101. 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.
Under a three-way breakdown (decomposition) of the total overhead variance, what is the
total
factory overhead spending variance
for Zero Company in December?
102. 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.
Under a four-way breakdown (decomposition) of the total overhead variance, what is the
variable
factory overhead spending variance
for Zero Company for December?
103. 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 four-way breakdown (decomposition) of the total overhead variance, what
is the
variable factory overhead efficiency variance
for Zero Company in December?
104. 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 was the
fixed factory overhead spending variance
for Zero Company in December?
105. 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 a four-variance breakdown (decomposition) of the total overhead variance, what is the
fixed factory overhead efficiency variance
for the period?
106. Gerhan Company’s flexible budget for the units actually manufactured in May shows
$15,640 of total factory overhead; this output level represents 70% of available capacity. During
May the company applied overhead to production at the rate of $3.00 per direct labor hour (DLH),
based on a denominator volume level of 6,120 DLHs, which represents 90% of available capacity.
The company used 5,000 DLHs and incurred $16,500 of total factory overhead cost during May,
including $6,800 for fixed factory overhead.
What is the
factory overhead production-volume variance
for Gerhan Company in May?
107. Gerhan Company’s flexible budget for the units actually manufactured in May shows
$15,640 of total factory overhead; this output level represents 70% of available capacity. During
May the company applied overhead to production at the rate of $3.00 per direct labor hour (DLH),
based on a denominator volume level of 6,120 DLHs, which represents 90% of available capacity.
The company used 5,000 DLHs and incurred $16,500 of total factory overhead cost during May,
including $6,800 for fixed factory overhead.
What is the
total factory overhead flexible-budget variance
for Gerhan Company in May?
108. Gerhan Company’s flexible budget for the units actually manufactured in May shows
$15,640 of total factory overhead; this output level represents 70% of available capacity. During
May the company applied overhead to production at the rate of $3.00 per direct labor hour (DLH),
based on a denominator volume level of 6,120 DLHs, which represents 90% of available capacity.
The company used 5,000 DLHs and incurred $16,500 of total factory overhead cost during May,
including $6,800 for fixed factory overhead.
What is the
factory overhead efficiency variance
for Gerhan Company in May, under the
assumption that the company uses a two-variance breakdown (decomposition) of the total
overhead variance?
109. Gerhan Company’s flexible budget for the units actually manufactured in May shows
$15,640 of total factory overhead; this output level represents 70% of available capacity. During
May the company applied overhead to production at the rate of $3.00 per direct labor hour (DLH),
based on a denominator volume level of 6,120 DLHs, which represents 90% of available capacity.
The company worked 5,000 DLHs and incurred $16,500 of total factory overhead cost during May,
including $6,800 for fixed factory overhead.
Under a three-variance breakdown (decomposition) of the total overhead variance, what is the
total factory overhead spending variance
for May?
110. Gerhan Company’s flexible budget for the units actually manufactured in May shows
$15,640 of total factory overhead; this output level represents 70% of available capacity. During
May the company applied overhead to production at the rate of $3.00 per direct labor hour (DLH),
based on a denominator volume level of 6,120 DLHs, which represents 90% of available capacity.
The company used 5,000 DLHs and incurred $16,500 of total factory overhead cost during May,
including $6,800 for fixed factory overhead.
What is the
variable factory overhead spending variance
in May, assuming Gerhan uses a four-
variance breakdown (decomposition) of the total overhead variance?
111. Gerhan Company’s flexible budget for the units actually manufactured in May shows
$15,640 of total factory overhead; this output level represents 70% of available capacity. During
May the company applied overhead to production at the rate of $3.00 per direct labor hour (DLH),
based on a denominator volume level of 6,120 DLHs, which represents 90% of available capacity.
The company used 5,000 DLHs and incurred $16,500 of total factory overhead cost during May,
including $6,800 for fixed factory overhead.
What is the
factory overhead efficiency variance
for May under the assumption that Gerhan uses
a four-variance breakdown (decomposition) of the total overhead variance?
112. Gerhan Company’s flexible budget for the units actually manufactured in May shows
$15,640 of total factory overhead; this output level represents 70% of available capacity. During
May the company applied overhead to production at the rate of $3.00 per direct labor hour (DLH),
based on a denominator volume level of 6,120 DLHs, which represents 90% of available capacity.
The company used 5,000 DLHs and incurred $16,500 of total factory overhead cost during May,
including $6,800 for fixed factory overhead.
What is the
fixed factory overhead spending variance
in December for Gerhan Company?
113. Oslund Company manufactures only one product and uses a standard cost system.
During the past month, the following variances were observed:
Direct labor rate variance $30,000 favorable
Direct labor efficiency variance 50,000 unfavorable
Variable overhead efficiency variance 20,000 unfavorable
Standard direct labor hours (DLH) per unit 5
Oslund applies variable overhead using a standard rate of $20 per standard DLH allowed. During
the month, Oslund used 20% more DLHs than the total standard hours for the units
manufactured.
What were the total standard direct labor hours for the units manufactured by Oslund Company
during the past month?
114. Oslund Company manufactures only one product and uses a standard cost system.
During the past month, the following variances were observed:
Direct labor rate variance $30,000 favorable
Direct labor efficiency variance 50,000 unfavorable
Variable overhead efficiency variance 20,000 unfavorable
Standard direct labor hours (DLH) per unit 5
Oslund applies variable overhead using a standard rate of $20 per standard DLH allowed. During
the month, Oslund used 20% more DLHs than the total standard hours for the units
manufactured.
What were the total actual direct labor hours worked by Oslund Company during the past
month?
115. Megan, Inc. uses the following standard costs per unit for one of its products: Direct labor
(2 hrs. @ $5/hr.) = $10; overhead (2 hrs. @ $2.50/hr.) = $5. The flexible budget for overhead is
$120,000 plus $1 per direct labor hour (DLH). Actual data for the past month show total overhead
costs of $225,000, total fixed overhead of $123,000, 85,000 hours worked, and 40,000 units
produced.
What is the budgeted denominator activity level for Megan, Inc., in direct labor hours (DLHs)?
116. Megan, Inc. uses the following standard costs per unit for one of its products: Direct labor
(2 hrs. @ $5/hr.) = $10; overhead (2 hrs. @ $2.50/hr.) = $5. The flexible budget for overhead is
$120,000 plus $1 per direct labor hour (DLH). Actual data for the past month show total overhead
costs of $225,000, total fixed overhead of $123,000, 85,000 hours worked, and 40,000 units
produced.
The
total overhead variance
for the past month for Megan, Inc. was: