Exam 23: Predetermined Overhead Rates and Overhead Analysis in a Standard Costing System

The Hawkins Company uses a standard costing system in which manufacturing overhead is applied on the basis of standard direct labor-hours (DLHs). During February, the company actually used 9,200 direct labor-hours and made 2,900 units of finished product. The standard cost card for one unit of product includes the following: Variable factory overhead: 3 DLHs $4.75 per DLH Fixed factory overhead: 3 DLHs $3.00 per DLH For February, the company incurred $28,450 in fixed manufacturing overhead costs and recorded a $900 favorable volume variance. -The amount of fixed manufacturing overhead cost contained in the company's budget for February is:

The Chase Company uses a standard cost system in which manufacturing overhead costs are applied to products on the basis of standard machine-hours. For November, the company's flexible budget for manufacturing overhead showed the following total budgeted costs at the denominator activity level of 40,000 machine-hours: During November 42,000 machine-hours were used to complete 13,200 units of product with the following actual overhead costs: The standard time allowed to complete one unit of product is 3.6 machine-hours. -The total amount of overhead cost applied to Work in Process during November was:

The Chase Company uses a standard cost system in which manufacturing overhead costs are applied to products on the basis of standard machine-hours. For November, the company's flexible budget for manufacturing overhead showed the following total budgeted costs at the denominator activity level of 40,000 machine-hours: During November 42,000 machine-hours were used to complete 13,200 units of product with the following actual overhead costs: The standard time allowed to complete one unit of product is 3.6 machine-hours. -The variable overhead efficiency variance for utilities cost for November was:

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.

The Phelps Company applies overhead costs to products on the basis of standard direct labor-hours. The standard cost card shows that 5 direct labor-hours are required per unit of product. Phelps Company had the following budgeted and actual data for March: The budgeted direct labor-hours is used as the denominator activity for the month. -The variable overhead efficiency variance for March is:

A manufacturing company uses a standard costing system in which standard machine-hours (MHs) is 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: -What was the fixed manufacturing overhead volume variance for the period to the nearest dollar?

The Chase Company has a standard cost system in which manufacturing overhead is applied on the basis of standard direct labor-hours (DLHs). The company recorded the following activity and cost data relating to manufacturing overhead for October: -The amount of fixed manufacturing overhead cost that was estimated for September was:

Meister Electronics Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs).The company had budgeted its fixed manufacturing overhead cost at $68,800 for the month and its level of activity at 2,000 MHs.The actual total fixed manufacturing overhead was $73,300 for the month and the actual level of activity was 1,800 MHs.What was the fixed manufacturing overhead budget variance for the month to the nearest dollar?

Trecroci Corporation applies manufacturing overhead to products on the basis of standard machine-hours.The company bases its predetermined overhead rate on 2,500 machine-hours.The company's total budgeted fixed manufacturing overhead is $5,750.In the most recent month,the total actual fixed manufacturing overhead was $6,030.The company actually worked 2,600 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 2,490 machine-hours.What was the overall fixed manufacturing overhead volume variance for the month?

A company has a standard cost system in which fixed and variable manufacturing overhead costs are applied to products on the basis of direct labor-hours.The company's choice of the denominator level of activity affects the Fixed component of the predetermined overhead rate.

The economic impact of the inability to reach a target denominator level of activity would best be measured by:

Favreau Corporation estimates that its variable manufacturing overhead is $6.10 per machine-hour and its fixed manufacturing overhead is $352,590 per period. -If the denominator level of activity is 7,000 machine-hours,the predetermined overhead rate would be:

A manufacturer of playground equipment uses a standard costing system in which standard machine-hours (MHs) is 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: -What is the predetermined fixed manufacturing overhead rate to the nearest cent?

The Dodge Company makes and sells a single product and uses a standard cost system in which manufacturing overhead costs are applied to units of product on the basis of standard direct labor-hours. The standard cost card shows that 5 direct labor-hours are required per unit of product. The Dodge Company had the following budgeted and actual data for the year: The budgeted direct labor-hours is used as the denominator activity for the month. -The fixed manufacturing overhead budget variance was:

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!

A company has a standard cost system in which fixed and variable manufacturing overhead costs are applied to products on the basis of direct labor-hours.The company's choice of the denominator level of activity affects the Variable component of the predetermined overhead rate.

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.

Behring Corporation applies manufacturing overhead to products on the basis of standard machine-hours.Budgeted and actual fixed manufacturing overhead costs for the most recent month appear below: The company based its original budget on 3,200 machine-hours.The company actually worked 3,170 machine-hours during the month.The standard hours allowed for the actual output of the month totaled 3,250 machine-hours.What was the overall fixed manufacturing overhead volume variance for the month?

Franklin Glass Works uses a standard cost system in which manufacturing overhead is applied on the basis of standard direct labor-hours. Each unit requires two standard hours of direct labor for completion. The denominator activity for the year was based on budgeted production of 200,000 units. Total overhead was budgeted at $900,000 for the year, and the fixed manufacturing overhead rate was $1.50 per direct labor-hour. The actual data pertaining to the manufacturing overhead for the year are presented below: -Franklin's variable overhead rate variance for the year is:

Seroka Corporation estimates that its variable manufacturing overhead is $6.90 per machine-hour and its fixed manufacturing overhead is $745,290 per period. -If the denominator level of activity is 9,000 machine-hours,the fixed element in the predetermined overhead rate would be: