Managarial Acct

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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:

 [pic] 

 

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 standards.

 

AACSB: Reflective Thinking
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Knowledge
Brewer - Chapter 09 #14
Learning Objective: 1
Level: Easy
 

 The following data have been provided by Dicus Corporation:

 [pic] 

 

Brewer - Chapter 09
 

5. The variable overhead rate variance for lubricants is closest to:  A. $113 U
B. $120 U
C. $7 U
D. $113 F

AR = $2,387 ( 2,500 = $0.95 (rounded)

Variable overhead rate variance = AH (AR - SR) = 2,500 ($0.95 - $1.00) = $113 F (rounded)

 

AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Application
Brewer - Chapter 09 #106
Learning Objective: 4
Level: Easy
 

 Reenu Company manufactures wigs out of used dental floss. The variable cost standards for wig production developed by Reenu are as follows:

 [pic] 

Variable overhead at Reenu is based on direct labor-hours. The actual results for the month of October were as follows:

 [pic] 

 

Brewer - Chapter 09
 

6. What is Reenu's labor efficiency variance for October?  A. $2,700 favorable
B. $7,200 unfavorable
C. $9,900 unfavorable
D. $27,600 favorable

SH = 12,500 ( 0.75 = 9,375

Direct labor efficiency variance = SR (AH - SH) = $12.00 (10,200 - 9,375) = $9,900 U

 

AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Application
Brewer - Chapter 09 #78
Learning Objective: 3
Level: Medium
 

7. The variable overhead rate variance for supplies is closest to:  A. $133 U
B. $47 F
C. $180 U
D. $133 F

AR = $3,703 ( 2,500 = $1.48 (rounded)

Variable overhead rate variance = AH (AR - SR) = 2,500 ($1.48 - $1.50) = $47 F (rounded)

 

AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: Measurement
Bloom's: Application
Brewer - Chapter 09 #107
Learning Objective: 4
Level: Easy
 

 The Holmes Division recorded operating data as follows for the past year:

 [pic] 

 

Brewer - Chapter 10
 

8. For the past year,...
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