Problem 1: The standard factory overhead rate is $10 per direct labor hour ($8 for variable factory overhead and $2 for fixed factory overhead) based on 100% capacity of 30,000 direct labor hours. The standard cost and the actual cost of factory overhead for the production of 5,000 units during May were as follows:
Standard: 25,000 hours at $10 $250,000
Actual: Variable factory overhead 202,500
Fixed factory overhead 60,000
What is the amount of the factory overhead volume variance?
- $12,500 favorable
- $10,000 unfavorable
- $12,500 unfavorable
- $10,000 favorable
Problem 2: The standard factory overhead rate is $7.50 per machine hour ($6.20 for variable factory overhead and $1.30 for fixed factory overhead) based on 100% capacity of 80,000 machine hours. The standard cost and the actual cost of factory overhead for the production of 15,000 units during August were as follows:
Actual: Variable factory overhead $360,000
Fixed factory overhead 104,000
Standard hours allowed for units produced: 60,000 hours at $7.50 450,000
What is the amount of the factory overhead volume variance?
- $12,000 unfavorable
- $12,000 favorable
- $14,000 unfavorable
- $26,000 unfavorable
Problem 3: At the end of the fiscal year, variances from standard costs are usually transferred to the ______.
- direct labor account
- factory overhead account
- cost of goods sold account
- direct materials account
Problem 4: In a profit center, the department manager has responsibility for and the authority to make decisions that affect _______.
- not only costs and revenues, but also assets invested in the center
- the assets invested in the center, but not costs and revenues
- both costs and revenues for the department or division
- costs and assets invested in the center, but not revenues
Problem 5: Division T reported income from operations of $875,000 and total service department charges of $575,000. Therefore _______.
- net income was $300,000
- the gross profit margin was $300,000
- income from operations before service department charges was $1,450,000
- consolidated net income was $300,000