Standard Costs and Variance Analysis Paper 13


The following data relate to Tray Co.’s manufacturing operations:
Standard direct labor hours per unit 3
Actual direct labor hours 24,500
Number of units produced 8,000
Standard variable overhead per standard direct labor hour $2
Actual variable overhead $46,000
Tray’s variable overhead efficiency variance is


When calculating variances from standard costs, the difference between budgeted fixed overhead and the amount applied yields a


River Company uses a standard-cost accounting system. It applies overhead based on direct labor hours. The following overhead costs and production data are available for March:
Standard fixed overhead rate per DLH $1.50
Standard variable overhead rate per DLH $5.00
Budgeted monthly DLH 30,000
Actual DLH worked 28,000
Standard DLH allowed for actual production 27,500
Overall overhead variance -- favorable $2,500
What is the applied factory overhead for March?


Which type of variance will reflect overtime premiums when the overall volume of work is greater than expected?


Using the two-variance method for analyzing overhead, which of the following variances contains both variable and fixed overhead elements?
Controllable (Budget) Variance
Volume Variance
Efficiency Variance


Using the two-variance method for analyzing factory overhead, which of the following is used to compute the controllable (budget) variance?


Using the three-variance method for analyzing factory overhead, which of the following is used to compute the spending variance?
Actual Factory Overhead
Budget Allowance Based on Actual Input
Budget Allowance Based on Standard Input


Watson Company uses a predetermined factory overhead application rate based on direct labor cost. Watson’s budgeted factory overhead was $756,000 based on a budgeted volume of 60,000 direct labor hours, at a standard direct labor rate of $7.20 per hour. Actual factory overhead amounted to $775,000 with actual direct labor cost of $450,000 for the year ended December 31. How much was Watson’s over applied factory overhead?


Wheeler Company uses a standard-cost system. Wheeler prepared the following budget using normal capacity for the month of May:
Direct labor hours 36,000
Variable factory overhead $72,000
Fixed factory overhead $162,000
Actual results were as follows:
Direct labor hours worked 33,000
Total factory overhead $220,500
Standard DLH allowed for capacity attained 31,500
What is the budget (controllable) variance for May using the two-way analysis of overhead variances?


Coleman Company compiled the following information:
Actual factory overhead $22,500
Fixed overhead expenses, actual $10,800
Fixed overhead expenses, budgeted $10,500
Actual hours 5,250
Standard hours 5,700
Variable overhead rate per DLH $3.80
What is the spending variance assuming Coleman uses a three-way analysis of overhead?


Total Questions:
Correct Answers:
Wrong Answers: