Question

Please answer the following questions:

Q1 A company just calculated its actual variable overhead. Which of the following was most likely included in that calculation?

a. Direct materials and direct labor (this do not include indirect materials and indirect labor)

b. Factory Utilities

c. Both a and b

d. None of the above

Q2 At the end of the year, companies sometimes close any variance accounts to which of the following accounts?

a. All of the above

b. Finished Goods

c. Work in Process

d. Cost of Goods Sold

Q3 The total materials flexible budget variance can be split into:

a. Variable overhead variance

b.Fixed overhead and variable overhead

c. Labor rate variance and Labor efficiency variance

d. Materials price variance and Materials efficiency variance

Q4 Trendy Coats applies overhead based on labor hours. It has a predetermined overhead application or standard rate of $5.00/hour. If they had 1000 standard hours and an unfavorable variable overhead efficiency variance of $400 Unfavorable, how many actual hours were used?

a. 600

b. 1,080

c. 980

d. 1,400

Answer 1

q1 .b.factory utilities.

factory utilities is a variable overhead.

Direct materials and direct overhead will be a part of prime cost but not overheads.

q2.a. all of the above

The material  variance accounts are allocated to finished goods work in process and cost of goods sold, the immaterial ones are closed to cost of goods sold.

q3.d.material price variance and material efficiency variance.

material flexible budget variance can be split into material price variance and material efficiency variance.

q4. B.1080.

actual hours = standard hours + (unfavorable efficiency variance / standard rate per hour)

=>1000+ ($400/5)

=>1080 hours.