Standard Costs and Variance Analysis Paper 11

1

The fixed overhead volume variance is the






2

Which of these variances is least significant for cost control?






3

Lee Manufacturing uses a standard cost system with overhead applied based upon direct labor hours. The manufacturing budget for the production of 5,000 units for the month of May included the following information:
Direct labor (10,000 hours at $15 per hour) $150,000
Variable overhead 30,000
Fixed overhead 80,000
During May, 6,000 units were produced and the fixed overhead budget variance was $2,000 favorable. Fixed overhead during May was






4

The variance in an absorption costing system that measures the departure from the denominator level of activity that was used to set the fixed overhead rate is the






5

The production volume variance is due to






6

Coach Corporation is considering which capacity measure is appropriate to use as the denominator level of activity when applying fixed overhead to units produced. Assume that Coach selects direct labor hours as the cost driver and the following additional data are available from the prior year:
Standard direct labor hours for normal capacity 200,000 Hours
Standard direct labor hours allowed for units produced in the prior year 210,000 Hours
Standard direct labor hours for the master budget capacity 220,000 Hours
Which of the following capacity measures for the denominator-level of activity would have resulted in an unfavorable volume variance?






7

Which one of the following variances is of least significance from a behavioral control perspective?






8

A fixed overhead volume variance based on standard direct labor hours measures






9

Franklin Glass Works’ production budget for the year ended November 30 was based on 200,000 units. Each unit requires 2 standard hours of labor for completion. Total overhead was budgeted at $900,000 for the year, and the fixed overhead rate was estimated to be $3.00 per unit. Both fixed and variable overhead are assigned to the product on the basis of direct labor hours. The actual data for the year ended November 30 are presented as follows.
Actual production in units 198,000
Actual direct labor hours 440,000
Actual variable overhead $352,000
Actual fixed overhead $575,000
The standard hours allowed for actual production for the year ended November 30 total






10

Franklin Glass Works’ production budget for the year ended November 30 was based on 200,000 units. Each unit requires 2 standard hours of labor for completion. Total overhead was budgeted at $900,000 for the year, and the fixed overhead rate was estimated to be $3.00 per unit. Both fixed and variable overhead are assigned to the product on the basis of direct labor hours. The actual data for the year ended November 30 are presented as follows.
Actual production in units 198,000
Actual direct labor hours 440,000
Actual variable overhead $352,000
Actual fixed overhead $575,000
Franklin’s variable overhead efficiency variance for the year is






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