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Standard Costing Ang Variance Analysis

The document discusses standard costing and variance analysis using examples from multiple companies. It provides information on standard overhead rates, actual overhead costs, budgeted vs actual production levels, and variances calculated using 1, 2, or 3-way analysis methods. Multiple choice questions test the reader's ability to calculate different types of variances such as spending, efficiency, volume, and total overhead variances based on the information given.

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Lhorene Hope Dueñas
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© © All Rights Reserved
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366 views

Standard Costing Ang Variance Analysis

The document discusses standard costing and variance analysis using examples from multiple companies. It provides information on standard overhead rates, actual overhead costs, budgeted vs actual production levels, and variances calculated using 1, 2, or 3-way analysis methods. Multiple choice questions test the reader's ability to calculate different types of variances such as spending, efficiency, volume, and total overhead variances based on the information given.

Uploaded by

Lhorene Hope Dueñas
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Standard Costing and Variance Analysis

Ponc Company uses a standard cost accounting system. The following overhead costs and production data are
available for September:

Standard fixed OH rate per DLH $1


Standard variable OH rate per DLH $4
Budgeted monthly DLHs 40,000
Actual DLHs worked 39,500
Standard DLHs allowed for actual production 39,000
Overall OH variance-favorable $2,000

The total applied manufacturing overhead for September should be


a. $195,000.
b. $197,000.
c. $197,500.
d. $199,500.
ANS: A

Lutr Manufacturing Company uses a standard cost system and prepared the following budget at
normal capacity for October:

Direct labor hours 24,000


Variable OH $48,000
Fixed OH $108,000
Total OH per DLH $6.50

Actual data for October were as follows:


Direct labor hours worked 22,000
Total OH $147,000
Standard DLHs allowed for capacity attained 21,000

Using the two-way analysis of overhead variances, what is the controllable variance for October?
a. $3,000 F
b. $5,000 F
c. $9,000 F
d. $10,500 U
ANS: A

The following information is available from the Fitz Company:

Actual OH $15,000
Fixed OH expenses, actual $7,200
Fixed OH expenses, budgeted $7,000
Actual hours 3,500
Standard hours 3,800
Variable OH rate per DLH $2.50

Assuming that Fitz uses a three-way analysis of overhead variances, what is the overhead spending
variance?
a. $750 F
b. $750 U
c. $950 F
d. $1,500 U
ANS: A

107. Norr Company uses a two-way analysis of overhead variances. Selected data for the March production
activity are as follows:

Actual variable OH incurred $196,000


Variable OH rate per MH $6
Standard MHs allowed 33,000
Actual MHs 32,000

Assuming that budgeted fixed overhead costs are equal to actual fixed costs, the controllable variance
for March is
a. $2,000 F.
b. $4,000 U.
c. $4,000 F.
d. $6,000 F.
ANS: A

Super Company uses a standard cost system. Overhead cost information for January is as follows:

Total actual overhead incurred $12,600


Fixed overhead budgeted $3,300
Total standard overhead rate per MH $4
Variable overhead rate per MH $3
Standard MHs allowed for actual production 3,500

What is the total overhead variance?


a. $1,200 F
b. $1,200 U
c. $1,400 F
d. $1,400 U
ANS: C

Toy Company has developed standard overhead costs based on a capacity of 180,000 machine hours
as follows:

Standard costs per unit:


Variable portion 2 hours @ $3 = $ 6
Fixed portion 2 hours @ $5 = 10
$16

During November, 85,000 units were scheduled for production, but only 80,000 units were actually
produced. The following data relate to November:

Actual machine hours used were 165,000.


Actual overhead incurred totaled $1,378,000 ($518,000 variable plus $860,000 fixed).
All inventories are carried at standard cost.
Refer to Toy Company. The variable overhead spending variance for November was
a. $15,000 U.
b. $23,000 U.
c. $38,000 F.
d. $38,000 U.
ANS: B

Refer to Toy Company. The variable overhead efficiency variance for November was
a. $15,000 U.
b. $23,000 U.
c. $38,000 F.
d. $38,000 U.
ANS: A

Refer to Toy Company. The fixed overhead volume variance for November was
a. $60,000 U.
b. $60,000 F.
c. $100,000 F.
d. $100,000 U.
ANS: D

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