Chapter 10 Appendix A Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System
10A–59
88. If the denominator level of activity is 6,900 machine-hours, the fixed element in the
predetermined overhead rate would be:
89. If the denominator level of activity is 7,000 machine-hours, the predetermined overhead
rate would be:
Seroka Corporation estimates that its variable manufacturing overhead is $6.90 per machine-
hour and its fixed manufacturing overhead is $745,290 per period.
Chapter 10 Appendix A Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System
90. If the denominator level of activity is 9,000 machine-hours, the variable element in the
predetermined overhead rate would be:
91. If the denominator level of activity is 9,000 machine-hours, the fixed element in the
predetermined overhead rate would be:
Chapter 10 Appendix A Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System
10A–61
92. If the denominator level of activity is 9,100 machine-hours, the predetermined overhead
rate would be:
An outdoor barbecue grill manufacturer has a standard costing system based on standard
direct labor-hours (DLHs) as the measure of activity. Data from the company’s flexible budget
for manufacturing overhead are given below:
The following data pertain to operations for the most recent period:
Chapter 10 Appendix A Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System
93. What was the fixed manufacturing overhead budget variance for the period to the nearest
dollar?
94. What was the fixed manufacturing overhead volume variance for the period to the nearest
dollar?
Chapter 10 Appendix A Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System
Buell Corporation has provided the following data for June.
95. The budget variance for June is:
Chapter 10 Appendix A Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System
10A–64
96. The volume variance for June is:
The following data for April has been provided by Mittler Corporation.
Chapter 10 Appendix A Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System
10A–65
97. The budget variance for April is:
98. The volume variance for April is:
Essay Questions
Chapter 10 Appendix A Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System
10A–66
99. The Clayton Company uses a standard cost system in which manufacturing overhead costs
are applied to units of the company’s single product on the basis of standard direct labor-hours
(DLHs). The standard cost card for the product follows:
The following data pertain to last year’s activities:
Required:
a. Compute the direct materials price and quantity variances for the year.
b. Compute the direct labor rate and efficiency variances for the year.
c. Compute the variable overhead rate and efficiency variances for the year.
d. Compute the fixed manufacturing overhead budget and volume variances for the year.
Chapter 10 Appendix A Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System
Chapter 10 Appendix A Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System
100. Mountain Manufacturing uses a standard cost system in which manufacturing overhead
is applied to units of product on the basis of standard machine-hours. At standard, each unit of
product requires one machine-hour to complete. The standard variable overhead is $1.75 per
machine-hour and Budgeted Fixed Manufacturing Costs are $300,000 per year. The
denominator level of activity is 150,000 machine-hours, or 150,000 units. Actual data for the
year were as follows:
Required:
a. What are the predetermined variable and fixed manufacturing overhead rates for the year?
b. Compute the variable overhead rate and efficiency variances for the year.
c. Compute the fixed manufacturing overhead budget and volume variances for the year.
Chapter 10 Appendix A Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System
10A–69
101. Walkenhorst Corporation’s manufacturing overhead includes $7.80 per machine-hour for
supplies; $7.30 per machine-hour for indirect labor; $21,210 per period for salaries; and
$19,950 per period for depreciation.
Required:
Determine the predetermined overhead rate if the denominator level of activity is 1,500
machine-hours. Show your work!
102. Krouse Corporation’s manufacturing overhead includes $14.70 per machine-hour for
variable manufacturing overhead and $191,580 per period for fixed manufacturing overhead.
Required:
Determine the predetermined overhead rate for the denominator level of activity of 3,100
machine-hours.
Chapter 10 Appendix A Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System
10A–70
103. Bahr Corporation has provided the following data for February.
Required:
a. Compute the budget variance for February. Show your work!
b. Compute the volume variance for February. Show your work!
Chapter 10 Appendix A Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System
104. Hereford Corporation has provided the following data for February.
Required:
a. Compute the budget variance for February. Show your work!
b. Compute the volume variance for February. Show your work!
Chapter 10 Appendix A Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System
105. Dull Corporation applies overhead to products based on machine-hours. The
denominator level of activity is 8,600 machine-hours. The budgeted fixed manufacturing
overhead costs are $286,380. In October, the actual fixed manufacturing overhead costs were
$274,330 and the standard machine-hours allowed for the actual output were 8,400 machine-
hours.
Required:
a. Compute the budget variance for October. Show your work!
b. Compute the volume variance for October. Show your work!