Managarial Acct

EVQUES T3 SuB 2011 Key

1. In a recent period 12,250 units were made and there was a favorable labor efficiency variance of $22,500. If 41,000 labor-hours were worked and the standard wage rate was $12 per labor-hour, the standard hours allowed per unit of output is closest to:
A. 3.19
B. 3.35
C. 3.50
D. 6.00

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AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom 's: Analysis
Brewer - Chapter 09 #40
Learning Objective: 3
Level: Hard
Source: CIMA, adapted

A manufacturing company that has only one product has established the following standards for its variable overhead. The company uses direct labor-hours (DLHs) as its measure of activity.

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The following data pertain to operations for the last month:

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Brewer - Chapter 09

2. What is the variable overhead efficiency variance for the month?
A. $504 U
B. $1,120 U
C. $1,120 F
D. $1,144 F

SH = 2,400 ( 0.7 = 1,680

Variable overhead efficiency variance = SR (AH - SH) = $14.30 (1,600 - 1,680) = $1,144 F

AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom 's: Application
Brewer - Chapter 09 #99
Learning Objective: 4
Level: Medium

The following data have been provided by Wordell Corporation:

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Brewer - Chapter 09

3. The variable overhead rate variance for power is closest to:
A. $84 F
B. $765 U
C. $765 F
D. $849 U

AR = $33,105 ( 11,520 = $2.87 (rounded)

Variable overhead rate variance = AH (AR - SR) = 11,520 ($2.87 - $2.80) = $8,49 U (rounded)

AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom 's: Application
Brewer - Chapter 09 #103
Learning Objective: 4
Level: Easy

4. The standards that allow for no machine breakdowns or other work interruptions and that require peak efficiency at all times are referred to as:
A. normal standards.
B. practical standards.
C. ideal standards.
D. budgeted