1. All Urban Company produces a product requiring 4 pounds of material costing $

Question

1. All Urban Company produces a product requiring 4 pounds of material costing $3 per pound. During December, All Urban purchased 4,200 pounds of material for $11,970 and used the material to produce 500 products. What was the materials price variance for December?

a)$630 F

b)$480 F

c) $120 U

d)$600 U

2. Dillon has a standard of 1.5 pounds of materials per unit, at $2 per pound. In producing 2,000 units, Dillon used 3,100 pounds of materials at a total cost of $6,045. Dillon's materials price variance is

$350 F.

$45 U.

$155 F.

3. Dillon has a standard of 2 hours of labor per unit, at $18 per hour. In producing 2,000 units, Dillon used 3,850 hours of labor at a total cost of $70,455. Dillon's labor quantity variance is

$2,895 F.

$1,155 U.

$1,555 F.

$2,700 F.

4. The predetermined overhead rate for Zane Production Company is $10, comprised of a variable overhead rate of $6 and a fixed rate of $4. The amount of budgeted overhead costs at normal capacity of $300,000 was divided by normal capacity of 30,000 direct labor hours, to arrive at the predetermined overhead rate of $10. Actual overhead for June was $17,800 variable and $10,800 fixed, and 1,500 units were produced. The direct labor standard is 2 hours per unit produced. The total overhead variance is

$1,400 U.

$3,600 U.

$3,600 F.

$1,400 F.

5. Budgeted overhead for Cinnabar Industries at normal capacity of 30,000 direct labor hours is $4.50 per hour variable and $3 per hour fixed. In May, $232,500 of overhead was incurred in working 31,500 hours when 32,000 standard hours were allowed. The overhead controllable variance is

$3,750 favorable.

$7,500 favorable.

$7,500 unfavorable.

$1,500 favorable.

6. Budgeted overhead for Cinnabar Industries at normal capacity of 30,000 direct labor hours is $4.50 per hour variable and $3 per hour fixed. In May, $232,500 of overhead was incurred in working 31,500 hours when 32,000 standard hours were allowed. The overhead volume variance is

$6,000 favorable.

$8,250 favorable.

$3,750 favorable.

$7,500 favorable.

$350 F.

Explanation / Answer

1.) Price Variance=(Actual unit cost - Standard unit cost) * Actual Quantity Purchased=(11970/4200-3)*4200=-630

So correct option is a) $630F

2.) Price Variance=(Actual unit cost - Standard unit cost) * Actual Quantity Purchased=(6045/3100-2)*3100=-155

So correct option is c $155F

3.) Labour Quantity Variance=(Actual hours- Standard hours) * Standard Hourly Rate=(3850-2*2000)*18=-2700

So correct option is d $2700F

4.) TOTAL vARIANCE=Actual Factory Overhead - Standard Factory Overhead=

= (17800+10800)-1500*2*10=28600-30000=-1400

So corerct option is d $1400 F

5.) Overhead Controllable Variance = Actual Factory Overhead - Budgeted Allowance based on standard hours =

232500 - Standard Hours * Budgeted Variable Overhead Rate - Budgeted Fixed Overhead=232500-32000*4.5 - 90000 = -1500

Correct Option is d $1500 F

6.) [Factory overhead volume variance = Budgeted allowance based on standard hours allowed*

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