Exam

Name___________________________________

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) How is the fixed overhead budget variance calculated?

A) The difference between the standard fixed overhead rate and the actual fixed overhead rate multiplied by
the actual hours used
B) The difference between the actual fixed overhead costs incurred and the budgeted fixed overhead costs
C) The difference between the actual fixed overhead costs incurred and the standard fixed overhead costs
allocated
D) The difference between the standard fixed overhead costs allocated and the budgeted fixed overhead costs

2) Monty Manufacturing builds playground equipment that it sells to elementary schools and municipalities.
Monty's management has contracted you to perform a variance analysis on the fixed manufacturing overhead
for its line of slides. Monty's cost accounting team informs you that it allocates fixed overhead based on machine
hours. This period production was budgeted at 30 slides. Budgeted and actual production data follows:

Standard fixed overhead cost per machine hour $6

Standard machine hours per slide 8

Actual production 390

Actual fixed overhead cost $22,000

What is the fixed manufacturing overhead budget variance in this period?

A) $20,560 unfavorable B) $20,560 favorable
C) $17,280 favorable D) $17,280 unfavorable

3) Nexus Industries uses a standard costing system to apply manufacturing costs to its production process. In May,
Nexus anticipated producing 2200 units with fixed manufacturing overhead costs allocated at $8.40 per direct
labor hour with a standard of 2.5 direct labor hours per unit. In May, actual production was 3100 units and
actual fixed manufacturing overhead costs were $29,000.

What was Nexus' fixed manufacturing overhead volume variance in May?

A) $17,200 favorable B) $18,900 favorable
C) $18,900 unfavorable D) $17,200 unfavorable

4) Which of the following examples may lead directly to a favorable fixed overhead volume variance?
A) Receiving a volume discount on indirect materials purchased
B) A decrease in wages paid to factory maintenance workers
C) A decrease in county property taxes for the factory
D) Producing more units than anticipated

5) The standard variable overhead cost rate for the Gordon Company is $8.25 per unit. Budgeted fixed overhead
cost is $40,000. The company budgeted 5000 units for the current period and actually produced 4500 finished
units. What is the fixed overhead volume variance?

Assume the allocation base for fixed overhead costs is the number of units expected to be produced.
A) $4000 unfavorable B) $2875 favorable C) $4000 favorable D) $2875 unfavorable

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 6) The Perry Corporation recorded the following budgeted and actual information relating to fixed overhead costs
for its Z-Line of products:

Standard fixed overhead per direct labor hour $2.5

Standard direct labor hours per unit 0.25
Budgeted production 2800
Budgeted fixed overhead costs $1750.00

Actual production in units 4400

Actual fixed overhead costs incurred $1200.00

What is Perry's fixed manufacturing overhead budget variance?

A) $550.00 favorable B) $1000.00 unfavorable
C) $550.00 unfavorable D) $1000.00 favorable

7) Network Enterprises incurred actual fixed manufacturing overhead costs of $20,200 for the month of
September. If the fixed manufacturing overhead budget variance was a favorable $6000 what were the
budgeted fixed overhead costs?
A) $26,200 B) $20,200 C) $14,200 D) $6000

8) River Mills manufactures reproduction antique furniture using historic manufacturing methods. River often
uses waterpower, which is not only historically accurate, but also saves energy costs. Although River uses
old-fashioned manufacturing techniques it is still a modern company that performs modern business analysis.
River incurred actual fixed manufacturing overhead costs of $290,000. Using standard costing, River allocated
$225,000 in fixed manufacturing overhead costs. If River observed a $1500 unfavorable fixed manufacturing
overhead volume variance, what amount had management budgeted for fixed manufacturing overhead?
A) $291,500 B) $288,500 C) $223,500 D) $226,500

9) The Dogwood Technology Company managerial accountant computes the May total variance report. The
budgeted fixed overhead was $47,480 and the standard fixed overhead cost allocated to production was $47,200.
The actual fixed overhead totaled $46,830. Compute the fixed overhead budget variance and the fixed overhead
volume variance.
A) $650 F; $280 U B) $930 U; $370 F C) $280 F; $650 U D) $370 U; $930 F

10) What type of variance results when the actual fixed overhead costs incurred are greater than the budgeted fixed
overhead costs?
A) Unfavorable fixed overhead volume variance B) Unfavorable fixed overhead budget variance
C) Favorable fixed overhead budget variance D) Favorable fixed overhead volume variance

11) Easel Manufacturing budgeted fixed overhead costs of $1.75 per unit at an anticipated production level of 1250
units. In July Easel incurred actual fixed overhead costs of $4000 and actually produced 1100 units.

What is Easel's fixed overhead volume variance in July?

A) $1812.50 unfavorable B) $262.50 unfavorable
C) $262.50 favorable D) $1812.50 favorable

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12) The managerial accountant at Space Right Office Cubicles calculates fixed overhead variances to complete the
August report. The actual fixed overhead cost in the month of August was $35,200 and the budgeted fixed
overhead cost was $36,900. The standard hours in August were 2600 and the standard rate per machine-hour
was $14. Calculate the standard fixed overhead cost allocated to production, the fixed overhead budget
variance, and the fixed overhead volume variance.
A) $35,200; $2636 F; $1700 U B) $36,900; $2200 F; $1200 U
C) $36,400; $1700 F; $500 U D) $32,600; $1200 F; $1700 U

13) The fixed overhead volume variance is the difference between the budgeted fixed overhead and
A) the budgeted variable overhead.
B) the actual overhead.
C) the standard fixed overhead cost allocated to production.
D) the budgeted fixed overhead in the static budget.

14) Easel Manufacturing budgeted fixed overhead costs of $2.25 per unit at an anticipated production level of 1100
units. In July Easel incurred actual fixed overhead costs of $4900 and actually produced 1000 units.

What is Easel's fixed overhead budget variance for July?

A) $2650.00 favorable B) $2425.00 unfavorable
C) $2650.00 unfavorable D) $2425.00 favorable

15) How is the fixed overhead volume variance calculated?

A) The difference between the actual fixed overhead costs incurred and the standard fixed overhead costs
allocated
B) The difference between the standard fixed overhead costs allocated to production and the budgeted fixed
overhead costs
C) The difference between the actual fixed overhead costs incurred and the budgeted fixed overhead costs
D) The difference between the standard fixed overhead rate and the actual fixed overhead rate multiplied by
the actual hours used

16) The two fixed overhead variances are the

A) rate and efficiency variances. B) budget and volume variances.
C) price and usage variances. D) rate and volume variances.

17) The standard variable overhead cost rate for Harris Manufacturing is $19.00 per unit. Budgeted fixed overhead
cost is $38,750. Harris Manufacturing budgeted 3100 units for the current period and actually produced 3700
finished units. What is the fixed overhead volume variance?

Assume the allocation base for fixed overhead costs is the number of units expected to be produced.
A) $11,400 unfavorable B) $7500 favorable
C) $7500 unfavorable D) $11,400 favorable

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18) Monty Manufacturing builds playground equipment that it sells to elementary schools and municipalities.
Monty's management has contracted you to perform a variance analysis on the fixed manufacturing overhead
for its line of slides. Monty's cost accounting team informs you that it allocates fixed overhead based on machine
hours. This period production was budgeted at 35 slides. Budgeted and actual production data follows:

Standard fixed overhead cost per machine hour $11

Standard machine hours per slide 4

Actual production 320

Actual fixed overhead cost $21,500

What is the fixed manufacturing overhead volume variance in this period?

A) $19,960 unfavorable B) $19,960 favorable
C) $12,540 unfavorable D) $12,540 favorable

19) The managerial accountant at Aquatics Pools and Spas assess a fixed overhead budget variance of $4200 U in
the month of April. The standard hours in April were 2300 hours and the standard rate was projected at $11 per
machine-hour. There were unforeseen complications that involved raw materials and the standard rate
projected per machine-hour was inaccurate. What was the standard rate per machine-hour if the standard fixed
overhead cost of production is $40,400? What is the budgeted fixed overhead amount if the actual fixed
overhead is $45,000?
A) $17.57/machine hour; $40,800 B) $9.62/machine hour; $42,700
C) $17.74/machine hour; $44,600 D) $19.57/machine hour; $49,200

20) The Perry Corporation recorded the following budgeted and actual information relating to fixed overhead costs
for its Z-Line of products:

Standard fixed overhead per direct labor hour $3

Standard direct labor hours per unit 0.75
Budgeted production 3100
Budgeted fixed overhead costs $6975.00

Actual production in units 3900

Actual fixed overhead costs incurred $2200.00

What is Perry's fixed manufacturing overhead volume variance?

A) $1800.00 favorable B) $4775.00 favorable
C) $4775.00 unfavorable D) $1800.00 unfavorable

21) Nexus Industries uses a standard costing system to apply manufacturing costs to its production process. In May,
Nexus anticipated producing 2500 units with fixed manufacturing overhead costs allocated at $8.4 per direct
labor hour with a standard of 2.5 direct labor hours per unit. In May, actual production was 2900 units and
actual fixed manufacturing overhead costs were $16,000.

What was Nexus' fixed manufacturing overhead budget variance in May?

A) $36,500 favorable B) $36,500 unfavorable
C) $8400 unfavorable D) $8400 favorable

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22) Which of the following statements may be true if actual units produced exceed the budgeted units to be
produced?
A) Fixed overhead volume variance is expected to be favorable.
B) Production volume variance is expected to be unfavorable.
C) Overhead flexible budget variance is expected to be favorable.
D) Overhead flexible budget variance is expected to be unfavorable.