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In: Accounting
True/False ____ 1. The most effective means of presenting standard factory overhead cost variance data is...
True/False
____ 1. The most effective means of presenting standard factory overhead cost variance data is through a factory overhead cost variance report.
____ 2. Factory overhead uses different variances than direct materials and direct labor because factory overhead has fixed and variable cost elements. Direct materials and direct labor are variable costs.
____ 3. Standard costs may be incorporated into the accounts in the general ledger.
____ 4. Standards should be revised when prices, product designs, labor rates, or manufacturing methods change.
____ 5. An example of a criticism of standard costs is that standards may limit operating improvements by discouraging improvement beyond the standard.
Solutions
Expert Solution
1. Factory overhead cost variance report provides the necessary details relating to standard factory overhead cost variance data. It represents a comparison between the actual and budgeted overhead.
Answer: True
2. Factory overhead also comprises of certain fixed manufacturing overhead like factory rent, factory supervisor salary, etc. And direct labor and direct materials are variable as they can be allocated to cost units.
Answer: True
3. Yes, in certain industries the standard cost set based on price, technical specification, market conditions, etc. can be incorporated in the general ledger.
Answer: True
4. The standards costs are set on the basis of current conditions. For example, if the company has purchased a more efficient machine which produces more units in less time, then the quantity standard should be revised otherwise the a low standard will be implemented.
Answer: True
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ekkarill92 answered 2 years agoRelated Solutions
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Factory overhead cost variance report Instructions Amount Descriptions Factory Overhead Cost Variance Report X Instructions Tiger...
Factory overhead cost variance report
Instructions
Amount Descriptions
Factory Overhead Cost Variance Report
X
Instructions
Tiger Equipment Inc., a manufacturer of construction equipment,
prepared the following factory overhead cost budget for the Welding
Department for May of the current year. The company expected to
operate the department at 100% of normal capacity of 8,500
hours.
TIGER EQUIPMENT INC.
Factory Overhead Cost Budget—Welding Department
For the Month Ended May 31
1
Variable costs:
2
Indirect factory wages
$29,750.00
3
Power and...
1. True or false: A debit balance means that a variance is favorable since it decreases...
1. True or false: A debit balance means that a variance is
favorable since it decreases income (just like a expense).
2. True or false: If the actual number of units produced is less
than the number of units budgeted to produced, then the fixed
overhead volume variance will always be unfavorable.
3. Raw Materials Inventory: 120,000 ; DM Price Variance: 5,000 ;
Accounts Payable: 125,000. The debit to DM Price Variance in the
journal entry above indicates a. that...
Factory Overhead Cost Variance Report Tannin Products Inc. prepared the following factory overhead cost budget for...
Factory Overhead Cost Variance Report
Tannin Products Inc. prepared the following factory overhead
cost budget for the Trim Department for July of the current year,
during which it expected to use 10,000 hours for production:
Variable overhead costs:
Indirect factory labor
$24,000
Power and light
7,500
Indirect materials
17,000
Total variable overhead cost
$ 48,500
Fixed overhead costs:
Supervisory salaries
$43,890
Depreciation of plant and equipment
11,550
Insurance and property taxes
21,560
Total fixed overhead cost
77,000
Total factory overhead...
Factory Overhead Cost Variance Report Tannin Products Inc. prepared the following factory overhead cost budget for...
Factory Overhead Cost Variance Report Tannin Products Inc.
prepared the following factory overhead cost budget for the Trim
Department for July of the current year, during which it expected
to use 18,000 hours for production: Variable overhead cost:
Indirect factory labor $43,200 Power and light 13,500 Indirect
materials 21,600 Total variable overhead cost $ 78,300 Fixed
overhead cost: Supervisory salaries $76,490 Depreciation of plant
and equipment 20,130 Insurance and property taxes 37,580 Total
fixed overhead cost 134,200 Total factory overhead...
Factory Overhead Cost Variance Report Tannin Products Inc. prepared the following factory overhead cost budget for...
Factory Overhead Cost Variance Report
Tannin Products Inc. prepared the following factory overhead
cost budget for the Trim Department for July of the current year,
during which it expected to use 8,000 hours for production:
Variable overhead costs:
Indirect factory labor
$23,200
Power and light
6,000
Indirect materials
12,800
Total variable overhead cost
$42,000
Fixed overhead costs:
Supervisory salaries
$38,990
Depreciation of plant and equipment
10,260
Insurance and property taxes
19,150
Total fixed overhead cost
68,400
Total factory overhead cost...
Factory Overhead Cost Variance Report Tannin Products Inc. prepared the following factory overhead cost budget for...
Factory Overhead Cost Variance Report
Tannin Products Inc. prepared the following factory overhead
cost budget for the Trim Department for July of the current year,
during which it expected to use 8,000 hours for production:
Variable overhead costs:
Indirect factory labor
$24,800
Power and light
6,000
Indirect materials
10,400
Total variable overhead cost
$ 41,200
Fixed overhead costs:
Supervisory salaries
$33,520
Depreciation of plant and equipment
8,820
Insurance and property taxes
16,460
Total fixed overhead cost
58,800
Total factory overhead...
Factory Overhead Cost Variance Report Tannin Products Inc. prepared the following factory overhead cost budget for...
Factory Overhead Cost Variance Report
Tannin Products Inc. prepared the following factory overhead
cost budget for the Trim Department for July of the current year,
during which it expected to use 12,000 hours for production:
Variable overhead costs:
Indirect factory labor
$39,600
Power and light
9,120
Indirect materials
16,800
Total variable overhead cost
$ 65,520
Fixed overhead costs:
Supervisory salaries
$45,600
Depreciation of plant and equipment
12,000
Insurance and property taxes
22,400
Total fixed overhead cost
80,000
Total factory overhead...
Factory Overhead Cost Variances The following data relate to factory overhead cost for the production of...
Factory Overhead Cost Variances
The following data relate to factory overhead cost for the
production of 8,000 computers:
Actual:
Variable factory overhead
$188,200
Fixed factory overhead
61,750
Standard:
8,000 hrs. at $29
232,000
If productive capacity of 100% was 13,000 hours and the total
factory overhead cost budgeted at the level of 8,000 standard hours
was $255,750, determine the variable factory overhead controllable
variance, fixed factory overhead volume variance, and total factory
overhead cost variance. The fixed factory overhead rate...
Factory Overhead Cost Variances The following data relate to factory overhead cost for the production of...
Factory Overhead Cost Variances
The following data relate to factory overhead cost for the
production of 6,000 computers:
Actual:
Variable factory overhead
$229,900
Fixed factory overhead
65,000
Standard:
6,000 hrs. at $46
276,000
If productive capacity of 100% was 10,000 hours and the factory
overhead cost budgeted at the level of 6,000 standard hours was
$302,000, determine the variable factory overhead Controllable
Variance, fixed factory overhead volume variance, and total factory
overhead cost variance. The fixed factory overhead rate was...
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