What is the fixed overhead price variance for May

Reference no: EM132847917

Question 1 - The budget for the month of May was for 16,000 units at a direct materials cost of $31 per unit. Direct labor was budgeted at 40 minutes per unit for a total of $144,000. Actual output for the month was 10,100 units with $167,500 in direct materials and $93,775 in direct labor expense. The direct labor standard of 40 minutes was obtained throughout the month. Variance analysis of the performance for the month of May would show a(n): (CMA adapted)

a. favorable materials efficiency (quantity) variance of $9,100.

b. favorable direct labor efficiency variance of $2,875.

c. unfavorable direct labor efficiency variance of $2,875.

d. unfavorable direct labor price (rate) variance of $2,875.

Question 2 - The following information is available for the Danske Company:

Denominator hours for May 16,500

Actual hours worked during May 15,200

Standard hours allowed for May 12,600

Flexible budget fixed overhead cost $49,500

Actual fixed overhead costs for May $52,800

Danske Company had total underapplied overhead of $16,500. Additional information is as follows:

Variable Overhead: Applied based on standard direct labor hours allowed $45,000

Budgeted based on standard direct labor hours 39,500

Fixed Overhead: Applied based on standard direct labor hours allowed $33,000

Budgeted based on standard direct labor hours 28,500

What is the fixed overhead price (spending) variance for May?

a. $1,300 unfavorable

b. $3,300 Unfavorable

c. $2,600 unfavorable

d. $2,600 favorable

Question 3 - The following information is available for the Danske Company:

Denominator hours for May 12,640

Actual hours worked during May 21,600

Standard hours allowed for May 15,800

Flexible budget fixed overhead cost$140,000

Actual fixed overhead costs for May $143,000

Danske Company had total underapplied overhead of $18,800. Additional information is as follows:

Variable Overhead: Applied based on standard direct labor hours allowed $80,000

Budgeted based on standard direct labor hours 41,800

Fixed Overhead: Applied based on standard direct labor hours allowed $68,000

Budgeted based on standard direct labor hours 30,800

Is the production volume variance favorable or unfavorable?

Reference no: EM132847917

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