PO1 STANDARD COSTS AND VARIANCE ANALYSIS
MANAGEMENT ADVISORY SERVICES STANDARD COSTS AND
NORMAL COSTING 37. Gonzales Company uses the equation $540,000 + $2
One-Way Variance to budget manufacturing overhead. Gonzalez has bu
Actual Overhead labor hours for the year. Actual results were 160,0
25. Hayward applies overhead at $5 per machine hour. During March it worked and $857,500 total manufacturing overhead. The to
10,000 hours and overapplied overhead by $3,000. Actual overhead was for the year is (E)
(E) a. $2,500 favorable. c. $2,500 unfa
a. $53,000. c. $47,000. b. $12,500 favorable. d. Some other
b. $50,000. d. none of the above. L & H 10e
Over-Applied
Budgeted Overhead 24. Palo applies overhead based on direct labor cos
17. Machine hours used to set the predetermined overhead rate were 50,000, manufacturing overhead of $500,000 and budge
actual hours were 48,000, and overhead applied was $120,000. Budgeted $250,000. Actual overhead was $525,000, actual lab
overhead for the year was Overhead was (E)
a. $115,200 c. $120,000 a. Over-applied by $15,000. c. Over-applied
b. $118,000 d. $125,000 D, L & H 9e b. Over-applied by $20,000. d. Under-applie
H 9e
42. Machine hours used to set the predetermined overhead rate were 80,000,
1
actual hours were 90,000, and overhead applied was $117,000. Budgeted . Watson Company uses a predetermined factory over
overhead for the year was based on direct labor cost. Watson's budgeted fa
a. $104,000 c. $131,625 $756,000 based on a budgeted volume of 60,000 di
b. $117,000 d. Some other number. D, L & H 9e standard direct labor rate of $7.20 per hour. Act
amounted to $775,000 with actual direct labor cos
Applied Overhead year ended December 31. How much was Watson'
48. Machine hours used to set the predetermined overhead rate were 68,000, overhead? (M)
actual hours were 64,000, and budgeted overhead was $142,800. A. $12,500 C. $19,000
Overhead applied for the year was (E) B. $18,000 D. $37,000
a. $134,400 c. $142,800
2
b. $136,500 d. $151,725 D, L & H 9e . Nil Co. uses a predetermined factory O/H application
labor cost. For the year ended December 31, Nil’s
36. Gonzalez Company uses the equation $520,000 + $2 per direct labor hour was $600,000, based on a budgeted volume of 50,0
to budget manufacturing overhead. Gonzalez has budgeted 150,000 direct at a standard direct labor rate of $6 per hour. Actual
labor hours for the year. Actual results were 150,000 direct labor hours and to $620,000, with actual direct labor cost of $325,00
$817,500 total manufacturing overhead. The total overhead applied for the applied factory O/H was (M)
year is (E) a. $20,000 c. $30,000
a. $300,000. c. $817,500. b. $25,000 d. $50,000
b. $520,000. d. $820,000. L & H 10e
CMA EXAMINATION QUESTIONS
,MANAGEMENT ADVISORY SERVICES STANDARD COSTS AND
30. Nil Co. uses a predetermined overhead rate based on direct labor cost to hours, $397,000 fixed overhead, and $194,500 var
apply manufacturing overhead to jobs. For the year ended December 31, total overhead variance for the year is (E)
Nil's estimated manufacturing overhead was $600,000, based on an a. $2,000 c. $47,000
estimated volume of 50,000 direct labor hours, at a direct labor rate of b. $3,000 d. $48,000
$6.00 per hour. Actual manufacturing overhead amounted to $620,000,
with actual direct labor cost of $325,000. For the year, manufacturing 43. Cooke Company uses the equation $450,000 + $1.50
overhead was: (M) to budget manufacturing overhead. Cooke has bud
A. overapplied by $20,000. C. overapplied by $30,000. labor hours for the year. Actual results were 156,0
B. underapplied by $22,000. D. underapplied by $30,000. G & N and $697,500 total manufacturing overhead. The to
10e for the year is
a. $4,500 favorable. c. $4,500 unfa
24. Spooner applies overhead based on direct labor cost. It had budgeted b. $18,000 favorable. d. $18,000 unf
manufacturing overhead of $50,000 and budgeted direct labor of $25,000.
Actual overhead was $52,500, actual labor cost was $27,000. Overhead 37. Gonzalez Company uses the equation $520,000 + $2
was (E) to budget manufacturing overhead. Gonzalez has bud
a. overapplied by $1,500. c. overapplied by $2,500. labor hours for the year. Actual results were 150,000
b. overapplied by $2,000. d. underapplied by $2,000.L & H 10e $817,500 total manufacturing overhead. The total o
the year is (E)
44. Antaya Company uses the equation $375,000 + $1.20 per direct labor hour a. $2,500 favorable. c. $2,500 unfa
to budget manufacturing overhead. Antaya has budgeted 75,000 direct b. $12,500 favorable. d. some other
labor hours for the year. Actual results were 81,000 direct labor hours,
3
$388,000 fixed overhead, and $98,600 variable overhead. The total . Pane Company uses a job costing system and applies
overhead variance for the year is (E) on the basis of direct labor cost. Job No. 75, the o
a. $14,400 c. $37,200 January 1, had the following costs assigned as
b. $15,600 d. $30,000. L & H 10e materials, $40,000; direct labor, $80,000; and factory
The following selected costs were incurred during the
44. Hughes Company uses the equation $375,000 + $1.20 per direct labor Traceable to jobs:
hour to budget manufacturing overhead. Hughes had budgeted 75,000 Direct materials $178,0
direct labor hours for the year. Actual results were 81,000 direct labor Direct labor 345,0
hours, $397,000 fixed overhead, and $94,500 variable overhead. The total Not traceable to jobs:
overhead variance for the year is (E) Factory materials and supplies 46,0
a. $2,700 c. $22,000 Indirect labor 235,0
b. $10,700 d. $30,000 D, L & H 9e Plant maintenance 73,0
Depreciation on factory equipment 29,0
38. Alcatraz Company uses the equation $400,000 + $1.75 per direct labor Other factory costs 76,0
hour to budget manufacturing overhead. Alcatraz has budgeted 125,000
direct labor hours for the year. Actual results were 110,000 direct labor
CMA EXAMINATION QUESTIONS
,MANAGEMENT ADVISORY SERVICES STANDARD COSTS AND
Pane's profit plan for the year included budgeted direct labor of $320,000 Actual Direct Labor Hours
and factory overhead of $448,000. Assuming no work-in-process on 30. Hoyt Company applies overhead at $6 per direct labo
December 31, Pane's overhead for the year was incurred overhead of $144,000. Under-applied overh
A. $11,000 overapplied. C. $11,000 underapplied. many direct labor hours did TYV work? (E)
B. $24,000 overapplied. D. $24,000 underapplied. CMA Samp a. 25,000 c. 23,000
Q3-5 b. 24,000 d. 22,000
Under-Applied . MNO Company applies overhead at P5 per direct
4
. The Kelley Company uses a predetermined overhead rate of $9 per direct 2001, MNO incurred overhead of P120,000. Under-a
labor hour to apply overhead. During the year, 30,000 direct labor hours P5,000. How many direct labor hours did MNO work?
were worked. Actual overhead costs for the year were $240,000. The A. 25,000 C. 24,000
overhead variance is (E) B. 22,000 D. 23,000
a. $27,000 overlapped c. $30,000 underapplied
5
b. $26,670 underapplied d. $24,000 overapplied H&M . Margolos, Inc. ends the month with a volume
unfavorable. If budgeted fixed factory O/H was $480
38. Bonds Company uses the equation $300,000 + $1.75 per direct labor hour on the basis of 32,000 budgeted machine hours, a
to budget manufacturing overhead. Bonds has budgeted 125,000 direct factory O/H was $170,000, what were the actual m
labor hours for the year. Actual results were 110,000 direct labor hours, the month? (M)
$297,000 fixed overhead, and $194,500 variable overhead. The total a. 32,424 c. 31,687
overhead variance for the year is (E) b. 32,000 d. 31,576
a. $1,000. c. $35,000
b. $48,000. d. $36,000. L & H 10e 41. Pinnini Co. uses a predetermined overhead rate based
to apply manufacturing overhead to jobs. Last ye
29. Malcolm Company uses a predetermined overhead rate based on direct incurred $225,000 in actual manufacturing o
labor hours to apply manufacturing overhead to jobs. Manufacturing Overhead account showed that overh
On September 1, the estimates for the month were: $14,500 for the year. If the predetermined overhea
Manufacturing overhead $17,000 direct labor hour, how many hours did the company
Direct labor hours 13,600 (M)
During September, the actual results were: A. 45,000 hours C. 42,100 hour
Manufacturing overhead $18,500 B. 47,900 hours D. 44,000 hour
Direct labor hours 12,000
The cost records for September will show: (E) G & N 10e 42. Parsons Co. uses a predetermined overhead rate b
A. Overapplied overhead of $1,500. C. Overapplied overhead of $3,500. hours to apply manufacturing overhead to jobs. Last
B. Underapplied overhead of $1,500. D. Underapplied overhead of $3,500. $250,000 in actual manufacturing overhead cost
Overhead account showed that overhead was overap
$12,000 for the year. If the predetermined overhea
direct labor hour, how many hours were worked durin
CMA EXAMINATION QUESTIONS
, MANAGEMENT ADVISORY SERVICES STANDARD COSTS AND
A. 31,250 hours C. 32,750 hours 29. Baxter Corporation's master budget calls for the pro
B. 30,250 hours D. 29,750 hours G & N 10e of its product monthly. The master budget inclu
$144,000 annually; Baxter considers indirect labor t
Three-Way Variance During the month of April, 4,500 units of product
Variable Overhead Spending Variance indirect labor costs of $10,100 were incurred. A
39. Bonds Company uses the equation $300,000 + $1.75 per direct labor hour utilizing flexible budgeting would report a spending
to budget manufacturing overhead. Bonds has budgeted 125,000 direct labor of: (M)
labor hours for the year. Actual results were 110,000 direct labor hours, A. $1,900 unfavorable. C. $1,900 favo
$297,000 fixed overhead, and $194,500 variable overhead. The variable B. $700 favorable. D. $700 unfavo
overhead spending variance for the year is (E)
a. $2,000. c. $47,000. Volume Variance
b. $3,000. d. $48,000. L & H 10e . ABC Company uses the equation P300,000 + P1.75 p
budget manufacturing overhead. ABC has budgeted
39. Alcatraz Company uses the equation $400,000 + $1.75 per direct labor hours for the year. Actual results were 110,000
hour to budget manufacturing overhead. Alcatraz has budgeted 125,000 P297,000 fixed overhead, and P194,500 variable ov
direct labor hours for the year. Actual results were 110,000 direct labor fixed overhead volume variance for the year? (E)
hours, $397,000 fixed overhead, and $194,500 variable overhead. The A. P35,000 unfavorable. C. P2,000 favor
variable overhead spending variance for the year is (E) B. P36,000 unfavorable. D. P3,000 favor
a. $2,000 c. $47,000
b. $3,000 d. $48,000 D, L & H 9e 41. Bonds Company uses the equation $300,000 + $1.75
to budget manufacturing overhead. Bonds has bud
45 Antaya Company uses the equation $375,000 + $1.20 per direct labor hour labor hours for the year. Actual results were 110,00
to budget manufacturing overhead. Antaya has budgeted 75,000 direct $297,000 fixed overhead, and $194,500 variable
labor hours for the year. Actual results were 81,000 direct labor hours, overhead volume variance for the year is (E)
$388,000 fixed overhead, and $98,600 variable overhead. The variable a. $39,000. c. $33,000.
overhead spending variance for the year is (E) b. $3,000. d. $36,000.
a. $1,400 c. $37,200.
b. $8,600 d. $15,600. L & H 10e 47. Antaya Company uses the equation $375,000 + $1.20
to budget manufacturing overhead. Antaya has bu
45. Hughes Company uses the equation $375,000 + $1.20 per direct labor labor hours for the year. Actual results were 81,00
hour to budget manufacturing overhead. Hughes had budgeted 75,000 $388,000 fixed overhead, and $98,600 variable
direct labor hours for the year. Actual results were 81,000 direct labor overhead volume variance for the year is (E)
hours, $397,000 fixed overhead, and $94,500 variable overhead. The a. $1,400. c. $15,600.
variable overhead spending variance for the year is (E) b. $13,000. d. $30,000.
a. $2,700 c. $22,000
b. $10,700 d. $30,000 D, L & H 9e 47. Hughes Company uses the equation $375,000 + $
hour to budget manufacturing overhead. Hughes
CMA EXAMINATION QUESTIONS
