144) A manufacturer of industrial equipment has a standard costing system based on standard
direct labor-hours (DLHs) as the measure of activity. Data from the company’s flexible budget for
manufacturing overhead are given below:
Denominator level of activity
8,000
DLHs
Overhead costs at the denominator activity level:
Variable overhead cost
$
56,400
Fixed overhead cost
$
100,800
–
The following data pertain to operations for the most recent period:
Actual hours
7,800
DLHs
Standard hours allowed for the actual output
7,735
DLHs
Actual total variable manufacturing overhead cost
$
54,210
Actual total fixed manufacturing overhead cost
$
100,200
–
What is the predetermined overhead rate to the nearest cent?
A) $19.30 per DLH
B) $19.65 per DLH
C) $19.80 per DLH
D) $20.15 per DLH
145) A manufacturer of industrial equipment has a standard costing system based on standard
direct labor-hours (DLHs) as the measure of activity. Data from the company’s flexible budget for
manufacturing overhead are given below:
Denominator level of activity
8,000
DLHs
Overhead costs at the denominator activity level:
Variable overhead cost
$
56,400
Fixed overhead cost
$
100,800
The following data pertain to operations for the most recent period:
Actual hours
7,800
DLHs
Standard hours allowed for the actual output
7,735
DLHs
Actual total variable manufacturing overhead cost
$
54,210
Actual total fixed manufacturing overhead cost
$
100,200
The overhead applied to products during the period was closest to:
A) $151,993
B) $154,410
C) $157,200
D) $153,270
Standard Corporation has developed standard manufacturing overhead costs based on a capacity
of 180,000 direct labor-hours (DLHs) as follows:
Standard overhead costs per unit:
Variable portion: 2 DLHs × $3 per DLH = $6
Fixed portion: 2 DLHs × $5 per DLH = $10
The following data pertain to operations in April:
Actual output
80,000
units
Actual direct labor cost
$
644,000
Actual direct labor-hours worked
165,000
DLHs
Variable overhead cost incurred
$
518,000
Fixed overhead cost incurred
$
860,000
146) The variable overhead rate variance for April was:
A) $15,000 Unfavorable
B) $23,000 Unfavorable
C) $38,000 Favorable
D) $38,000 Unfavorable
147) The variable overhead efficiency variance for April was:
A) $15,000 Unfavorable
B) $23,000 Unfavorable
C) $38,000 Favorable
D) $38,000 Unfavorable
148) The fixed manufacturing overhead budget variance for April was:
A) $40,000 Unfavorable
B) $40,000 Favorable
C) $60,000 Favorable
D) $60,000 Unfavorable
149) The fixed manufacturing overhead volume variance for April was:
A) $60,000 Unfavorable
B) $60,000 Favorable
C) $100,000 Favorable
D) $100,000 Unfavorable
150) Jessep Corporation has a standard cost system in which manufacturing overhead is applied on
the basis of standard direct labor-hours. The company has provided the following data concerning
its fixed manufacturing overhead costs in March:
14,000
hours
12,000
hours
15,000
hours
$
48,000
$
45,000
The fixed manufacturing overhead budget variance is:
A) $1,000 U
B) $3,000 U
C) $2,000 U
D) $2,000 F
151) Jessep Corporation has a standard cost system in which manufacturing overhead is applied on
the basis of standard direct labor-hours. The company has provided the following data concerning
its fixed manufacturing overhead costs in March:
14,000
hours
12,000
hours
15,000
hours
$
48,000
$
45,000
The fixed manufacturing overhead volume variance is:
A) $3,000 U
B) $3,000 F
C) $9,000 U
D) $6,000 U
152) Holl Corporation has provided the following data for November.
Denominator level of activity
4,800
machine-hours
Budgeted fixed manufacturing overhead costs
$
56,640
Standard machine-hours allowed for the actual output
5,100
machine-hours
Actual fixed manufacturing overhead costs
$
55,860
–
Required:
a. Compute the budget variance for November.
b. Compute the volume variance for November.
149
153) Rhine Incorporated makes a single product—a critical part used in commercial airline seats.
The company has a standard cost system in which it applies overhead to this product based on the
standard machine-hours allowed for the actual output of the period. Data concerning the most
recent year appear below:
Budgeted fixed manufacturing overhead
$134,680
Budgeted production (a)
20,000
units
Standard hours per unit (b)
1.40
machine-hours
Budgeted hours (a) × (b)
28,000
machine-hours
Applying Overhead:
Actual production (a)
17,000
units
Standard hours per unit (b)
1.40
machine-hours
Standard hours allowed for the actual production (a) × (b)
23,800
machine-hours
Actual fixed manufacturing overhead
$145,680
Actual hours
25,200
machine-hours
Required:
a. Determine the fixed overhead budget variance for the year.
b. Determine the fixed overhead volume variance for the year.
154) Flick Company uses a standard cost system in which manufacturing overhead is applied to
units of product on the basis of standard direct labor-hours. The company’s total budgeted variable
and fixed manufacturing overhead costs at the denominator level of activity are $20,000 for
variable overhead and $30,000 for fixed manufacturing overhead. The predetermined overhead
rate, including both fixed and variable components, is $2.50 per direct labor-hour. The standards
call for two direct labor-hours per unit of output produced. Last year, the company produced
11,500 units of product and worked 22,000 direct labor-hours. Actual costs were $22,500 for
variable overhead and $31,000 for fixed manufacturing overhead.
Required:
a. What is the denominator level of activity?
b. What were the standard hours allowed for the output last year?
c. What was the variable overhead rate variance?
d. What was the variable overhead efficiency variance?
e. What was the fixed manufacturing overhead budget variance?
f. What was the fixed manufacturing overhead volume variance?
155) Moozi Dairy Products processes and sells two products: milk and butter. Last year, Moozi
budgeted $1,200,000 of fixed manufacturing overhead and chose a denominator level of activity of
80,000 machine-hours. Each unit of milk at Moozi has a standard of 0.1 machine-hours and each
unit of butter has a standard of 0.08 machine-hours. Last year, Moozi processed 560,000 units of
milk and 340,000 units of butter. Moozi’s total fixed manufacturing overhead incurred last year
was $1,256,000. Actual machine-hours incurred for the year were 82,000. Moozi applies
manufacturing overhead to its products on the basis of standard machine-hours.
Required:
Compute Moozi’s fixed manufacturing overhead variances for last year.
156) Plantier Incorporated makes a single product—a cooling coil used in commercial
refrigerators. The company has a standard cost system in which it applies overhead to this product
based on the standard machine-hours allowed for the actual output of the period. The budgeted
fixed manufacturing overhead for the year was $136,950 and the budgeted hours were 27,500
machine-hours. Data concerning the actual results for the most recent year appear below:
Applying Overhead:
Actual production (a)
27,000
units
Standard hours per unit (b)
1.10
machine-hours
Standard hours allowed for the actual production (a) × (b)
29,700
machine-hours
Actual fixed manufacturing overhead
$154,950
Actual hours
28,300
machine-hours
Required:
a. Determine the fixed overhead budget variance for the year.
b. Determine the fixed overhead volume variance for the year.
155
157) Emanuele Incorporated makes a single product—a critical part used in commercial airline
seats. The company has a standard cost system in which it applies overhead to this product based
on the standard machine-hours allowed for the actual output of the period. Data concerning the
most recent year appear below:
Budgeted (Planned) Overhead:
Budgeted variable manufacturing overhead
$29,715
Budgeted fixed manufacturing overhead
53,340
Total budgeted manufacturing overhead
$83,055
Budgeted production (a)
15,000
units
Standard hours per unit (b)
0.70
machine-hours
Budgeted hours (a) × (b)
10,500
machine-hours
Applying Overhead:
Actual production (a)
16,000
units
Standard hours per unit (b)
0.70
machine-hours
Standard hours allowed for the actual production (a) × (b)
11,200
machine-hours
Actual Overhead and Hours:
Actual variable manufacturing overhead
$36,966
Actual fixed manufacturing overhead
38,340
Total actual manufacturing overhead
$75,306
Actual hours
10,100
machine-hours
Required:
a. Compute the variable component of the company’s predetermined overhead rate.
b. Compute the fixed component of the company’s predetermined overhead rate.
c. Compute the company’s predetermined overhead rate.
d. Determine the variable overhead rate variance for the year.
e. Determine the variable overhead efficiency variance for the year.
f. Determine the fixed overhead budget variance for the year.
g. Determine the fixed overhead volume variance for the year.
h. Determine whether overhead was underapplied or overapplied for the year and by how much.
158
158) Edlow Incorporated makes a single product—a critical part used in commercial airline seats.
The company has a standard cost system in which it applies overhead to this product based on the
standard labor-hours allowed for the actual output of the period. Data concerning the most recent
year appear below:
Budgeted (Planned) Overhead:
Budgeted variable manufacturing overhead
$41,325
Budgeted fixed manufacturing overhead
174,135
Total budgeted manufacturing overhead
$215,460
Budgeted production (a)
15,000
units
Standard hours per unit (b)
1.90
labor-hours
Budgeted hours (a) × (b)
28,500
labor-hours
Applying Overhead:
Actual production (a)
20,000
units
Standard hours per unit (b)
1.90
labor-hours
Standard hours allowed for the actual production (a) × (b)
38,000
labor-hours
Actual Overhead and Hours:
Actual variable manufacturing overhead
$18,216
Actual fixed manufacturing overhead
156,135
Total actual manufacturing overhead
$174,351
Actual hours
39,600
labor-hours
Required:
a. Determine the variable overhead rate variance for the year.
b. Determine the variable overhead efficiency variance for the year.
c. Determine the fixed overhead budget variance for the year.
d. Determine the fixed overhead volume variance for the year.
160
159) Held Incorporated makes a single product—an electrical motor used in many long-haul trucks.
The company has a standard cost system in which it applies overhead to this product based on the
standard machine-hours allowed for the actual output of the period. Data concerning the most
recent year appear below:
Budgeted (Planned) Overhead:
Budgeted variable manufacturing overhead
$65,520
Budgeted fixed manufacturing overhead
256,165
Total budgeted manufacturing overhead
$321,685
Budgeted production (a)
35,000
units
Standard hours per unit (b)
1.30
machine-hours
Budgeted hours (a) × (b)
45,500
machine-hours
Applying Overhead:
Actual production (a)
36,000
units
Standard hours per unit (b)
1.30
machine-hours
Standard hours allowed for the actual production (a) × (b)
46,800
machine-hours
Actual Overhead and Hours:
Actual variable manufacturing overhead
$93,528
Actual fixed manufacturing overhead
240,165
Total actual manufacturing overhead
$333,693
Actual hours
43,300
machine-hours
Actual variable overhead rate
$2.16
per machine-hour
Required:
a. Compute the variable component of the company’s predetermined overhead rate.
b. Compute the fixed component of the company’s predetermined overhead rate.
c. Compute the company’s predetermined overhead rate.
d. Determine the variable overhead rate variance for the year.
e. Determine the variable overhead efficiency variance for the year.
f. Determine the fixed overhead budget variance for the year.
g. Determine the fixed overhead volume variance for the year.
h. Determine whether overhead was underapplied or overapplied for the year and by how much.