Reference no: EM133176859
Question 1 - Sucher Company uses a standard cost system in which manufacturing overhead costs are applied to units of product on the basis of machine hours. The company's condensed flexible budget for manufacturing overhead is given below:
|
|
Per Machine Hour
|
Machine Hours
|
|
|
|
20,000
|
25,000
|
30,000
|
|
Variable overhead costs
|
$3
|
$60,000
|
$75,000
|
$90,000
|
|
Fixed overhead costs
|
|
300,000
|
300,000
|
300,000
|
|
Total overhead costs
|
|
$360,000
|
$375,000
|
$390,000
|
The denominator level of activity is 30,000 machine hours. Standards call for 2.5 machine hours per unit of output. Actual activity and manufacturing overhead costs for the year are given below:
|
Units produced
|
12,800 units
|
|
Machine hours used
|
31,600 machine hours
|
|
Overhead costs incurred:
|
|
|
Variable costs
|
$96,000
|
|
Fixed costs
|
$297,000
|
Required -
a) What are the standard hours allowed for the output?
b) What was the variable overhead spending variance?
c) What was the variable overhead efficiency variance?
d) What was the fixed overhead budget variance?
e) What was the fixed overhead volume variance?
Question 2 - Accola Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 1,100 units and of Product B is 700 units. The direct production costs (material and labour) for Product A are $110,600 and for B is $70,000. There are three activity cost pools for overhead, with estimated costs and expected activity as follows:
|
|
Expected Activity
|
|
Activity Cost Pool
|
Estimated Cost
|
Product A
|
Product B
|
Total
|
|
Activity 1
|
$18,270
|
600
|
500
|
1,100
|
|
Activity 2
|
35,891
|
1,600
|
300
|
1,900
|
|
Activity 3
|
48,796
|
440
|
420
|
860
|
The overhead cost per unit of Product A is closest to which of the following?
Question 3 - Capacity analysis is most affected by the presence of variable costs, NOT fixed costs.
True
False
Question 4 - If the standard hours allowed for the actual output of the period is greater than the denominator level of activity (in hours), then the fixed overhead budget variance will be unfavorable.
True
False