Primera Parte: Marco Teórico
IV. La Sobreedad Escolar
1. La condición de sobreedad escolar
*. Standard costs and budgetary control methods should be closely related.
This relationship is especially important for factory overhead. Better control over factory overhead can be achieved if a flexible budget, rather than a fixed budget is used. The flexible budget for Kupang Corporation is summarized below:
Percent of Normal Operating Capacity
80% 90% 100%* 110%
Variable overhead P21,000 P23,000 P25,000 P27,000
Fixed overhead 50,000 50,000 50,000 50,000
Total factory
overhead P71,000 P73,000 P75,000 P77,000
* normal capacity
In accordance with the standards established, 100,000 units of product should be manufactured when the company operates at its normal capacity. The standard labor time per unit of product is 15 minutes. Actual production in 1980 was 90,000 units of product in 44,000 hours.
What is the budgeted factory overhead adjusted to standard hours? (M)
a. P67,500 c. P75,000
b. P72,500 d. P90,500 RPCPA 1081
Budget (Controllable) Variance
*. Assuming actual factory overhead is P7,250; budgeted fixed overhead is P3,600; variable overhead rate is P2.00 per hour and the standard hours in the product are 2,000 hours. The controllable variance is (E)
a. unfavorable at P350 c. favorable at P350
b. unfavorable at P3,250 d. favorable at P3,250 RPCPA 1078 7. ABC Company has prepared the following flexible budget for production costs: total production costs = $340,000 + $9x, where x is the number of units produced. ABC produced 20,000 units at a total cost of $490,000.
The variance of actual costs from budgeted costs was (E) a. $150,000 favorable. c. $30,000 unfavorable.
b. $30,000 favorable. d. $90,000 unfavorable. D, L & H 9e 47. Monroe Company has prepared the following flexible budget for production costs: total production costs = $840,000 + $16x, where X is the number of units produced. Monroe produced 20,000 units at a total cost of
$1,290,000. The variance of actual costs from budgeted costs was (E) a. $450,000 favorable. c. $130,000 unfavorable.
b. $130,000 favorable. d. $450,000 unfavorable. D, L & H 9e
123. Samuel Company provided the following data for June production activity.
Samuel uses a two-way analysis of overhead variances.
Actual variable factory overhead incurred $294,000 Variable factory overhead rate per DLH $6.00
Standard DLH allowed 49,500
Actual DLH 48,000
The budget (controllable) variance for June, assuming that budgeted fixed overhead costs equal actual fixed costs, is (M)
A. $3,000 favorable. C. $9,000 favorable.
B. $6,000 unfavorable. D. $9,000 unfavorable. Gleim
*. Roig Enterprises manufactures different types of aluminum products for different industries. Standard cost accounting systems are used. The following data are available:
Actual total overhead P40,000
Budgeted fixed costs P10,200
Total overhead application rate per standard direct labor hourP 2.50
Actual hours used 13,980
Normal activity in hours 12,000
Standard hours allowed 15,000
The company uses a two-way analysis of overhead variances.
The controllable variance of Roig Enterprises is (M)
a. P2,500 favorable c. P5,050 favorable
b. P2,550 unfavorable d. P5,050 unfavorable RPCPA 0581
*. Beacon Company manufactures various types of plastic and rubber coated tubing products for various industries. Standard cost accounting system is used. The following are available:
Actual total overhead P 44,000
Budgeted fixed costs P 12,600
Total overhead application rate per standard direct labor hourP 2.50
Actual hours used 16,000
Standard hours allowed 17,000
Normal activity in hours 14,000
The company uses a two-way analysis of overhead variances.
The controllable variance of Beacon Company is (M)
a. P1,500 favorable. c. P4,200 favorable.
b. P1,500 unfavorable. d. P4,200 unfavorable. RPCPA 1080
124. Universal Company uses a standard cost system and prepared the following budget at normal capacity for the month of January:
Direct labor hours 24,000
Variable factory O/H $48,000
Fixed factory O/H $108,000
Total factory O/H per DLH $6.50
Actual data for January were as follows:
Direct labor hours worked 22,000
Total factory O/H $147,000
Standard DLH allowed for capacity attained 21,000 Using the two-way analysis of O/H variances, what is the budget (controllable) variance for January? (M)
a. $3,000 favorable. c. $9,000 favorable.
b. $13,500 unfavorable. d. $10,500 unfavorable. CPA 0583 I-39
125. Wheeler Company uses a standard-cost system. Wheeler prepared the following budget using normal capacity for the month of May:
Direct labor hours 36,000
Variable factory overhead $72,000
Fixed factory overhead $162,000
Actual results were as follows:
Direct labor hours worked 33,000
Total factory overhead $220,500
Standard DLH allowed for capacity attained 31,500 What is the budget (controllable) variance for May using the two-way analysis of overhead variances? (M)
A. $4,500 favorable. C. $7,500 unfavorable.
B. $7,500 favorable. D. $13,500 unfavorable. Gleim 90. Martin Company uses a two-way analysis of overhead variances. Selected
data for the April production activity are as follows:
Actual variable OH incurred $196,000
Variable OH rate per MH $6
Standard MHs allowed 33,000
Actual MHs 32,000
Assuming that budgeted fixed overhead costs are equal to actual fixed costs, the controllable variance for April is
a. $2,000 F. c. $4,000 F.
b. $4,000 U. d. $6,000 F. Barfield
126. J. R. Richard Company employs a standard absorption system for product costing. The standard cost of its product is as follows:
Direct materials $14.50
Direct labor (2 direct labor hours x $8) 16.00 Manufacturing overhead (2 direct labor hours x $11) 22.00
Total standard cost $52.50
The manufacturing overhead rate is based upon a normal activity level of 600,000 direct labor hours. Richard planned to produce 25,000 units each month during the year. The budgeted annual manufacturing overhead is:
Variable $3,600,000
Fixed 3,000,000
$6,600,000 During November, Richard produced 26,000 units. Richard used 53,500 direct labor hours in November at a cost of $433,350. Actual manufacturing overhead for the month was $250,000 fixed and $325,000 variable.
The manufacturing overhead controllable variance for November is (M) A. $9,000 unfavorable C. $9,000 favorable
B. $13,000 unfavorable D. $4,000 favorable CMA adapted Questions 1 & 2 are based on the following information. CIA adapted.
A company's only service department provides the following data:
Service Center Monthly
It serves three producing departments that show the following budgeted and actual cost and service-hours data:
Carpenter Shop Department
No. Estimated Services Required Actual Services Used
1 350 hrs. 600 hrs.
2 800 hrs. 750 hrs.
3 450 hrs. 650 hrs.
127. The sold-hour rate for the carpenter shop is:
A. $29.88 C. $25.00
B. $20.00 D. $23.90
128. The spending variance for the carpenter shop, assuming that 80% of the budgeted expense is fixed, is:
A. $5,800 unfav. C. $5,800 fav.
B. $7,800 unfav. D. $7,800 fav.
Volume Variance
*. Roig Enterprises manufactures different types of aluminum products for different industries. Standard cost accounting systems are used. The following data are available:
Actual total overhead P40,000
Budgeted fixed costs P10,200
Total overhead application rate per standard direct labor hourP 2.50
Actual hours used 13,980
Normal activity in hours 12,000
Standard hours allowed 15,000
The company uses a two-way analysis of overhead variances.
The volume variance of Roig Enterprises is (M)
a. P2,550 favorable c. P9,990 favorable
b. P2,550 unfavorable d. P9,990 unfavorable RPCPA 0581
*. The following data were gathered from the Paliwas Company’s overhead costs for the January, 1983 production activity:
Actual total overhead incurred P112,500
Budgeted fixed overhead P 40,500
Standard direct-labor hours allowed for actual production 15,000 Standard fixed overhead rate per direct-labor hour P2.25 Standard variable overhead rate per direct-labor hour P3.25 Paliwas Company has been maintaining a standard absorption and flexible budgeting system. It also uses the two-variance method (two-way) for overhead variances. What is Paliwas volume (denominator) variance for January, 1983? (M)
a. P6,750 favorable c. P8,250 favorable
b. P6,750 unfavorable d. P8,250 unfavorable RPCPA 1083
*. Beacon Company manufactures various types of plastic and rubber coated tubing products for various industries. Standard cost accounting system is used. The following are available:
Actual total overhead P 44,000
Budgeted fixed costs P 12,600
Total overhead application rate per standard direct labor hourP 2.50
Actual hours used 16,000
Standard hours allowed 17,000
Normal activity in hours 14,000
The company uses a two-way analysis of overhead variances.
The volume variance of Beacon Company is (M)
a. P2,700 favorable. c. P7,500 favorable.
b. P2,700 unfavorable. d. P7,500 unfavorable. RPCPA 1080 Budgeted Capacity
*. JKL Co. has total budgeted fixed costs of P75,000. Actual production of 19,500 units resulted in a $3,000 favorable volume variance. What normal capacity was used to determine the fixed overhead rate? (M)
a. 18,750 c. 17,590
b. 20,313 d. 16,500 RPCPA 1001
*. Eastern Co. has total budgeted fixed costs of $150,000. Actual production of 39,000 units resulted in a $6,000 favorable volume variance. What normal capacity was used to determine the fixed overhead rate? (M)
a. 33,000 c. 40,560
b. 37,500 d. 40,625 D, L & H 9e
49. Western Co. has total budgeted fixed costs of $72,000. Actual production of 5,500 units resulted in a $6,000 unfavorable volume variance. What normal capacity was used to determine the fixed overhead rate? (M)
a. 5,000 c. 6,000
b. 5,500 d. 5,077 D, L & H 9e
Budgeted Fixed Overhead Costs
41. Western Company has a standard fixed cost of $8 per unit. At an actual production of 8,000 units a favorable volume variance of $12,000 resulted.
What were total budgeted fixed costs? (E)
a. $52,000 c. $76,000
b. $64,000 d. $80,000 D, L & H 9e
37. Alpha Company has a standard fixed cost of $10 per unit. At an actual production of 16,000 units an unfavorable volume variance of $20,000 resulted. What were total budgeted fixed costs? (E)
a. $140,000 c. $180,000
b. $160,000 d. $150,000 D, L & H 9e
32. Web Company uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of machine hours.
During February, the company used a denominator activity of 80,000 machine hours in computing its predetermined overhead rate. However, only 75,000 standard machine hours were allowed for the month's actual production. If the fixed overhead volume variance for February was $6,400 unfavorable, then the total budgeted fixed overhead cost for the month was: (M)
a. $96,000. c. $100,000.
b. $102,400. d. $98,600. G & N 9e
Actual Output
38. Beta Company has a standard fixed cost of $10 per unit using a normal capacity of 11,000 units. An unfavorable volume variance of $12,000 resulted. What was the volume produced? (E)
a. 9,800 c. 12,200
b. 11,000 d. 10,000 D, L & H 9e
48. Sigma Company has a standard fixed cost of $18 per unit using a normal capacity of 9,000 units. A favorable volume variance of $18,000 resulted.
What was the volume produced? (E)
a. 8,000 c. 10,000
b. 9,000 d. 9,500 D, L & H 9e
Budget and Volume Variance Actual Overhead
. The MABINI CANDY FACTORY has the following budgeted factory overhead costs:
Budgeted fixed monthly factory overhead costs P85,000 Variable factory overhead P4.00 per direct labor hour For the month of January, the standard direct labor hours allowed were 25,000. An analysis of the factory overhead shows that in January, the factory had an unfavorable budget (controllable) variance of P3,500 and a favorable volume variance of P1,200. The factory uses a two-way analysis of factory overhead variances.
The actual factory overhead incurred in January was (M)
a. P186,200 c. P181,500
b. P188,500 d. P103,500 RPCPA 0589
Applied Overhead
40. OPAL Co. uses the two-way variance analysis for overhead performance.
The budgeted factory overhead includes monthly fixed costs of P1,200,000 plus variable costs of P96 per direct labor hour. Total standard direct labor hours allowed for the May, 19x8 production was 43,200 hours. Analysis showed that, in May, 19x8, the controllable variance of P24,000 is unfavorable while the volume variance of P12,000 is favorable. How much was the applied factory overhead in May 19x8? (M)
a. P5,335,200 c. P5,359,200
b. P5,347,200 d. P5,371,200 RPCPA 0598
. The MABINI CANDY FACTORY has the following budgeted factory overhead costs:
Budgeted fixed monthly factory overhead costs P85,000 Variable factory overhead P4.00 per direct labor hour For the month of January, the standard direct labor hours allowed were 25,000. An analysis of the factory overhead shows that in January, the factory had an unfavorable budget (controllable) variance of P3,500 and a favorable volume variance of P1,200. The factory uses a two-way analysis of factory overhead variances.
The applied factory overhead in January was (M)
a. P188,500 c. P186,200
b. P183,800 d. P103,500 RPCPA 0589
Comprehensive
Questions 116 through 118 are based on the following information. L.J.
McCarthy
Patie Company uses a standard FIFO, process-cost system to account for its only product, Mituea. Patie has found that direct machine hours (DMH) provide the best estimate of the application of O/H. Four (4) standard direct machine hours are allowed for each unit.
Using simple linear regression analysis in the form y = a + b(DMH), given that (A) equals fixed costs and (B) equals variable costs, Patie has developed the
following O/H budget for a normal activity level of 100,000 direct machine hours:
ITEM (y) a b
Supplies $ 0.50
Indirect Labor $ 54,750 6.50
Depreciation -- Plant and Equipment 27,000 Property Taxes and Insurance 32,300
Repairs and Maintenance 14,550 1.25
Utilities 3,400 4.75
Total O/H $132,000 $13.00
Actual fixed O/H incurred was $133,250, and actual variable O/H was
$1,225,000. Patie produced 23,500 equivalent units during the year using 98,700 direct machine hours.
129. What is the standard O/H rate? (M)
A. $13.00 per DMH. C. $14.32 per DMH.
B. $1.32 per DMH D. $13.76 per DMH.
130. How much O/H should be applied to production? (M)
A. $1,413,384 C. $1,358,250
B. $1,432,000 D. $1,346,080
131. What is the total O/H variance? (M)
A. $12,170 unfavorable. C. $55,134 favorable.
B. $55,134 unfavorable. D. $73,750 favorable.
Predetermined Overhead Rate and Applied Overhead
Questions 81 & 82 are based on the following information. G & N 9e A manufacturer of industrial equipment has a standard costing system based on machine-hours (MHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:
Denominator level of activity ... 3,900 MHs Overhead costs at the denominator activity level:
Variable overhead cost ... $33,345 Fixed overhead cost ... $61,425 The following data pertain to operations for the most recent period:
Actual hours 3,900 MHs
Standard hours allowed for the actual output 3,952 MHs
Actual total variable overhead cost $32,565
Actual total fixed overhead cost $60,675
81. What is the predetermined overhead rate to the nearest cent? (M)
a. $23.91 c. $24.30
b. $24.30 d. $23.91
82. How much overhead was applied to products during the period to the nearest dollar? (M)
a. $93,240 c. $96,034
b. $94,770 d. $94,770
Questions 83 & 84 are based on the following information. G & N 9e
A manufacturer of industrial equipment has a standard costing system based on direct labor-hours (DLHs) as the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:
Denominator level of activity 8,000 DLHs
Overhead costs at the denominator activity level:
Variable overhead cost $56,400
Fixed overhead cost $100,800
The following data pertain to operations for the most recent period:
Actual hours 7,800 DLHs
Standard hours allowed for the actual output 7,735 DLHs
Actual total variable overhead cost $54,210
Actual total fixed overhead cost $100,200
83. What is the predetermined overhead rate to the nearest cent? (M)
a. $19.30 c. $19.80
132. Cara Williams, a supervisor, controls her department's costs. The following data relate to her department for the month of June:
Factory Overhead Budgeted Actual
Variable $100,000 $106,250
Fixed 31,250 33,750
What was the department's total spending variance for June? (E)
A. $8,750 U. C. $3,750 F.