# T 11computing variances for fixed setup costs under

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__ T __11.Computing variances for fixed setup costs under an ABC system parallels the computation of variances for fixed overhead costs under a non-ABC system.
Multiple Choice Select the best answer to each question. Space is provided for computations after the quantitative questions. __ 1.(CPA) Information on Fire Company’s overhead costs is as follows:
Activate the following button to retrieve the URL to cite or link to this page The total overhead variance is: c. \$6,000 unfavorable. d. \$7,000 favorable. Total overhead variance = Total overhead incurred − Total overhead allocated (\$73,000 + \$17,000) − 32,000(\$2.50 + \$0.50) \$96,000 = − \$6,000 or \$6,000 Favorable Actual variable overhead \$73,000 Actual fixed overhead \$17,000 Budgeted hours allowed for actual output produced 32,000
_ A __ 2.CPA adapted) Geyer Company uses standard costing. For the month of April 2009, total overhead is budgeted at \$80,000 based on using 20,000 machine-hours. At standard, each finished unit of output requires 2 machine-hours. The following data are available for April 2011: Actual units of output produced 9,500 Machine-hours used 19,500 Total overhead incurred \$79,500 What total amount of variable and fixed overhead should Geyer credit to the Manufacturing Overhead Allocated account for April 2011? Budgeted fixed overhead cost rate per machine-hour \$0.50
Homework_Week1_Chapter8 Barbara Carter
__ C __ 3.The following information is for Pappillon Corporation’s variable manufacturing overhead costs last month: favorable flexible-budget variance of \$3,000, unfavorable efficiency variance of \$2,500. The spending variance is: \$3,000 F = VOH spending variance + \$2,500 U \$3,000 F − (\$2,500 U) \$3,000 F + \$2,500 F = \$5,500 F a. \$500 favorable. b. \$5,500 unfavorable. c. \$5,500 favorable. d. none of the above. _ D ___ 4.(CPA) Fawcett Company prepared the following information on its manufacturing operations for VOH flexible-budget variance = VOH spending variance + VOH efficiency variance \$3,000 F = VOH spending variance + \$2,500 U \$3,000 F − (\$2,500 U) \$3,000 F + \$2,500 F = \$5,500 F
2010: Static Budget Maximum Capacity Percent of capacity 80% 100% Machine-hours 3,200 4,000 Variable overhead \$64,000 \$80,000 Fixed overhead \$160,000 \$160,000 Fawcett operated at 90% of maximum capacity during 2010. Actual manufacturing overhead for 2010 is \$252,000. Fawcett uses the 2-variance analysis of manufacturing overhead. The total overhead flexible-budget variance for the year is: b. \$0.
c. \$18,000 unfavorable. d. \$20,000 unfavorable. = \$252,000 − (\$160,000 + \$72,000) = \$252,000 − \$232,000 = \$20,000 U
Homework_Week1_Chapter8 Barbara Carter _ E