Question

27. The following standards for variable manufacturing overhead have been established for a company that makes only one product:

Standard hours per unit of output		7.4	hours
Standard variable overhead rate	$	13.80	per hour

The following data pertain to operations for the last month:

Actual hours		2,775	hours
Actual total variable manufacturing overhead cost	$	38,995
Actual output		200	units

What is the variable overhead efficiency variance for the month?

Multiple Choice

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$18,571 U

$17,871 U

$700 U

$20,424 F

28. The following materials standards have been established for a particular product:

Standard quantity per unit of output		6.1	pounds
Standard price	$	14.90	per pound

The following data pertain to operations concerning the product for the last month:

Actual materials purchased		7,350	pounds
Actual cost of materials purchased	$	64,580
Actual materials used in production		6,850	pounds
Actual output		870	units

The direct materials purchases variance is computed when the materials are purchased.

What is the materials quantity variance for the month?

Multiple Choice

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$4,393 U

$13,557 U

$22,991 U

$7,450 U

29. Brand Corporation makes a product with the following standard costs:

	Standard Quantity or Hours			Standard Price or Rate			Standard Cost Per Unit
Direct materials		3.8	liters	$	8.50	per liter	$	32.30
Direct labor		0.4	hours	$	37.00	per hour	$	14.80
Variable overhead		0.4	hours	$	3.50	per hour	$	1.40

The company budgeted for production of 4,100 units in September, but actual production was 4,000 units. The company used 6,940 liters of direct material and 1,830 direct labor-hours to produce this output. The company purchased 7,300 liters of the direct material at $8.70 per liter. The actual direct labor rate was $39.10 per hour and the actual variable overhead rate was $3.20 per hour.

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The variable overhead rate variance for September is:

Multiple Choice

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$480 F

$549 U

$549 F

$480 U

Answer 1

1) Variable overhead efficiency variance = (Standard hour-actual hour)Standard rate

= (1480-2775)*13.80

Variable overhead efficiency variance = 17871 U

So answer is $17871 U

2) Material quantity variance = (Standard quantity-actual quantity)Standard rate

= (5307-6850)*14.90

Material quantity variance = 22991 U

So answer is $22991 U

3) Variable overhead rate variance = (Standard rate-actual rate) actual hours

= (3.50-3.20)*1830

Variable overhead rate variance = 549 F

So answer is $549 F