Alex Company has a large underapplied overhead balance in the manufacturing overhead account. This could be explained by: A. an unfavorable volume variance, assuming all other variances are zero. B. a favorable volume variance, assuming all other variances are zero. C. standard hours allowed for the period's output being greater than denominator hours for the period. D. none of these

Alex Company has a large underapplied overhead balance in the manufacturing overhead account. This could be explained by: A. an unfavorable volume variance, assuming all other variances are zero. B. a favorable volume variance, assuming all other variances are zero. C. standard hours allowed for the period's output being greater than denominator hours for the period. D. none of these

Name: Alex Company has a large underapplied overhead balance in the manufact
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Description: Alex Company has a large underapplied overhead balance in the manufacturing overhead account. This could be explained by:A. an unfavorable volume variance, assuming all other variances are zero.B. a favorable volume variance, assuming all other varia

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 9DQ: At the end of the period, the factory overhead account has a credit balance of 10,000. (a) Is the...

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Which of the following statements is true? 1. The variable overhead efficiency variance does not actually measure how efficiently variable manufacturing overhead resources were used. 2. The variable overhead efficiency variance measures the difference between the actual level of activity and the standard activity allowed for the actual output, multiplied by the variable part of the predetermined overhead rate. 3. If variable manufacturing overhead is applied based on direct labor-hours, it is impossible to have a favorable labor rate variance and unfavorable variable overhead rate variance for the same period.
An unfavorable fixed overhead volume variance can be due to all of the following except a.employee inexperience b.an increase in utility costs c.machine breakdowns d.sales orders at a low level
Variable factory overhead is applied on the basis of standard direct labor hours. If, for a given period, the direct labor efficiency variance is unfavorable, the variable factory overhead efficiency variance will be favorable Zero unfavorable the same amount as the labor efficiency variance
If variable manufacturing overhead is applied to production on the basis of direct labor-hours and the direct labor efficiency variance is unfavorable, will the variable overhead efficiency variance be favorable or unfavorable, or could it be either? Explain.
Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 175,000 items were shipped to customers using 7,400 direct labor-hours. The company incurred a total of $24,790 in variable overhead costs. k According to the company's standards, 0.04 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.40 per direct labor-hour. nt Required: 1. What is the standard labor-hotfs allowed (SH) to ship 175,000 items to customers? 2. What is the standard variable overhead cost allowed (SH x SR) to ship 175,000 items to customers? 3. What is the variable overhead spending…
TRUE OR FALSE Production volume variance appears whenever actual production deviates from the expected volume of production used in computing the fixed factory overhead.
11) Which of the following would produce a labor rate variance? Group of answer choices a) Poor quality materials causing breakage and work interruptions b)Excessive number of hours worked in completing a job. c)Use of persons with high hourly wage rates in tasks that call for low hourly wage rates. d)An unfavorable variable overhead rate variance.
Which of the following statements about fixed overhead variances is FALSE? An unfavorable volume variance means that a firm’s production facilities were under-utilized by producing less units of products than budgeted. Fixed overhead variances consist of a budget variance and a volume variance. The volume variance is a measure of facility utilization. The budget variance represents the difference between the original budgeted fixed overhead cost and the applied fixed overhead cost during a period.
Which of the following statements is incorrect with regards to production variances? Select one: a. Direct material variances are concerned with both the purchasing and the production functions of a company’s manufacturing operations. b. Use of laborers with high hourly wage rates for production activities requiring low hourly wages rate laborers would result in an unfavorable labor rate variance. c. A favorable direct material price variance would yield a negative number. d. The direct labor rate variance and the direct labor efficiency variance add up to the total direct labor variance. e. The quantity used for a given level of output (standard quantity allowed) is used to determine the direct materials price variance. PreviousSave AnswersNext
A company product has used more material to produce than the standard amount but takes fewer labor hours. Which of the following statements is correct? A.The materials variance is favorable and the labor variance is unfavorable. B.Both the materials and labor variances are unfavorable. C.The materials variance is unfavorable and the labor variance is favorable. D.Both the materials and labor variances are favorable.
Which of the following would produce a labor rate variance? A. Poor quality materials causing breakage and work interruptions.B. Use of persons with high hourly wage rates in tasks that call for low hourly wage rates.C. Excessive number of hours worked in completing a job.D. An unfavorable variable overhead spending variance.
A favorable overhead spending variance means that:a. Overhead has been overapplied.b. Overhead has been underapplied.c. Actual production was less than the normal volume ofoutput.d. None of the above.