85.
Dickey Company had total underapplied overhead of $15,000. Additional information is as follows:
What is the actual total overhead for the period?
86.
What is the fixed overhead spending (budget) variance for May?
87.
What is the production volume variance for May?
88.
Is the production volume variance favorable or unfavorable?
89. A standard cost system may be used in: (CPA adapted)
90. When a manager is concerned with monitoring total cost, total revenue, and net profit
conditioned upon the level of productivity, an accountant should normally recommend: (CPA
adapted)
91. In analyzing company operations, the controller of the Jason Corporation found a $250,000
favorable flexible budget revenue variance. The variance was calculated by comparing the actual
results with the flexible budget. This variance can be wholly explained by: (CMA adapted)
92. The standard unit cost is used in the calculation of which of the following variances? (CPA
adapted)
93. A favorable materials price variance coupled with an unfavorable materials usage variance
would most likely result from: (CMA adapted)
94. Excess direct labor wages resulting from overtime premium will be disclosed in which type
of variance? (CPA adapted)
95. The budget for the month of May was for 9,000 units at a direct materials cost of $15 per
unit. Direct labor was budgeted at 45 minutes per unit for a total of $81,000. Actual output for the
month was 8,500 units with $127,500 in direct materials and $77,775 in direct labor expense. The
direct labor standard of 45 minutes was obtained throughout the month. Variance analysis of the
performance for the month of May would show a(n): (CMA adapted)
96. Tub Company uses a standard cost system. The following information pertains to direct
labor for product B for the month of October:
What were the actual hours worked for the month of October?
97. The fixed factory overhead application rate is a function of a predetermined activity level.
If standard hours allowed for good output equal this predetermined activity level for a given
period, the volume variance will be: (CPA adapted)
98. Which one of the following variances is of least significance from a behavioral control
perspective? (CMA adapted)
99. Which of the following organizational policies is most likely to result in undesirable
managerial behavior? (CMA adapted)
100. Based on past experience, a company has developed the following budget formula for
estimating its shipping expenses. The company’s shipments average 12 lbs. per shipment:
Shipping costs = $16,000 + ($0.50 × lbs. shipped).
The planned activity and actual activity regarding orders and shipments for the current month are
given in the following schedule:
The actual shipping costs for the month amounted to $21,000. The appropriate monthly flexible
budget allowance for shipping costs for the purpose of performance evaluation would be: (CMA
adapted)
101. When computing standard cost variances, the difference between actual and standard
price multiplied by actual quantity yields a(n): (CMA adapted)
102. Todco planned to produce 3,000 units of its single product, Teragram, during November.
The standard specifications for one unit of Teragram include six pounds of material at $0.30 per
pound. Actual production in November was 3,100 units of Teragram. The accountant computed a
favorable materials purchase price variance of $380 and an unfavorable materials quantity
variance of $120. Based on these variances, one could conclude that: (CMA adapted)
103. Tower Company planned to produce 3,000 units of its single product, Titactium, during
November. The standards for one unit of Titactium specify six pounds of materials at $0.30 per
pound. Actual production in November was 3,100 units of Titactium. There was a favorable
materials price variance of $380 and an unfavorable materials quantity variance of $120. Based on
these variances, one could conclude that: (CMA adapted)
104. An unfavorable direct labor efficiency variance could be caused by: (CMA adapted)
105. Variable manufacturing overhead is applied to products on the basis of standard direct
labor-hours. If the direct labor efficiency variance is unfavorable, the variable overhead efficiency
variance will be: (CMA adapted)
16–79
106. The Hageness Company has had great difficulty in controlling overhead costs. At a recent
convention, the president heard about a control device for overhead costs known as a flexible
budget and she has hired you to implement this budgeting program. After some effort, you
develop the following cost formulas for the company’s machining department. These costs are
based on a normal operating range of 15,000 to 23,000 machine-hours per month:
During March, the first month after your preparation of the above data, the machining department
worked 18,000 machine-hours and produced 9,000 units of product. The actual costs of this
production were:
The department had originally been budgeted to work 19,000 machine-hours during March.
Required:
Prepare a performance report for the machining department for the month of March including
columns for the (a) actual results, (b) flexible budget, (c) flexible budget variance, (d) master
budget, and (e) sales activity variance.
