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111) When there is a difference between the actual volume of production and the standard volume of
production, which of the following, based solely on fixed overhead, occurs:
A) Volume variance.
B) Production variance.
C) Quantity variance.
D) Overhead cost variance.
E) Controllable variance.
112) A company's flexible budget for 48,000 units of production showed variable overhead costs of
$72,000 and fixed overhead costs of $64,000. The company incurred overhead costs of $122,800
while operating at a volume of 40,000 units. The total controllable cost variance is:
A) $1,200 unfavorable.
B) $13,200 favorable.
C) $13,200 unfavorable.
D) $15,200 favorable.
E) $1,200 favorable.
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 unfavorable.
B) $3,200 unfavorable.
C) $3,200 favorable.
D) $10,000 favorable.
E) $6,800 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) $78,000U. B) $0. C) $6,000F. D) $78,000F. E) $6,000U.
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) $78,000F. B) $78,000U. C) $6,000U. D) $0. E) $6,000F.
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) $2,400F. B) $3,695U. C) $1,295U. D) $1,295F. E) $2,400U.
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) $2,400U. B) $1,295F. C) $1,295U. D) $3,695U. E) $2,400F.
118) Regarding overhead costs, as volume increases:
A) Unit fixed cost increases, unit variable cost decreases.
B) Unit fixed cost decreases, unit variable cost increases.
C) Unit variable cost decreases, unit fixed cost remains constant.
D) Both unit fixed cost and unit variable cost remain constant.
E) Unit fixed cost decreases, unit variable cost remains constant.
119) Regarding overhead costs, as volume increases:
A) Total variable cost decreases, total fixed cost remains constant.
B) Both total fixed cost and total variable cost increase.
C) Total fixed cost increases, total variable cost remains constant.
D) Total fixed cost remains constant, total variable cost increases.
E) Both total fixed cost and total variable cost remain constant.
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) $1,530 unfavorable.
C) $1,057 favorable.
D) $1,530 favorable.
E) $473 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) $16,000 unfavorable.
B) $36,000 unfavorable.
C) $12,000 favorable.
D) $10,000 favorable.
E) $4,000 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) Quantity variance.
B) Controllable variance.
C) Volume variance.
D) Price variance.
E) Production 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) $6,000 unfavorable.
B) $6,000 favorable.
C) $1,000 unfavorable.
D) $1,000 favorable.
E) $7,000 favorable.
94
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) $6,000 unfavorable.
B) $2,000 unfavorable.
C) $6,000 favorable.
D) $1,000 favorable.
E) $2,000 favorable.
96
125) When recording variances in a standard cost system:
A) Both unfavorable material and labor variances are credited.
B) All unfavorable variances are credited.
C) All unfavorable variances are debited.
D) Only unfavorable material variances are debited.
E) Only unfavorable material 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) Closed to cost of goods sold.
B) Written off as a selling expense.
C) Ignored.
D) Carried forward to the next accounting period.
E) Allocated between cost of goods sold, finished goods, and work in process.
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 credit to Raw Materials for $19,270.
B) A debit to Cost of Goods Sold for $230.
C) A credit to Direct Material Quantity Variance for $700.
D) A debit to Work in Process for $19,500.
E) A debit to Direct Material Price Variance for $470.
128) When recording the journal entry for labor, the Work in Process Inventory account is
A) Credited for actual labor cost.
B) Credited for standard labor cost.
C) Debited for actual labor cost.
D) Not used.
E) Debited for standard labor cost.
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) 3,750. B) 4,000. C) 5,393. D) 3,500. E) 5,110.
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) $202,000. B) $192,000. C) $208,000. D) $198,000. E) $205,000.
