Question

In: Accounting

1 Bradpon Incorporated planned to use $37.50 of material per unit but actually used $36.75 of...

1

Bradpon Incorporated planned to use $37.50 of material per unit but actually used $36.75 of material per unit, and planned to make 1800 units but actually made 1600 units.

The sales-volume variance is:

a.

$1200 favourable.
b.

$7500 unfavourable.
c.

$7500 favourable.
d.

$1200 unfavourable.
e.

No correct answer

Hobart Corporation manufactured 20 000 heaters during November. The overhead cost-allocation base is $15.75 per machine-hour. The following variable overhead data pertain to November:

                                                                                            Actual              Budgeted
Production                                                                   20 000 units         22 000 units
Machine-hours                                                            7875 hours          9000 hours
Variable overhead cost per machine-hour:            $15.50                 $15.75

What is the flexible-budget amount? ( rounded to two decimal)

a.

$124 031.30
b.

$128 863.64
c.

$139 500.00
d.

$124 000.00
e.

No correct answer

Healesville Animal Products manufactured 32 000 horse grooming kits during 2018. The fixed-overhead cost-allocation rate is $20.00 per machine-hour. The following fixed overhead data pertain to 2018:

                                                                                                   Actual      Static Budget
Production                                                                   32 000 units        30 000 units
Machine-hours                                                             6100 hours          6000 hours
Fixed overhead costs for 2018                                  $123 000               $120 000

What is the fixed overhead spending variance?

a.

$1000 unfavourable
b.

$5000 favourable
c.

$3000 unfavourable
d.

$2000 favourable
e.

No correct answer

Healesville Animal Products manufactured 32 000 horse grooming kits during 2018. The fixed-overhead cost-allocation rate is $20.00 per machine-hour. The following fixed overhead data pertain to 2018:

                                                                                                   Actual      Static Budget
Production                                                                   32 000 units        30 000 units
Machine-hours                                                             6100 hours          6000 hours
Fixed overhead costs for 2018                                  $123 000               $120 000

What is the fixed overhead production-volume variance?

a.

$3000 unfavourable
b.

$1000 unfavourable
c.

$2000 favourable
d.

$8000 favourable
e.

No correct answer

Solutions

Expert Solution

(1) The sales-volume variance is:

(Actual units – Planned units) * Planned rate

= (1600 – 1800) * $37.50 = $7500 Unfavorable

Option (b) is correct

(2) What is the flexible-budget amount? ( rounded to two decimal)

Budgeted machine hours * Budgeted OH rate

Budgeted machine hours = (9000/22000)*20000 = 8181.81

    = 8181.81 hours * $15.75 = $128863.64

Option (b) is correct

(3) What is the fixed overhead spending variance?

Actual Overhead – Budgeted Overhead

Budgeted Overhead = Budgeted machine hours * Budgeted OH rate

   = (6000/30000*32000)*$20 = $128000

$123000 - $128000 = $5000 Favorable

Option (b) is correct

(4)What is the fixed overhead production-volume variance?

Standard Fixed Overhead Per hour = $120000/6000Hours

=$20 per hour

Standard Hours Allowed For Actual Production = 6000 hours /30000 units *32000 units

=6400 hours

Fixed Overhead Volume Variance =

Standard Rate Per hour * (Standard Hours Allowed For Actual Production - Budgeted Hours)

=$20* (6400 hours -6000 hours )

= $8000 Favorable

Option (d) is correct

ekkarill92 answered 1 year ago
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