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CMA Part 1 – Section C – 06 – Manufacturing Input Variances — Overhead – Quiz 02

1. Question ID: CMA.P1.C.MIVO.02.02

Water Control Inc. manufactures water pumps and uses a standard cost system. The standard factory overhead costs per water pump are based on direct labor hours and are as follows:

Variable overhead (4 hours at $8/hour) – $32
Fixed overhead (4 hours at $5/hour*) – $20
Total overhead cost per unit – $52
* Based on a capacity of 100,000 direct labor hours per month.

The following additional information is available for the month of November:

22,000 pumps were produced although 25,000 had been scheduled for production.
94,000 direct labor hours were worked at a total cost of $940,000.
The standard direct labor rate is $9 per hour.
The standard direct labor time per unit is 4 hours.
Variable overhead costs were $740,000.
Fixed overhead costs were $540,000.

The variable overhead efficiency variance for November was

A.  
B.  
C.  
D.  

Question 1 of 10

2. Question ID: CMA.P1.C.MIVO.02.01

Water Control Inc. manufactures water pumps and uses a standard cost system. The standard factory overhead costs per water pump are based on direct labor hours and are as follows:

Variable overhead (4 hours at $8/hour) – $32
Fixed overhead (4 hours at $5/hour*) – $20
Total overhead cost per unit – $52
* Based on a capacity of 100,000 direct labor hours per month.

The following additional information is available for the month of November:

22,000 pumps were produced although 25,000 had been scheduled for production.
94,000 direct labor hours were worked at a total cost of $940,000.
The standard direct labor rate is $9 per hour.
The standard direct labor time per unit is 4 hours.
Variable overhead costs were $740,000.
Fixed overhead costs were $540,000.

The variable overhead spending variance for November was

A.  
B.  
C.  
D.  

Question 2 of 10

3. Question ID: CMA.P1.C.MIVO.02.05

An organization that specializes in reviewing and editing technical magazine articles sets the following standards for evaluating the performance of the professional staff:

  • Annual budgeted fixed costs for normal capacity level of 10,000 articles reviewed and edited: $600,000
  • Standard professional hours per 10 articles: 200 hours
  • Flexible budget of standard labor costs to process 10,000 articles: $10,000,000

The following data apply to the 9,500 articles that were actually reviewed and edited during the current year:

  • Total hours used by professional staff: 192,000 hours
  • Variable costs: $9,120,000
  • Total cost: $9,738,000

The fixed cost spending variance for the year is:

A.  
B.  
C.  
D.  

Question 3 of 10

4. Question ID: CMA.P1.C.MIVO.02.10

If overhead is applied on the basis of units of the activity base actually used for the actual output, the variable overhead efficiency variance will be:
A.  
B.  
C.  
D.  

Question 4 of 10

5. Question ID: CMA.P1.C.MIVO.02.07

Franklin Glass Works’ production budget for the year ended November 30 was based on 200,000 units. Each unit requires two standard hours of labor for completion. Total overhead was budgeted at $900,000 for the year, and the fixed overhead rate was estimated to be $3.00 per unit. Both fixed and variable overhead are assigned to the product on the basis of direct labor hours. The actual data for the year ended November 30 are presented as follows.

Actual production in units198,000
Actual direct labor hours440,000
Actual variable overhead$352,000
Actual fixed overhead$575,000

Franklin’s fixed overhead spending variance for the year is:

A.  
B.  
C.  
D.  

Question 5 of 10

6. Question ID: CMA.P1.C.MIVO.02.04

Nanjones Company manufactures a line of products distributed nationally through wholesalers. Presented below are planned manufacturing data for the year and actual data for November of the current year. The company applies overhead based on planned machine hours using a predetermined annual rate.

Planning Data
 AnnualNovember
Fixed manufacturing overhead$1,200,000$100,000
Variable manufacturing overhead2,400,000220,000
Direct labor hours48,0004,000
Machine hours240,00022,000
Data for November
Direct labor hours (actual)4,200 
Direct labor hours (plan based on output)4,000 
Machine hours (actual)21,600 
Machine hours (plan based on output)21,000 
Fixed manufacturing overhead$101,200 
Variable manufacturing overhead$214,000 

The fixed overhead volume variance for November was

A.  
B.  
C.  
D.  

Question 6 of 10

7. Question ID: CMA.P1.C.MIVO.02.06

Franklin Glass Works’ production budget for the year ended November 30 was based on 200,000 units. Each unit requires two standard hours of labor for completion. Total overhead was budgeted at $900,000 for the year, and the fixed overhead rate was estimated to be $3.00 per unit. Both fixed and variable overhead are assigned to the product on the basis of direct labor hours. The actual data for the year ended November 30 are presented as follows.

Actual production in units198,000
Actual direct labor hours440,000
Actual variable overhead$352,000
Actual fixed overhead$575,000

Franklin’s fixed overhead volume variance for the year is

A.  
B.  
C.  
D.  

Question 7 of 10

8. Question ID: CMA.P1.C.MIVO.02.08

Franklin Glass Works’ production budget for the year ended November 30 was based on 200,000 units. Each unit requires two standard hours of labor for completion. Total overhead was budgeted at $900,000 for the year, and the fixed overhead rate was estimated to be $3.00 per unit. Both fixed and variable overhead are assigned to the product on the basis of direct labor hours. The actual data for the year ended November 30 are presented as follows.

Actual production in units198,000
Actual direct labor hours440,000
Actual variable overhead$352,000
Actual fixed overhead$575,000

Franklin’s variable overhead spending variance for the year is:

A.  
B.  
C.  
D.  

Question 8 of 10

9. Question ID: CMA.P1.C.MIVO.02.03

Tiny Tykes Corporation had the following activity relating to its fixed and variable overhead for the month of July.

Actual costs 
Fixed overhead$120,000
Variable overhead80,000
 
Flexible budget
Variable overhead90,000
 
Applied costs
Fixed overhead125,000
 
Variable overhead spending variance2,000F
Production volume variance5,000U

The fixed overhead efficiency variance is

A.  
B.  
C.  
D.  

Question 9 of 10

10. Question ID: CMA.P1.C.MIVO.02.09

Franklin Glass Works’ production budget for the year ended November 30 was based on 200,000 units. Each unit requires two standard hours of labor for completion. Total overhead was budgeted at $900,000 for the year, and the fixed overhead rate was estimated to be $3.00 per unit. Both fixed and variable overhead are assigned to the product on the basis of direct labor hours. The actual data for the year ended November 30 are presented as follows.

Actual production in units198,000
Actual direct labor hours440,000
Actual variable overhead$352,000
Actual fixed overhead$575,000

Franklin’s variable overhead efficiency variance for the year is

A.  
B.  
C.  
D.  

Question 10 of 10


 

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