51.A company uses a two-variance analysis for overhead variances, controllable and volume. The volume variance is the difference between the factory overhead applied at standard and:
a.Total factory overhead per the flexible budget.
b.Actual factory overhead incurred.
c.Total factory overhead per the master budget.
d.Fixed overhead incurred.
52.The fixed overhead application rate is a function of a predetermined “normal” activity level. If standard hours allowed for good output equal this “normal” activity level for a given period, the volume variance will be:
a.Zero.
b.Favorable.
c.Unfavorable.
d.Either favorable or unfavorable depending on the budgeted overhead.
53.The data below relate to the month of April for Monroe, Inc., which uses a standard cost system and a two-variance analysis of factory overhead:
Actual direct labor hours used16,500
Standard direct labor hours allowed16,250
Actual total factory overhead$53,200
Budgeted fixed factory overhead$12,000
Budgeted activity in hours16,000
Total overhead application rate per standard direct labor hour$3.25
Variable overhead application rate per standard direct labor hour$2.50
What was Monroe's volume variance for April?
a.$187.50 favorable
b.$187.50 unfavorable
c.$437.50 favorable
d.$437.50 unfavorable
54.If a company uses a two-variance analysis for overhead variances and uses a predetermined rate for absorbing manufacturing overhead, the volume variance is the:
a.Underapplied or overapplied variable cost element of overhead.
b.Underapplied or overapplied fixed cost element of overhead.
c.Difference in budgeted costs and actual costs of fixed overhead items.
d.Difference in budgeted costs and actual costs of variable overhead items.
55.Elgin Company's budgeted fixed factory overhead costs are $50,000 per month plus a variable factory overhead rate of $4.00 per direct labor hour. The standard direct labor hours allowed for October production were 20,000. An analysis of the factory overhead indicates that in October, Elgin had an unfavorable budget (controllable) variance of $1,500 and a favorable volume variance of $500. Elgin uses a two-variance analysis of overhead variances.
The applied factory overhead in October is:
a.$129,500.
b.$128,000.
c.$130,000.
d.$130,500.
56.In a two-variance system for analyzing factory overhead, a favorable volume variance could be caused by:
a.The top salesman leaving the company.
b.Receiving more orders than anticipated.
c.A machine breakdown.
d.A work slow-down by workers.
57.Information on Shonda Company's factory overhead costs follows:
Actual variable factory overhead$95,000
Actual fixed factory overhead$28,000
Standard hours allowed for actual production30,000
Standard variable overhead rate per direct labor hour$3.25
Standard fixed overhead rate per direct labor hour$1.00
What is the factory overhead variance?
a.$4,500 unfavorable
b.$4,500 favorable
c.$2,500 unfavorable
d.$2,500 favorable
58.In a four-variance method analyzing factory overhead, the variable factory overhead efficiency variance measures:
a.The effect of differences in the actual variable factory overhead rate and the standard variable factory overhead rate.
b.The difference in the actual hours incurred and standard hours allowed for a given level of production.
c.The difference between actual and applied variable factory overhead.
d.The difference between actual variable factory overhead and budgeted variable factory overhead.
59.The following information pertains to the Braun Company for March:
Standard direct labor hours per unit.5 hours
Budgeted production level20,000 units
Actual units produced22,000 units
Standard variable rate per direct labor hour$2.00
Standard fixed rate per direct labor hour$3.00
Actual direct labor hours worked10,500 hours
Actual direct labor costs$150,000
Actual fixed factory overhead31,800
Actual variable factory overhead22,200
Using the four-variance method of factory overhead variance analysis, what is the spending variance?
a.$1,200 unfavorable
b.$200 unfavorable
c.$1,000 favorable
d.$200 favorable
60.The following information pertains to the Braun Company for March:
Standard direct labor hours per unit.5 hours
Budgeted production level20,000 units
Actual units produced22,000 units
Standard variable rate per direct labor hour$2.00
Standard fixed rate per direct labor hour$3.00
Actual direct labor hours worked10,500 hours
Actual direct labor costs$150,000
Actual fixed factory overhead31,800
Actual variable factory overhead22,200
Using the four-variance method of factory overhead variance analysis, what is the efficiency variance?
a.$1,200 unfavorable
b.$200 unfavorable
c.$1,000 favorable
d.$200 favorable
