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Home / Questions / Bellow Ltd. uses direct labor hours as the cost driver for variable overhead. In order to

Bellow Ltd. uses direct labor hours as the cost driver for variable overhead. In order to

Bellow Ltd. uses direct labor hours as the cost driver for variable overhead. In order to calculate the variable overhead efficiency variance, which of the following items does not need to be known? 
A. Actual overhead costs
B. Actual direct labor hours
C. Standard variable overhead rate per direct labor hour
D. Standard direct labor hours allowed

 

72. The variable overhead efficiency variance: 
A. is interpreted in the same manner as the direct labor efficiency variance.
B. measures the efficient use of factory utilities, factory maintenance, and factory supplies.
C. measures the efficient use of the cost driver used in the flexible budget.
D. measures the efficient use of direct materials.

 

73. Sampson Apparel Inc. incurred actual variable overhead expenses of $62,000 in the current year for the production of 10,000 units. Variable overhead was applied at a rate of $2.00 per direct labor hour and 3 direct labor hours were budgeted for each unit. The company used 29,000 direct labor hours for production.

Refer to the Sampson Apparel Inc. information above. What was Sampson’s variable overhead spending variance
A. $4,000 U
B. $4,000 F
C. $2,000 U
D. $2,000 F

 

74. Sampson Apparel Inc. incurred actual variable overhead expenses of $62,000 in the current year for the production of 10,000 units. Variable overhead was applied at a rate of $2.00 per direct labor hour and 3 direct labor hours were budgeted for each unit. The company used 29,000 direct labor hours for production.

Refer to the Sampson Apparel Inc. information above. What was Sampson’s variable overhead efficiency variance
A. $4,000 U
B. $4,000 F
C. $2,000 U
D. $2,000 F

 

75. Latimer Textiles Inc. incurred actual variable overhead expenses of $27,000 in the current year for the production of 8,000 units. Variable overhead was applied at a rate of $1.75 per direct labor hour and 2 direct labor hours were budgeted for each unit. The company used 17,400 direct labor hours for production.

Refer to the Latimer Textiles Inc. information above. What was Latimer’s variable overhead spending variance
A. $3,450 U
B. $3,450 F
C. $2,450 U
D. $2,450 F

 

76. Latimer Textiles Inc. incurred actual variable overhead expenses of $27,000 in the current year for the production of 8,000 units. Variable overhead was applied at a rate of $1.75 per direct labor hour and 2 direct labor hours were budgeted for each unit. The company used 17,400 direct labor hours for production.

Refer to the Latimer Textiles Inc. information above. What was Latimer’s variable overhead efficiency variance
A. $3,450 U
B. $3,450 F
C. $2,450 U
D. $2,450 F

 

77. Atkinson Landscaping applies variable overhead based on direct labor hours. At the beginning of the current year, Atkinson had estimated the following:
 

 

Estimated variable overhead

$56,000

 

Estimated units of production

10,000 units

 

Standard direct labor hours per unit

2.5 hours

 

 

 


During the year, 11,000 units were produced using a total of 27,200 direct labor hours and actual overhead costs were $60,000.

Refer to the Atkinson Landscaping information above. Atkinson’s variable overhead spending variance for the year was: 
A. $   672 F
B. $   928 F
C. $4,000 U
D. $   145 U

 

78. Atkinson Landscaping applies variable overhead based on direct labor hours. At the beginning of the current year, Atkinson had estimated the following:
 

 

Estimated variable overhead

$56,000

 

Estimated units of production

10,000 units

 

Standard direct labor hours per unit

2.5 hours

 

 

 


During the year, 11,000 units were produced using a total of 27,200 direct labor hours and actual overhead costs were $60,000.

Refer to the Atkinson Landscaping information above. Atkinson’s variable overhead efficiency variance for the year was: 
A. $   672 F
B. $   928 F
C. $4,000 U
D. $   145 U

 

79. The fixed overhead volume variance is calculated by taking the difference between: 
A. actual fixed overhead and budgeted fixed overhead.
B. budgeted fixed overhead and budgeted variable overhead.
C. budgeted fixed overhead and applied fixed overhead.
D. budgeted fixed overhead per the flexible budget and budgeted fixed overhead per the static budget.

 

80. Which of the following variances is generally not reported as being favorable or unfavorable? 
A. Variable overhead efficiency variance
B. Direct labor rate variance
C. Fixed overhead volume variance
D. Direct materials usage variance

Jan 09 2020 View more View Less

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