Question Details

31. The economic impact of the inability to reach a target denominator level of activity would best be

measured by?

A. the amount of the volume variance.

B. the contribution margin lost by failing to meet the target denominator level of activity.

C. the amount of the fixed overhead budget variance.

D. the amount of the variable overhead efficiency variance.

32. Which of the following is not correct?

A.

if the denominator level of activity and the standard hours allowed for the output of the period are the

same, then there is no volume variance.

B.

if the denominator level of activity is greater than the standard hours allowed for the output of the

period, then the volume variance is unfavourable.

C.

if the denominator level of activity is greater than the standard hours allowed for the output of the

period, then the volume variance is favourable.

D. the volume variance is an appropriate measure of the utilization of plant facilities.

33. The fixed overhead volume variance is due to?

A. inefficient or efficient use of whatever the denominator activity is.

B. inefficient or efficient use of overhead resources.

C.

a difference between the denominator activity and the standard hours allowed for the actual output of

the period.

D. a shift in the amount of hours required to produce the actual output.

34. Which of the following variances is caused by a difference between the denominator activity in the

predetermined overhead rate and the standard hours allowed for the actual production of the period?

A. variable overhead spending variance.

B. variable overhead efficiency variance.

C. fixed overhead budget variance.

D. fixed overhead volume variance.

35. Lanta Restaurant compares monthly operating results with a static budget prepared at the beginning of the

year. When actual sales are less than budget, would the restaurant usually report favourable variances on

variable food costs and fixed supervisory salaries?

A. choice A.

B. choice B.

C. choice C.

D. choice D.

36. Overhead cost is applied to units based on direct labour-hours. For April, total overhead cost was

budgeted at $80,000 based on a denominator activity level of 20,000 direct labour-hours for the month.

The standard cost card indicates that each unit of finished product requires 2 direct labour-hours. The

following data are available for April's activity:

What amount of total overhead cost would have been applied to production for the month of April?

A. $76,000.

B. $78,000.

C. $79,500.

D. $80,000.

37. Hart Company's labour standards call for 500 direct labour-hours to produce 250 units of product. During

October the company worked 625 direct labour-hours and produced 300 units. The standard hours

allowed for October would be?

A. 250 hours.

B. 500 hours.

C. 600 hours.

D. 625 hours.

38. At Jacobson Company, indirect labour is a variable cost that varies with direct labour-hours. Last month's

performance report showed that actual indirect labour cost totalled $5,780 for the month and that the

associated spending variance was $245 F. If 24,100 direct labour-hours were actually worked last month,

then the flexible budget cost formula for indirect labour must be (per direct labour-hour)?

A. $0.20.

B. $0.25.

C. $0.30.

D. $0.35.

39. At Overland Company, maintenance cost is exclusively a variable cost that varies directly with machinehours.

The performance report for July showed that actual maintenance costs totalled $9,800 and that

the associated spending variance was $200 unfavourable. If 8,000 machine-hours were actually worked

during July, the budgeted maintenance cost per machine-hour was?

A. $1.20.

B. $1.225.

C. $1.25.

D. $1.275.

40. Tyro Company has a standard cost system in which it applies manufacturing overhead to units of product

on the basis of direct labour-hours (DLHs). The following information is available:

Based on these data, what is the variable overhead spending variance?

A. $750 unfavourable.

B. $950 favourable.

C. $1,500 unfavourable.

D. $1,700 favourable.