113) A company’s flexible budget for the range of 35,000 units to 45,000 units of production
showed variable overhead costs of $2 per unit and fixed overhead costs of $72,000. The
company incurred total overhead costs of $148,800 while operating at a volume of 40,000 units.
The total controllable cost variance is:
A) $6,800 favorable.
B) $6,800 unfavorable.
C) $3,200 favorable.
D) $3,200 unfavorable.
E) $10,000 favorable.
114) Jefferson Co. uses the following standard to produce a single unit of its product: variable
overhead $6 (2 hrs. per unit @ $3/hr.). Actual data for the month show variable overhead costs
of $150,000, and 24,000 units produced. The total variable overhead variance is:
A) $6,000F.
B) $6,000U.
C) $78,000U.
D) $78,000F.
E) $0.
115) Grant Co. uses the following standard to produce a single unit of its product: Variable
overhead (2 hrs. per unit @ $4/hr.) Actual data for the month show total variable overhead costs
of $190,000, and 23,000 units produced. The total variable overhead variance is:
A) $6,000F.
B) $6,000U.
C) $78,000U.
D) $78,000F.
E) $0.
116) Claymore Corp. has the following information about its standards and production activity
for September. The volume variance is:
Actual total factory overhead incurred
$
28,175
Standard factory overhead:
Variable overhead
$
3.10
per unit produced
Fixed overhead
($12,000/6,000 estimated units to be produced)
$
2
per unit
Actual units produced
4,800
units
A) $1,295U.
B) $1,295F.
C) $2,400U.
D) $2,400F.
E) $3,695U.
Flexible budget fixed overhead (given)
$
12,000
$2/unit)
Volume variance
$
U
117) Claymore Corp. has the following information about its standards and production activity
for September. The controllable variance is:
Actual total factory overhead incurred
$
28,175
Standard factory overhead:
Variable overhead
$
3.10
per unit produced
Fixed overhead
($12,000/6,000 estimated units to be produced)
$
2
per unit
Actual units produced
4,800
units
A) $1,295U.
B) $1,295F.
C) $2,400U.
D) $2,400F.
E) $3,695U.
Flexible budget overhead
Variable (4,800 × $3.10/unit)
14,880
Fixed (given)
12,000
Total flexible budgeted overhead
$
26,880
Actual overhead incurred (given)
Total controllable variance
1,295
U
118) All of the following are associated with the volume variance except:
A) It results from operating at a different capacity than predicted.
B) Failing to meet expected production results from lower customer demand.
C) The volume variance is based solely on fixed overhead.
D) It is considered to be under management’s control.
E) It is considered outside the control of the product manager.
119) The overhead cost variance is calculated as:
A) Standard applied overhead less budgeted overhead.
B) Actual overhead incurred less standard overhead applied.
C) Budgeted overhead less standard overhead applied.
D) Actual overhead incurred less standard applied overhead.
E) Actual fixed cost less budgeted overhead.
120) Levelor Company’s flexible budget shows $10,710 of overhead at 75% of capacity, which
was the operating level achieved during May. However, the company applied overhead to
production during May at a rate of $2.00 per direct labor hour based on a budgeted operating
level of 6,120 direct labor hours (90% of capacity). If overhead actually incurred was $11,183
during May, the controllable variance for the month was:
A) $473 unfavorable.
B) $473 favorable.
C) $1,530 favorable.
D) $1,530 unfavorable.
E) $1,057 favorable.
121) Regent, Inc. uses the following standard to produce a single unit of its product: overhead $6
(2 hrs. @ $3/hr.). The flexible budget for overhead is $100,000 plus $1 per direct labor hour.
Actual data for the month show overhead costs of $150,000, and 24,000 units produced. The
overhead volume variance is:
A) $10,000 favorable.
B) $12,000 favorable.
C) $4,000 unfavorable.
D) $16,000 unfavorable.
E) $36,000 unfavorable.
122) The variable overhead spending variance, the fixed overhead spending variance, and the
variable overhead efficiency variance can be combined to find the:
A) Production variance.
B) Quantity variance.
C) Volume variance.
D) Price variance.
E) Controllable variance.
123) The following information relating to a company’s overhead costs is available.
Budgeted fixed overhead rate per machine hour
$
0.50
Actual variable overhead
$
73,000
Budgeted variable overhead rate per machine hour
$
2.50
Actual fixed overhead
$
17,000
Budgeted hours allowed for actual output achieved
32,000
Based on this information, the total overhead variance is:
A) $7,000 favorable.
B) $6,000 favorable.
C) $1,000 unfavorable.
D) $6,000 unfavorable.
E) $1,000 favorable.
Actual Overhead
$73,000 variable + $17,000 fixed = $90,000
Overhead
32,000 hours
$3.00 × 32,000 hours
$96,000
124) The following information relating to a company’s overhead costs is available.
Actual total variable overhead
$
73,000
Actual total fixed overhead
$
17,000
Budgeted variable overhead rate per machine hour
$
2.50
Budgeted total fixed overhead
$
15,000
Budgeted machine hours allowed for actual output
30,000
Based on this information, the total variable overhead variance is:
A) $2,000 favorable.
B) $6,000 favorable.
C) $2,000 unfavorable.
D) $6,000 unfavorable.
E) $1,000 favorable.
Actual Variable Overhead
$73,000
Allocated Overhead
$2.50 × 30,000 hours = $75,000
Variable Overhead Variance
125) When recording variances in a standard cost system:
A) Only unfavorable material variances are debited.
B) Only unfavorable material variances are credited.
C) Both unfavorable material and labor variances are credited.
D) All unfavorable variances are debited.
E) All unfavorable variances are credited.
126) When standard manufacturing costs are recorded in the accounts and the cost variances are
immaterial at the end of the accounting period, the cost variances should be:
A) Carried forward to the next accounting period.
B) Allocated between cost of goods sold, finished goods, and work in process.
C) Closed to cost of goods sold.
D) Written off as a selling expense.
E) Ignored.
127) Seafarer Company established a standard direct materials cost of 1.5 gallons at $2 per
gallon for one unit of its product. During the past month, actual production was 6,500 units. The
material quantity variance was $700 favorable and the material price variance was $470
unfavorable. The entry to charge Work in Process Inventory for the standard material costs
during the month and to record the direct material variances in the accounts would include all of
the following except:
A) A debit to Work in Process for $19,500.
B) A credit to Raw Materials for $19,270.
C) A debit to Direct Material Price Variance for $470.
D) A credit to Direct Material Quantity Variance for $700.
E) A debit to Cost of Goods Sold for $230.
128) When recording the journal entry for labor, the Work in Process Inventory account is
A) Debited for standard labor cost.
B) Debited for actual labor cost.
C) Credited for standard labor cost.
D) Credited for actual labor cost.
E) Not used.
129) Cavern Company’s output for the current period results in a $5,250 unfavorable direct
material price variance. The actual price per pound is $56.50 and the standard price per pound is
$55.00. How many pounds of material are used in the current period?
A) 5,393.
B) 5,110.
C) 3,500.
D) 3,750.
E) 4,000.
130) Sanchez Company’s output for the current period was assigned a $200,000 standard direct
materials cost. The direct materials variances included a $5,000 favorable price variance and a
$3,000 unfavorable quantity variance. What is the actual total direct materials cost for the current
period?
A) $208,000.
B) $198,000.
C) $202,000.
D) $192,000.
E) $205,000.
131) Sanchez Company’s output for the current period was assigned a $400,000 standard direct
labor cost. The direct labor variances included a $10,000 unfavorable direct labor rate variance
and a $4,000 favorable direct labor efficiency variance. What is the actual total direct labor cost
for the current period?
A) $414,000.
B) $386,000.
C) $394,000.
D) $406,000.
E) $410,000.
132) Milltown Company specializes in selling used cars. During the month, the dealership sold
22 cars at an average price of $15,000 each. The budget for the month was to sell 20 cars at an
average price of $16,000. Compute the dealership’s sales price variance for the month.
A) $22,000 unfavorable.
B) $10,000 favorable.
C) $22,000 favorable.
D) $32,000 unfavorable.
E) $32,000 favorable.
133) Milltown Company sells used cars. During the month, the dealership sold 22 cars at an
average price of $15,000 each. The budget for the month was to sell 20 cars at an average price
of $16,000. Compute the dealership’s sales volume variance for the month.
A) $22,000 unfavorable.
B) $10,000 favorable.
C) $22,000 favorable.
D) $32,000 unfavorable.
E) $32,000 favorable.
134) Milltown Company sells used cars. During the month, the dealership sold 22 cars at an
average price of $15,000 each. The budget for the month was to sell 20 cars at an average price
of $16,000. Compute the dealership’s total sales variance for the month.
A) $22,000 unfavorable.
B) $10,000 favorable.
C) $22,000 favorable.
D) $32,000 unfavorable.
E) $32,000 favorable.
135) Claremont Company sells refurbished copiers. During the month, the company sold 180
copiers for total sales of $540,000. The budget for the month was to sell 175 copiers at an
average price of $3,200. The sales price variance for the month was:
A) $20,000 unfavorable.
B) $20,000 favorable.
C) $36,000 unfavorable.
D) $32,000 unfavorable.
E) $36,000 favorable.
136) Claremont Company sells refurbished copiers. During the month, the company sold 180
copiers at an average price of $3,000 each. The budget for the month was to sell 175 copiers at
an average price of $3,200. The expected total sales for 180 copiers were:
A) $540,000.
B) $576,000.
C) $525,000.
D) $560,000.
E) $550,000.
137) Fletcher Company collected the following data regarding production of one of its products.
Compute the standard quantity allowed for the actual output.
Direct materials standard (6 lbs. @ $2/lb.)
$
12
per finished unit
Actual direct materials used
243,000
lbs.
Actual finished units produced
40,000
units
Actual cost of direct materials used
$
483,570
A) 243,000 pounds.
B) 240,000 pounds.
C) 40,000 pounds.
D) 480,000 pounds.
E) 80,000 pounds.
138) Fletcher Company collected the following data regarding production of one of its products.
Compute the total direct materials cost variance.
Direct materials standard (6 lbs. @ $2/lb.)
$
12
per finished unit
Actual direct materials used
243,000
lbs.
Actual finished units produced
40,000
units
Actual cost of direct materials used
$
483,570
A) $6,000 favorable.
B) $3,570 unfavorable.
C) $2,430 favorable.
D) $6,000 unfavorable.
E) $3,570 favorable.
139) Fletcher Company collected the following data regarding production of one of its products.
Compute the direct materials price variance.
Direct materials standard (6 lbs. @ $2/lb.)
$
12
per finished unit
Actual direct materials used
243,000
lbs.
Actual finished units produced
40,000
units
Actual cost of direct materials used
$
483,570
A) $2,430 unfavorable.
B) $3,570 unfavorable.
C) $2,430 favorable.
D) $6,000 unfavorable.
E) $3,570 favorable.
140) Fletcher Company collected the following data regarding production of one of its products.
Compute the direct materials quantity variance.
Direct materials standard (6 lbs. @ $2/lb.)
$
12
per finished unit
Actual direct materials used
243,000
lbs.
Actual finished units produced
40,000
units
Actual cost of direct materials used
$
483,570
A) $2,430 unfavorable.
B) $3,570 unfavorable.
C) $2,430 favorable.
D) $6,000 unfavorable.
E) $3,570 favorable.
141) Fletcher Company collected the following data regarding production of one of its products.
Compute the total direct labor cost variance.
Direct labor standard (2 hrs. @ $12.75/hr.)
$
25.50
per finished unit
Actual direct labor hours
81,500
hrs.
Actual finished units produced
40,000
units
Actual cost of direct labor
$
1,100,250
A) $80,250 unfavorable.
B) $80,250 favorable.
C) $61,125 favorable.
D) $61,125 unfavorable.
E) $19,125 favorable.