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Topic Area: Using Standard Costs – Variable Manufacturing Overhead Variances
83.
Welcome Corporation produces metal telephone poles. In the most recent month, the
company budgeted production of 4,100 poles. Actual production was 4,400 poles.
According to standards, each pole requires 7.0 machine-hours. The actual machine-hours
for the month were 31,140 machine-hours. The standard variable manufacturing overhead
rate is $2.50 per machine-hour. The actual variable manufacturing overhead cost for the
month was $83,787. The variable overhead efficiency variance is:
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84.
Sholette Manufacturing Corporation has a standard cost system in which it applies
manufacturing overhead to products on the basis of standard machine-hours (MHs) at
$5.00 per MH. During the month, the actual total variable manufacturing overhead was
$22,540 and the actual level of activity for the period was 4,600 MHs. What was the
variable overhead rate variance for the month?
85.
Merle Corporation applies manufacturing overhead to products on the basis of standard
machine-hours. For the most recent month, the company based its budget on 4,000
machine-hours. Budgeted and actual overhead costs for the month appear below:
Original Budget
Based on 4,000
Machine-Hours
Actual Costs
Variable overhead costs:
Supplies
$14,000
$13,150
Indirect labor
27,200
24,390
Fixed overhead costs:
Supervision
19,900
19,540
Utilities
4,700
4,360
Factory depreciation
8,800
8,620
Total overhead cost
$74,600
$70,060
The company actually worked 3,690 machine-hours during the month. The standard hours
allowed for the actual output were 3,620 machine-hours for the month. What was the
overall variable overhead efficiency variance for the month?
86.
Machain Corporation applies manufacturing overhead to products on the basis of standard
machine-hours. The company’s standard variable manufacturing overhead rate is $2.90
per machine-hour. The actual variable manufacturing overhead cost for the month was
$15,270. The original budget for the month was based on 5,000 machine-hours. The
company actually worked 5,090 machine-hours during the month. The standard hours
allowed for the actual output of the month totaled 5,200 machine-hours. What was the
variable overhead efficiency variance for the month?
87.
Sperazza Corporation produces large commercial doors for warehouses and other
facilities. In the most recent month, the company budgeted production of 4,900 doors.
Actual production was 5,300 doors. According to standards, each door requires 6.4
machine-hours. The actual machine-hours for the month were 34,340 machine-hours. The
standard supplies cost is $3.10 per machine-hour. The actual supplies cost for the month
was $99,331. Supplies cost is an element of variable manufacturing overhead. The variable
overhead efficiency variance for supplies cost is:
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88.
Hien Inc., uses machine-hours as the base to apply its manufacturing overhead. The
following information relates to variable manufacturing overhead standards at Hien:
Standard rate per machine-hour: $50
Total standard machine-hours allowed for units produced during September: 4,000
Hien’s variable overhead rate variance for September was $800 favorable. Its variable
overhead efficiency variance was $3,600 unfavorable. How many machine-hours did Hien
actually use during September?
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89.
Schley Corporation applies manufacturing overhead to products on the basis of standard
machine-hours. Budgeted and actual overhead costs for the most recent month appear
below:
Original Budget
Actual Costs
Variable overhead costs:
Supplies
$3,840
$4,730
Indirect labor
22,400
25,260
Total variable manufacturing overhead cost
$26,240
$29,990
The original budget was based on 3,200 machine-hours. The company actually worked
3,510 machine-hours during the month and the standard hours allowed for the actual
output were 3,660 machine-hours. What was the overall variable overhead efficiency
variance for the month?
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90.
Suski Corporation has a standard cost system in which it applies manufacturing overhead
to products on the basis of standard machine-hours (MHs). The company has provided
the following data for the most recent month:
Budgeted level of
activity
7,400
MHs
Actual level of activity
7,500
MHs
Standard variable
manufacturing
overhead rate
$5.90
per
MH
Actual total variable
manufacturing
overhead
$42,750
What was the variable overhead rate variance for the month?
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91.
The following data have been provided by Gerlach Corporation, a company that produces
forklift trucks:
Budgeted
production
1,900
trucks
Standard
machine-hours
per truck
8.6
machine-
hours
Standard supplies
cost
$4.20
per
machine-
hour
Actual production
2,000
trucks
Actual machine-
hours
16,970
machine-
hours
Actual supplies
cost (total)
$78,137
Supplies cost is an element of variable manufacturing overhead. The variable overhead
efficiency variance for supplies cost is:
92.
The following standards for variable manufacturing overhead have been established for a
company that makes only one product:
Standard hours per unit
of output
5.6
hours
Standard variable
overhead rate
$12.00
per
hour
The following data pertain to operations for the last month:
Actual hours
2,600
hours
Actual total variable
manufacturing overhead
cost
$31,330
Actual output
400
units
What is the variable overhead rate variance for the month?
93.
At Cady Corporation, maintenance is a variable overhead cost that is based on machine-
hours. The performance report for June showed that actual maintenance costs totaled
$9,600 and that the associated rate variance was $400 unfavorable. If 8,000 machine-
hours were actually worked during June, the standard maintenance cost per machine-hour
was:
94.
Ruetz Clinic uses client-visits as its measure of activity. During November, the clinic
budgeted for 2,500 client-visits, but its actual level of activity was 2,520 client-visits. The
clinic has provided the following data concerning the formulas to be used in its budgeting:
Fixed element
per month
Variable
element per
client-visit
Revenue
–
$44.00
Personnel expenses
$26,200
$12.50
Medical supplies
1,200
8.70
Occupancy expenses
8,200
1.20
Administrative expenses
4,700
0.30
Total expenses
$40,300
$22.70
The medical supplies in the flexible budget for November would be closest to:
95.
Ruetz Clinic uses client-visits as its measure of activity. During November, the clinic
budgeted for 2,500 client-visits, but its actual level of activity was 2,520 client-visits. The
clinic has provided the following data concerning the formulas to be used in its budgeting:
Fixed
element
per
month
Variable
element per
client-visit
Revenue
−
$44.00
Personnel expenses
$26,200
$12.50
Medical supplies
1,200
8.70
Occupancy expenses
8,200
1.20
Administrative
expenses
4,700
0.30
Total expenses
$40,300
$22.70
The occupancy expenses in the flexible budget for November would be closest to:
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8-515
96.
Ruetz Clinic uses client-visits as its measure of activity. During November, the clinic
budgeted for 2,500 client-visits, but its actual level of activity was 2,520 client-visits. The
clinic has provided the following data concerning the formulas to be used in its budgeting:
Fixed
element
per
month
Variable
element per
client-visit
Revenue
−
$44.00
Personnel expenses
$26,200
$12.50
Medical supplies
1,200
8.70
Occupancy expenses
8,200
1.20
Administrative
expenses
4,700
0.30
Total expenses
$40,300
$22.70
Revenue per client-visit
Contribution margin per
client-visit
The net operating income in the flexible budget for November would be closest to:
8-516
8-517
97.
Vanderhyde Kennel uses tenant-days as its measure of activity; an animal housed in the
kennel for one day is counted as one tenant-day. During May, the kennel budgeted for
3,300 tenant-days, but its actual level of activity was 3,340 tenant-days. The kennel has
provided the following data concerning the formulas used in its budgeting and its actual
results for May:
Data used in budgeting:
Fixed
element
per
month
Variable
element
per
tenant-
day
Revenue
−
$36.00
Wages and
salaries
$3,500
$7.20
Food and
supplies
1,500
13.30
Facility expenses
9,500
4.70
Administrative
expenses
6,800
0.40
Total expenses
$21,300
$25.60
Actual results for May:
Revenue
$124,830
Wages and salaries
$28,818
Foods and supplies
$44,652
Facility expenses
$24,218
Administrative expenses
$7,886
The wages and salaries in the planning budget for May would be closest to:
8-518
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98.
Vanderhyde Kennel uses tenant-days as its measure of activity; an animal housed in the
kennel for one day is counted as one tenant-day. During May, the kennel budgeted for
3,300 tenant-days, but its actual level of activity was 3,340 tenant-days. The kennel has
provided the following data concerning the formulas used in its budgeting and its actual
results for May:
Data used in budgeting:
Fixed
element
per
month
Variable
element
per
tenant-
day
Revenue
−
$36.00
Wages and
salaries
$3,500
$7.20
Food and
supplies
1,500
13.30
Facility expenses
9,500
4.70
Administrative
expenses
6,800
0.40
Total expenses
$21,300
$25.60
Actual results for May:
Revenue
$124,830
Wages and salaries
$28,818
Foods and supplies
$44,652
Facility expenses
$24,218
Administrative expenses
$7,886
The administrative expenses in the planning budget for May would be closest to:
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