41. If all four of Argo Corporation\'s overhead variances are favorable, Argo\'s
ID: 2477143 • Letter: 4
Question
41.
If all four of Argo Corporation's overhead variances are favorable, Argo's overhead will be underapplied.
True
False
42.
An unfavorable volume variance means that a firm operated at an activity level that was below the activity level planned for the period.
True
False
43.
A company has a standard cost system in which fixed and variable manufacturing overhead costs are applied to products on the basis of direct labor-hours. The company's choice of the denominator level of activity has no effect on the variable portion of the predetermined overhead rate.
True
False
44.
A volume variance is computed for:
both variable and fixed manufacturing overhead.
variable manufacturing overhead only.
fixed manufacturing overhead only.
45.
Tropiano Electronics Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company had budgeted its fixed manufacturing overhead cost at $62,100 for the month and its level of activity at 3,200 MHs. The actual total fixed manufacturing overhead was $61,600 for the month and the actual level of activity was 3,000 MHs. What was the fixed manufacturing overhead budget variance for the month to the nearest dollar?
$3,381 Unfavorable
$500 Favorable
$500 Unfavorable
Explanation / Answer
Answer to the questions
41.
If all four of Argo Corporation's overhead variances are favorable, Argo's overhead will be underapplied.
True
42.
An unfavorable volume variance means that a firm operated at an activity level that was below the activity level planned for the period.
True
43.
A company has a standard cost system in which fixed and variable manufacturing overhead costs are applied to products on the basis of direct labor-hours. The company's choice of the denominator level of activity has no effect on the variable portion of the predetermined overhead rate.
False
44.
A volume variance is computed for:
Both variable and fixed manufacturing overhead.
45.
$3381 was the fixed manufacturing overhead budget variance for the month .
Standard Overhead =(Budgeted Overhead/Budgeted Direct labor hours)*Actual direct labor hours
=62,100/3200*3000
=$58,218
Actaul Overhead=61,600
Variance=Actual-Standard for Atual
=$61,600-$58,218
=$3381.
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