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87. Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The
following budgeted information pertains to 2016:
Denominator volume—number of units 8,000
Denominator volume—percent of capacity 80%
Denominator volume—standard direct labor hours 24,000
Budgeted variable factory overhead cost at denominator volume $103,200
Total standard factory overhead rate per direct labor hour $15.10
During 2016, Bluecap worked 28,000 direct labor hours and manufactured 9,600 units. The
actual factory overhead cost for the year was $14,000 greater than the flexible budget amount for
the units produced, of which $6,000 was due to fixed factory overhead. In preparing a budget for
2017 Bluecap decided to raise the level of operation to 90% of capacity (a level it considers to be
"practical capacity"), to manufacture 9,000 units at a budgeted total of 27,000 direct labor hours.
The
total factory overhead
spending variance
in 2016, based on a three-variance breakdown
(decomposition) of the total overhead variance for Bluecap Co., was:
88. Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The
following budgeted information pertains to 2016:
Denominator volume—number of units 8,000
Denominator volume—percent of capacity 80%
Denominator volume—standard direct labor hours 24,000
Budgeted variable factory overhead cost at denominator volume $103,200
Total standard factory overhead rate per direct labor hour $15.10
During 2016, Bluecap worked 28,000 direct labor hours and manufactured 9,600 units. The
actual factory overhead cost for the year was $14,000 greater than the flexible budget amount for
the units produced, of which $6,000 was due to fixed factory overhead. In preparing a budget for
2017 Bluecap decided to raise the level of operation to 90% of capacity (a level it considers to be
"practical capacity"), to manufacture 9,000 units at a budgeted total of 27,000 direct labor hours.
The
variable overhead spending variance
in 2016 for Bluecap Co. was:
89. Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The
following budgeted information pertains to 2016:
Denominator volume—number of units 8,000
Denominator volume—percent of capacity 80%
Denominator volume—standard direct labor hours 24,000
Budgeted variable factory overhead cost at denominator volume $103,200
Total standard factory overhead rate per direct labor hour $15.10
During 2016, Bluecap worked 28,000 direct labor hours and manufactured 9,600 units. The
actual factory overhead cost for the year was $14,000 greater than the flexible budget amount for
the units produced, of which $6,000 was due to fixed factory overhead. In preparing a budget for
2017 Bluecap decided to raise the level of operation to 90% of capacity (a level it considers to be
"practical capacity"), to manufacture 9,000 units at a budgeted total of 27,000 direct labor hours.
The
fixed overhead production volume variance
for Bluecap Co. in 2016 was:
90. Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The
following budgeted information pertains to 2016:
Denominator volume—number of units 8,000
Denominator volume—percent of capacity 80%
Denominator volume—standard direct labor hours 24,000
Budgeted variable factory overhead cost at denominator volume $103,200
Total standard factory overhead rate per direct labor hour $15.10
During 2016, Bluecap worked 28,000 direct labor hours and manufactured 9,600 units. The
actual factory overhead cost for the year was $14,000 greater than the flexible budget amount for
the units produced, of which $6,000 was due to fixed factory overhead. In preparing a budget for
2017 Bluecap decided to raise the level of operation to 90% of capacity (a level it considers to be
"practical capacity"), to manufacture 9,000 units at a budgeted total of 27,000 direct labor hours.
The
total overhead variance
in 2016 for Bluecap Co. was:
91. Neptune Inc. uses a standard cost system and has the following information for the most
recent month, April:
Actual direct labor hours (DLHs) worked 17,000
Standard direct labor hours allowed for good output produced this period 18,000
Actual total factory overhead costs incurred $45,400
Budgeted fixed factory overhead costs $10,800
Denominator activity level, in direct labor hours (DLHs) 15,000
Total factory overhead application rate per standard direct labor hour $2.70
The
total underapplied or overapplied factory overhead
in April for Neptune, Inc. was:
92. Neptune Inc. uses a standard cost system and has the following information for the most
recent month, April:
Actual direct labor hours (DLHs) worked 17,000
Standard direct labor hours allowed for good output produced this period 18,000
Actual total factory overhead costs incurred $45,400
Budgeted fixed factory overhead costs $10,800
Denominator activity level, in direct labor hours (DLHs) 15,000
Total factory overhead application rate per standard direct labor hour $2.70
The
total factory overhead spending variance
in April for Neptune, Inc. was:
93. Neptune Inc. uses a standard cost system and has the following information for the most
recent month, April:
Actual direct labor hours (DLHs) worked 17,000
Standard direct labor hours allowed for good output produced this period 18,000
Actual total factory overhead costs incurred $45,400
Budgeted fixed factory overhead costs $10,800
Denominator activity level, in direct labor hours (DLHs) 15,000
Total factory overhead application rate per standard direct labor hour $2.70
The factory
overhead production volume variance
in April for Neptune, Inc. was:
94. Neptune Inc. uses a standard cost system and has the following information for the most
recent month, April:
Actual direct labor hours (DLHs) worked 17,000
Standard direct labor hours allowed for good output produced this period 18,000
Actual total factory overhead costs incurred $45,400
Budgeted fixed factory overhead costs $10,800
Denominator activity level, in direct labor hours (DLHs) 15,000
Total factory overhead application rate per standard direct labor hour $2.70
The
variable factory overhead efficiency variance
for Neptune, Inc. in April was:
95. Neptune Inc. uses a standard cost system and has the following information for the most
recent month, April:
Actual direct labor hours (DLHs) worked 17,000
Standard direct labor hours allowed for good output produced this period 18,000
Actual total factory overhead costs incurred $45,400
Budgeted fixed factory overhead costs $10,800
Denominator activity level, in direct labor hours (DLHs) 15,000
Total factory overhead application rate per standard direct labor hour $2.70
The
total factory overhead flexible-budget variance
in April for Neptune, Inc. was:
96. At the denominator activity level, Norland Company's total overhead budget for 25,000
units of production shows variable overhead costs of $36,000 and fixed overhead costs of
$32,000. During the most recent period, the company incurred total overhead costs of $61,400 to
manufacture 20,000 units.
The
total overhead flexible-budget variance
for Norland Co. for the most recent period was:
97. At the denominator activity level, Norland Company's total overhead budget for 25,000
units of production shows variable overhead costs of $36,000 and fixed overhead costs of
$32,000. During the most recent period, the company incurred total overhead costs of $61,400 to
manufacture 20,000 units.
The total factory overhead variance for Norland Co. for the most recent period was:
98. Zero Company's standard factory overhead rate is $3.75 per direct labor hour (DLH),
calculated at 90% capacity = 900 standard DLHs. In December, the company operated at 80% of
capacity, or 800 standard DLHs. Budgeted factory overhead at 80% of capacity is $3,150, of
which $1,350 is fixed overhead. For December, the actual factory overhead cost was $3,800 for
840 actual DLHs, of which $1,300 was for fixed factory overhead.
What is the
factory overhead production volume variance
for Zero Company in December?
99. Zero Company's standard factory overhead rate is $3.75 per direct labor hour (DLH),
calculated at 90% capacity = 900 standard DLHs. In December, the company operated at 80% of
capacity, or 800 standard DLHs. Budgeted factory overhead at 80% of capacity is $3,150, of
which $1,350 is fixed overhead. For December, the actual factory overhead cost was $3,800 for
840 actual DLHs, of which $1,300 was for fixed factory overhead.
If Zero Company uses a two-way breakdown (decomposition) of the total overhead variance,
what is the
total factory overhead flexible-budget variance
for December?
100. Zero Company's standard factory overhead rate is $3.75 per direct labor hour (DLH),
calculated at 90% capacity = 900 standard DLHs. In December, the company operated at 80% of
capacity, or 800 standard DLHs. Budgeted factory overhead at 80% of capacity is $3,150, of
which $1,350 is fixed overhead. For December, the actual factory overhead cost was $3,800 for
840 actual DLHs, of which $1,300 was for fixed factory overhead.
Assuming the use of a two-way breakdown (decomposition) of the total overhead variance, what
is the
factory overhead efficiency variance
for Zero Company in December?
