product were dropped? ixed overhead will be reduced to $90,000 and fixed selling and administrative Overall net operating income would increase by $15,000 Overall net operating income would increase by $143,000 Overall net operating income would decrease by $143,000 Overall net operating income would decrease by $15,000 c. d. Nifty Car manufactures doors that it uses for one of its components in its new "green" automobile. The annual 0 costs to manufacture 40,000 of these doors are: $200,000 Direct Material Direct Labor Variable Overhead Fixed Overhead 40,000 80,000 320,000 1920 Mackenzie Door Corporation has offered to provide the annual door needs for Nifty at $14 per door. If Nifty accepts this offer, fixed overhead will be reduced to $192,000 for the year. In addition, Nifty has no alternative use for the idle facilities would Nifty be better off to make the doors or buy the doors and by how a. $48,000 better to buy b. $48,000 better to make c. $112,000 better to buy if the decision was made to go with Mackenzie's offer. Based on this information, much? $112,000 better to make

Answer 1

Solution 27:

Direct labor efficiency variance = $54,000 F

(SH - AH) * SR = $54,000

(SH - 43500) * $12 = $54,000

Standard hours = 48000 hours

Standard labor hour per unit = 30

Nos of units produced = 48000 / 30 = 1600 units

Hence option d is correct.

Solution 28:

The overhead variance that is a measure of capacity utilization is "The overhead volume variance"

Hence option d is correct.

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