Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Chapter 11 - Flexible Budgets and Overhead Analysis
1. A static budget compares actual cost with budgeted costs.
a.
True
b.
False
2. Static budgets are the best benchmarks for preparing a performance report.
a.
True
b.
False
3. Before-the-fact flexible budgets give expected outcomes for a range of activity levels.
a.
True
b.
False
4. An after-the-fact flexible budget allows managers to generate financial results from a number of potential scenarios.
a.
True
b.
False
5. A static budget is a budget for a particular level of activity.
a.
True
b.
False
6. When overhead is applied on the basis of direct labor hours, the variable overhead efficiency variance always has the
same sign as the labor efficiency variance.
a.
True
b.
False
7. The variable overhead spending variance is conceptually identical to the price variances of materials and labor.
a.
True
b.
False
8. The variable overhead variance is affected by input price changes only.
a.
True
b.
False
9. Price changes of variable overhead items are easily controlled by production supervisors.
Chapter 11 - Flexible Budgets and Overhead Analysis
a.
True
b.
False
10. Responsibility for variable overhead spending and efficiency variances is generally assigned to production
departments.
a.
True
b.
False
11. Practical capacity is always used to calculate fixed overhead rates
a.
True
b.
False
12. Fixed overhead costs are resources acquired as used and needed.
a.
True
b.
False
13. The fixed overhead spending variance is affected primarily by changes in production levels.
a.
True
b.
False
14. The volume variance is often interpreted as a measure of capacity utilization.
a.
True
b.
False
15. Although general responsibility for the volume variance is usually assigned to the purchasing department,
responsibility on occasion may be assigned to the production department.
a.
True
b.
False
16. An activity-based budgetary approach can be used to emphasize cost reduction and process management.
a.
True
b.
False
17. Activity-based budgeting focuses on estimating the costs of activities rather than the costs of departments and plants.
a.
True
b.
False
Chapter 11 - Flexible Budgets and Overhead Analysis
18. Activity-based budgeting builds a budget for each activity based on the resources needed to provide the required
activity output levels.
a.
True
b.
False
19. Activity-based budgeting supports continuous improvement and process management.
a.
True
b.
False
20. Activity flexible budgeting is the prediction of what activity costs will be as related output changes.
a.
True
b.
False
21. Because activities are what consume resources, activity-based budgeting may prove to be a much more powerful
planning and control tool than the traditional approach.
a.
True
b.
False
22. An activity-based budgetary approach can be used to emphasize cost increases through the reduction of wasteful
activities and improving the efficiency of necessary activities.
a.
True
b.
False
23. The first step of building an activity-based budget is to identify the activities within an organization.
a.
True
b.
False
24. For a static activity budget in a company already using an ABC or ABM system, the activities within the organization
must be identified.
a.
True
b.
False
25. Activity-based budgeting classifies costs as variable or fixed with respect to the activity output measure.
a.
True
Chapter 11 - Flexible Budgets and Overhead Analysis
b.
False
26. In an activity framework, controlling costs is equivalent to managing activities.
a.
True
b.
False
27. Activity flexible budgeting is the prediction of what activity costs will be as production output changes.
a.
True
b.
False
28. An activity-based budgeting system may help support continuous improvement and process management.
a.
True
b.
False
29. A _____________________ compares actual costs with budgeted costs.
30. A _______________ is a budget created in advance that is based on a particular level of activity.
31. A _________________ enables a firm to compute expected costs for a range of activity levels.
32. Budgeted costs change because total variable costs go up as output increases, therefore flexible budgets are sometimes
referred to as _______________.
33. A difference between the actual amount and the flexible budget amount is known as the ____________________.
34. The ____________________ budget gives expected outcomes for a range of activity levels.
35. The ________________ budget is based on the actual level of activity.
Chapter 11 - Flexible Budgets and Overhead Analysis
36. Often, the flexible budget formulas are based on ________________ instead of units.
37. The _____________________ measures the aggregate effect of differences between the actual variable overhead rate
and the standard variable overhead rate.
38. The ________________________ measures the change in the actual variable overhead cost that occurs because of
efficient (or inefficient) use of direct labor
39. _______________________ is the difference between the actual variable overhead and applied variable overhead.
40. ______________________ is a prerequisite for assigning responsibility.
41. The variable overhead efficiency variance is directly related to the __________________ or usage variance.
42. The _____________________ is the difference between actual fixed overhead and applied fixed overhead.
43. The ______________________ is the difference between the actual fixed overhead and the budgeted fixed overhead.
44. The ____________________ is the difference between budgeted fixed overhead and applied fixed overhead.
45. _________________ are capacity costs acquired in advance of usage.
46. The _________________________ focuses on the estimation of the costs of activities rather than the costs of
departments and plants.
47. Activity-based budgeting begins with the _____________ and _______________ budgets.
48. _______________________ is the prediction of what activity costs will be as related output changes.
49. A static budget
a.
is considered a good choice for benchmarks in preparing a performance report.
b.
computes expected costs for a range of activity levels.
c.
compares actual costs with budgeted costs.
d.
is prepared for a particular level of activity.
Chapter 11 - Flexible Budgets and Overhead Analysis
e.
None of these are correct.
50. Which budget should be used to determine managerial effectiveness?
a.
before-the-fact flexible budget
b.
after-the-fact flexible budget
c.
static budget
d.
financial budget
e.
cash budget
51. Which budget is used to assess managerial efficiency?
a.
sales budget
b.
production budget
c.
static budget
d.
flexible budget
e.
cash budget
52. A budget that allows the determination of expected costs for various levels of activity is a(n)
a.
operational budget.
b.
sales budget.
c.
production budget.
d.
financial budget.
e.
flexible budget.
53. To create a meaningful performance report,
a.
actual costs are compared with the expected costs found in the static budget.
b.
actual costs are calculated as a percentage of sales.
c.
actual costs are compared with the prior year's actual costs.
d.
expected costs of the static budget are compared with the expected costs of the flexible budget.
e.
actual costs are compared with the expected costs at the same level of activity.
54. A before-the-fact flexible budget
a.
calculates expected costs for various levels of activity.
b.
allows managers to deal with uncertainty.
c.
can be used to generate results for a number of plausible scenarios.
d.
is a useful planning tool.
e.
All of these.
55. An after-the-fact flexible budget
a.
is a budget for the actual level of activity.
Chapter 11 - Flexible Budgets and Overhead Analysis
b.
is used for performance reports.
c.
calculates what costs should have been for the actual level of activity.
d.
is used to compare expected costs with actual costs.
e.
All of these.
56. A budget prepared for a particular level of activity is a(n)
a.
operational budget.
b.
ABB budget.
c.
static budget.
d.
flexible budget.
e.
variable budget.
57. A static budget is best used to
a.
measure whether or not a manager accomplishes his or her goals.
b.
compare expected costs at the actual level of activity with the actual costs.
c.
assess how well costs were controlled during the year.
d.
determine managerial efficiency.
e.
None of these.
58. Assume that the expectations on the static budget were met. We can conclude that
a.
the static budget was ill conceived.
b.
the effectiveness of the manager is not in question.
c.
the manager is very efficient.
d.
there is no need for a flexible budget.
e.
None of these.
59. A performance report
a.
always uses static budgets.
b.
compares actual costs with budgeted costs.
c.
uses a static or a flexible budget.
d.
both compares actual costs with budgeted costs and always uses static budget.
e.
always uses static budgets and usually uses flexible budgets.
60. Flexible budgets are powerful control tools because
a.
they allow managers to deal with uncertainty.
b.
they allow the calculation of what cost should be for the actual level of activity.
c.
they allow the preparation of meaningful performance reports.
d.
they help measure managerial efficiency.
e.
All of these.
Chapter 11 - Flexible Budgets and Overhead Analysis
61. The variable overhead spending variance measures the aggregate effect of differences between the
a.
the total variable overhead and the applied variable overhead.
b.
the total variable overhead and total budgeted overhead costs.
c.
the total variable overhead and the budgeted overhead for the expected activity.
d.
the actual variable overhead rate and the standard variable overhead rate.
e.
None of these.
Figure 11-1.
Jason, Inc. produces leather purses. Jason has developed a static budget for the first quarter, based on 20,000 direct labor
hours. During the quarter, the actual activity was 22,000 direct labor hours. Data for the first quarter are summarized as
follows:
Static budget
(20,000 hours)
Actual costs
(22,000 hours)
Direct materials cost
$ 80,000
$ 87,000
Direct labor cost
160,000
174,000
Building rental
48,000
50,000
Total
$288,000
$311,000
62. Refer to Figure 11-1. Comparing the static budget to the actual outcomes, we can say the following:
a.
the manager had more direct labor hours.
b.
the variances are all unfavorable.
c.
the comparison is not useful for assessing managerial efficiency.
d.
a flexible budget should be used for assessing efficiency.
e.
All of these.
63. Refer to Figure 11-1. What is the flexible budget amount for the first quarter?
a.
$288,000
b.
$311,000
c.
$312,000
d.
$261,000
e.
Cannot be determined.
Chapter 11 - Flexible Budgets and Overhead Analysis
64. Refer to Figure 11-1. What is the flexible budget variance for the first quarter?
a.
$1,000 U
b.
$23,000 U
c.
$23,000 F
d.
$1,000 F
e.
None of these.
Figure 11-2.
Lawson, Inc. produces plastic grocery bags. Lawson has developed a static budget for the month of July based on 8,000
direct labor hours. During the quarter, the actual activity was 9,000 direct labor hours. Data for July are summarized as
follows:
Static budget
(8,000 hours)
Actual costs
(9,000 hours)
Direct materials cost
$ 96,000
$118,000
Power
40,000
47,000
Salary of plant supervisor
6,000
6,000
Total
$142,000
$171,000
65. Refer to Figure 11-2. Comparing the static budget to the actual costs, we can conclude that
a.
the manager spent more than should have been spent.
b.
immediate action is needed to reduce costs.
c.
the plant manager was clearly not efficient.
d.
the plant manager should be dismissed.
e.
None of these.
66. Refer to Figure 11-2. What is the flexible budget for July?
a.
$142,000
b.
$159,000
c.
$171,000
d.
$165,000
e.
None of these.
Chapter 11 - Flexible Budgets and Overhead Analysis
67. Refer to Figure 11-2. What is the flexible budget variance for July?
a.
$12,000 U
b.
$12,000 F
c.
$29,000 U
d.
$29,000 F
e.
None of these.
Figure 11-3.
Montgomery Company has developed the following flexible budget formulas for its four overhead items:
Variable rate
per
Overhead item
Fixed Cost
direct labor
hour
Maintenance
$10,000
$3.00
Power
$1,500
$0.30
Indirect labor cost
$12.00
Equipment lease
$7,000
Total
$18,500
$15.30
Montgomery normally produces 15,000 units (each unit requires 0.30 direct labor hours); however this year 19,000 units
were produced with the following actual costs:
Overhead item
Actual costs
Maintenance
$14,000
Power
$2,200
Indirect labor cost
$70,000
Equipment lease
$7,000
Total costs
$93,200
68. Refer to Figure 11-3. The total budgeted overhead for an expected activity level of 10,000 units is
a.
$139,400.
b.
$64,400.
c.
$124,000.
d.
$12,400.
e.
None of these.
Chapter 11 - Flexible Budgets and Overhead Analysis
69. Refer to Figure 11-3. Calculate the after-the-fact budget for the actual level of activity.
a.
$91,600
b.
$115,000
c.
$118,600
d.
$77,400
e.
None of these.
70. Refer to Figure 11-3. Calculate the variance for maintenance using an after-the-fact flexible budget.
a.
$13,000 U
b.
$13,100 F
c.
$11,000 U
d.
$1,000 F
e.
None of these.
71. Refer to Figure 11-3. Using an after-the-fact flexible budget, calculate the variance for power.
a.
$1,000 F
b.
$1,010 U
c.
$3,000 U
d.
$1,010 F
e.
None of these.
72. Refer to Figure 11-3. Using an after-the-fact flexible budget, calculate the total budget variance.
a.
$12,510 U
b.
$3,600 U
c.
$5,000 F
d.
$12,510 F
e.
None of these.
73. The total variable overhead variance is the difference between
a.
the actual overhead and the budgeted overhead.
b.
the total actual variable overhead and the total budgeted variable overhead.
c.
the total actual variable overhead and the total applied variable overhead.
Chapter 11 - Flexible Budgets and Overhead Analysis
d.
the total actual variable overhead and the total applied overhead.
e.
None of these.
74. In a standard cost system, variable overhead is applied
a.
using actual direct labor hours.
b.
using budgeted indirect labor hours.
c.
using direct labor hours at practical capacity.
d.
using standard direct labor hours.
e.
All of these.
75. The formula for the variable overhead spending variance can be expressed as follows:
a.
(AH − SH) × SVOR.
b.
(AVOR − SVOR) × SH.
c.
(AVOR − SVOR) × AH.
d.
(AH − SH) × AVOR.
e.
None of these.
76. The variable overhead efficiency variance claims to measure
a.
changes in spending efficiency.
b.
productive efficiency.
c.
changes in variable overhead costs because of the efficient (inefficient) use of the cost driver.
d.
changes in variable overhead costs attributable to inefficient purchase of variable inputs.
e.
None of these.
77. The formula for calculating the variable overhead efficiency variance is
a.
(AVOR × AH) − (SVOR × AH).
b.
(AVOR − SVOR) × SH.
c.
(AH − SH) × SVOR.
d.
(AH − SH) × AVOR.
e.
None of these.
78. The two variances for variable overhead are
a.
spending and efficiency variances.
b.
spending and budget variances.
c.
budget and volume variances.
d.
spending and volume variances.
e.
volume and efficiency variances.
79. Inefficient usage of labor implies a(n)
Chapter 11 - Flexible Budgets and Overhead Analysis
a.
unfavorable variable overhead efficiency variance and an unfavorable variable overhead spending variance.
b.
favorable variable overhead efficiency variance.
c.
unfavorable variable overhead spending variance.
d.
favorable variable overhead spending variance.
e.
unfavorable variable overhead efficiency variance.
80. Responsibility for the variable overhead spending variance is usually assigned to
a.
the purchasing department.
b.
the production department.
c.
the engineering department.
d.
the personnel department.
e.
None of these.
81. A performance report for variable overhead reveals
a.
the aggregate variable overhead spending and efficiency variances.
b.
the volume and spending variances.
c.
the spending and efficiency variances for each variable overhead item.
d.
both the aggregate variable overhead spending and efficiency variances and the spending and efficiency
variances for each variable overhead item.
e.
both the volume and spending variances and the spending and efficiency variances for each variable overhead
item.
82. Markus, Inc. produces a specialized machine part used in forklifts. For last year's operations, the following data were
gathered:
Units produced:
55,000
Direct labor:
29,000 hours @ $9.00
Actual variable overhead:
$135,000
Markus employs a standard costing system. During the year, a variable overhead rate of $5.00 was used. The labor
standard requires 0.50 hours per unit produced. The variable overhead spending and efficiency variances are, respectively
a.
$10,000 U and $7,500 U.
b.
$10,000 F and $7,500 U.
c.
$7,500 U and $10,000 F.
d.
$10,000 F and $7,500 F.
e.
None of these.
83. Shorts, Inc. produces small engines. For last year's operations, the following data were gathered:
Units produced:
100,000
Direct labor:
160,000 hours @ $12.00
Actual variable overhead:
$1,300,000
Chapter 11 - Flexible Budgets and Overhead Analysis
Shorts, Inc. employs a standard costing system. During the year, a variable overhead rate of $8.00 was used. The labor
standard requires 1.5 hours per unit produced. The variable overhead spending and efficiency variances are, respectively
a.
$100,000 U and $20,000 U.
b.
$100,000 U and $20,000 F.
c.
$20,000 U and $80,000 U.
d.
$20,000 U and $80,000 F.
e.
None of these.
84. During the year, Hawkings produced 10,000 units, used 20,000 direct labor hours, and incurred variable overhead of
$90,000. Budgeted variable overhead for the year was $88,000. The hours allowed per unit are 2.1. The standard variable
overhead rate is $4.00 per direct labor hour. The variable overhead spending variance is
a.
$2,000 F.
b.
$6,000 U.
c.
$10,000 U.
d.
$2,000 U.
e.
None of these.
85. Budgeted variable overhead for the year is $120,000. Expected activity is 20,000 standard direct labor hours. The
actual hours worked were 18,000 and the standard hours allowed for actual production were 19,500. The variable
overhead efficiency variance is
a.
$0.
b.
$12,000 F.
c.
$3,000 F.
d.
$9,000 F.
e.
None of these.
86. Folson Company is planning to produce 4,250,000 speakers for the coming year. Actual production was 4,000,000
speakers. Each speaker requires 0.80 direct labor hours per unit. Predetermined overhead rates are calculated using
expected production, measured in direct labor hours. The budgeted variable overhead for the coming year is $680,000.
The actual variable overhead incurred was $714,000. The applied variable overhead for the year is
a.
$800,000.
b.
$714,000.
c.
$640,000.
d.
$680,000.
e.
None of these.
Chapter 11 - Flexible Budgets and Overhead Analysis
87. Harry Company's standard variable overhead rate is $6.00 per direct labor hour, and each unit requires 2 standard
direct labor hours. During March, Harry recorded 6,000 actual direct labor hours, $37,000 actual variable overhead costs,
and 2,900 units of product manufactured.
What is the total variable overhead variance for March for Harry?
a.
$1,200 U
b.
$600 U
c.
$1,000 U
d.
$2,200 U
88. An unfavorable variable overhead spending variance may be caused by
a.
the use of excessive quantities of variable overhead items.
b.
the payment of lower prices for variable overhead items used.
c.
the use of excessive quantities of the variable overhead allocation base.
d.
both the use of excessive quantities of variable overhead items and the payment of lower prices for variable
overhead items used.
89. Gina Production Company uses a standard costing system. The following information pertains to 2011.
Actual factory overhead costs ($16,500 is fixed)
$ 40,125
Actual direct labor costs (11,250 hours)
$131,625
Standard direct labor for 5,500 units:
Standard hours allowed
11,000 hours
Labor rate
$12.00
The factory overhead rate is based on an activity level of 10,000 hours. Standard cost data for 5,000 units is as follows:
Variable factory overhead
$22,500
Fixed factory overhead
13,500
Total factory overhead
$36,000
What is the variable overhead efficiency variance for Gina Production Company?
a.
$562.50 F
b.
$3,000.00 U
c.
$562.50 U
d.
$1,687.50 F
90. If variable manufacturing overhead is applied based on direct labor hours and there is an unfavorable direct labor
efficiency variance
a.
the direct materials usage variance will be unfavorable.
b.
the direct labor rate variance will be favorable.
Chapter 11 - Flexible Budgets and Overhead Analysis
c.
the variable manufacturing overhead efficiency variance will be unfavorable.
d.
the variable manufacturing overhead spending variance will be unfavorable.
91. Griffen Corporation uses a standard costing system. Information for the month of May is as follows:
Actual manufacturing overhead costs ($26,000 is fixed)
$80,000
Direct labor:
Actual hours worked
12,000 hrs.
Standard hours allowed for actual production
10,000 hrs.
Average actual labor cost per hour
$18.00
The factory overhead rate is based on a normal volume of 12,000 direct labor hours. Standard cost data at 12,000 direct
labor hours were as follows:
Variable factory overhead
$48,000
Fixed factory overhead
24,000
Total factory overhead
$72,000
What is the variable overhead efficiency variance for Griffen?
a.
$2,000 U
b.
$8,000 U
c.
$4,000 U
d.
$20,000 U
Figure 11-4.
Kris Company calculates its predetermined rates using practical volume, which is 325,000 units. The standard cost system
allows 3 direct labor hours per unit produced. Overhead is applied using direct labor hours. The total budgeted overhead is
$4,260,000, of which $994,000 is fixed overhead. The actual results for the year are as follows:
Units produced:
318,000
Direct labor:
965,000 hours @
$12.00/hour
Variable overhead:
$3,302,000
Fixed overhead:
$998,000
92. Refer to Figure 11-4. The predetermined variable overhead rate is
a.
$3.00 per direct labor hour.
b.
$2.50 per direct labor hour.
c.
$5.50 per direct labor hour.
d.
$3.35 per direct labor hour.
e.
None of these are correct.
93. Refer to Figure 11-4. Calculate the variable overhead spending variance.
a.
$69,250 U
Chapter 11 - Flexible Budgets and Overhead Analysis
b.
$69,250 F
c.
$24,000 U
d.
$40,000 F
e.
None of these.
94. Refer to Figure 11-4. Calculate the variable overhead efficiency variance.
a.
$36,850 U
b.
$80,000 U
c.
$36,850 F
d.
$4,000 U
e.
None of these.
95. Refer to Figure 11-4. The predetermined fixed overhead rate is
a.
$3.35 per direct labor hour.
b.
$1.02 per direct labor hour.
c.
$5.50 per direct labor hour.
d.
$4.00 per direct labor hour.
e.
None of these.
96. Refer to Figure 11-4. Calculate the applied fixed overhead.
a.
$973,080
b.
$855,030
c.
$964,000
d.
$910,000
e.
None of these.
97. Refer to Figure 11-4. Calculate the fixed overhead spending variance.
a.
$32,000 F
b.
$0
c.
$4,000 U
d.
$12,000 U
e.
$4,000 F
Chapter 11 - Flexible Budgets and Overhead Analysis
98. Refer to Figure 11-4. Calculate the fixed overhead volume variance.
a.
$32,000 U
b.
$20,000 F
c.
$22,000 F
d.
$4,000 U
e.
None of these.
99. The standard fixed overhead rate is often calculated as
a.
budgeted fixed overhead divided by practical capacity measured in standard hours.
b.
actual fixed overhead divided by practical capacity measured in standard hours.
c.
budgeted fixed overhead divided by actual hours.
d.
budgeted fixed overhead divided by practical capacity measured in actual hours.
e.
None of these.
100. The total fixed overhead variance is calculated by the following formula:
a.
Total actual overhead − Total applied overhead
b.
AFOH − Standard overhead rate × SH
c.
AFOH − (SFOR × SH)
d.
AFOH − (SFOR × AH)
e.
(Total actual overhead − SFOR) × SH
101. The two variances for fixed overhead are
a.
budget and volume.
b.
spending and budget.
c.
volume and spending.
d.
efficiency and volume.
e.
volume and efficiency.
102. The formula for the fixed overhead volume variance is
a.
(AFOH − SFOR) × SH.
b.
(AFOH − SFOR) × AH.
c.
AFOH − BFOH.
d.
(AFOH − SFOR) × SH.
e.
None of these.
103. The formula for the fixed overhead spending variance is
a.
(AFOH − SFOR) × SH
b.
(AFOH − SFOR) × AH
c.
AFOH − BFOH
Chapter 11 - Flexible Budgets and Overhead Analysis
d.
(AFOH − SFOR) × SH
e.
None of these.
104. The fixed overhead volume variance is a measure of
a.
the cost of overspending on fixed overhead items.
b.
the effect of the actual output differing from the output used to calculate the predetermined fixed overhead
rate.
c.
the cost of unused activity capacity acquired.
d.
both the cost of overspending on fixed overhead items and the effect of the actual output differing from the
output used to calculate predetermined fixed overhead rate.
e.
both the effect of the actual output differing from the output used to calculate the predetermined fixed
overhead rate and the cost of unused activity capacity.
105. The fixed overhead spending variance
a.
is usually not significant.
b.
is made up of many individual items.
c.
is the difference between actual costs and budgeted costs.
d.
merits investigation only if the variance is material.
e.
All of these.
106. Responsibility for the fixed overhead volume variance is
a.
not assigned because fixed overhead costs do not change with activity changes.
b.
usually assigned to the production department.
c.
usually assigned to top management.
d.
usually assigned to the planning department.
e.
None of these.
107. Because fixed overhead is made up of many items
a.
the fixed overhead spending variance is not meaningful.
b.
it is not possible to calculate a fixed overhead volume variance.
c.
the fixed overhead volume variance will always be unfavorable.
d.
a line by line comparison of budgeted costs with actual costs provides more information.
e.
All of these.
108. Which of the following relationships is valid concerning fixed overhead budgeted at the beginning of the year?
a.
BFOH = SFOR × AH
b.
BFOH = SFOR × SH for actual production
c.
BFOH = SFOR × SH for planned production
d.
BFOH = SFOR / SH for actual production
e.
None of these.
Chapter 11 - Flexible Budgets and Overhead Analysis
109. The total fixed overhead variance is
a.
actual fixed overhead − applied fixed overhead.
b.
the sum of the spending and volume variances.
c.
the sum of the spending and efficiency variances.
d.
both actual fixed overhead − applied fixed overhead and the sum of the spending and efficiency variances.
e.
both actual fixed overhead − applied fixed overhead and the sum of the spending and volume variances.
110. If actual fixed overhead was $98,400 and there was a $2,880 favorable spending variance and a $600 unfavorable
volume variance, budgeted fixed overhead must have been
a.
$101,280.
b.
$100,680.
c.
$99,000.
d.
$97,800.
e.
$95,520.
111. Fixed overhead was budgeted at $84,000 and 10,000 direct labor hours were budgeted. If the fixed overhead volume
variance was $3,200 unfavorable and the fixed overhead spending variance was $1,200 favorable, fixed overhead applied
must be
a.
$85,200.
b.
$80,800.
c.
$82,800.
d.
$82,000.
e.
$87,200.
112. Crawford Company's standard fixed overhead cost is $6 per direct labor hour based on budgeted fixed costs of
$600,000. The standard allows one direct labor hour per unit. Last year, Crawford produced 110,000 units of product,
incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labor.
What is Crawford's fixed overhead spending variance for last year?
a.
$60,000 F
b.
$24,000 F
c.
$36,000 U
d.
$30,000 U
113. Griffen Corporation uses a standard costing system. Information for the month of May is as follows:
Actual manufacturing overhead costs ($26,000 is fixed)
$80,000
