18. MULTIPLE CHOICE 10-63 rates using practical volume, which is 288,000 units.
ID: 2521698 • Letter: 1
Question
18. MULTIPLE CHOICE 10-63 rates using practical volume, which is 288,000 units. The standard cost system Lewis Company calculates its allows 2 direct labor hours per unit produced. Overhead is applied using direct labor hours.The total budgeted overhead is $3,168,000, of which $864,000 is fixed overhead. The actual results for the year are as follows Units produced: 280,000 Direct labor: 570,000 hours @$9 Variable overhead: $2,320,000 Fixed overhead: $872,000 Calculate the applied fixed overhead. Oa. $910,000 Ob. None of these choices is correct. Oc. $840,000 Od. $855,000 e. $864,000 19. MULTIPLE CHOICE 10-64 rates using practical volume, which is 288,000 units. The standard cost system Lewis Company calculates its allows 2 direct labor hours per unit produced. Overhead is applied using direct labor hours.The total budgeted overhead is $3,168,000, of which $864,000 is fixed overhead. The actual results for the year are as follows Units produced: 280,000 Direct labor: 570,000 hours @$9 Variable overhead: $2,320,000 Fixed overhead: $872,000 Calculate the fixed overhead spending variance. Oa. $32,000u b. $8,000 F Oc. $0 Od·$8,000 U Oe. $32,000 F 20. MULTIPLE CHOICE 10-65 rates using practical volume, which is 288,000 units. The standard cost system Lewis Company calculates its allows 2 direct labor hours per unit produced. Overhead is applied using direct labor hours.The total budgeted overhead is $3,168,000, of which $864,000 is fixed overhead. The actual results for the year are as follows Units produced: 280,000 Direct labor: 570,000 hours @$9 Variable overhead: $2,320,000 Fixed overhead: $872,000 Calculate the fixed overhead volume variance. a. None of these choices is correct. Ob. $24,000F http://east.instructor.cengagenow.com/ilrn/bca/instr/test-printing/376965427/html-print?sel. 4/19/2010 Quick View Page 9 of 19 Oc. $8,000 U Od. $32,000u Oe. $32,000FExplanation / Answer
Problem 18.
Let us first calculate budgeted fixed overhead rate per hour.
Budgeted hours = Budgeted Volume x Direct Labour Hours per unit
= 288,000 x 2 = 576,000 hours
Budgeted Fixed Overhead Rate per hour = Budgeted fixed oveheads / Budget Volume
= 864,000 / 576,000
= 1.5 per hour
Applied Fixed Overhead = Standard Hours required to produce actual output x Budgeted Fixed Overhead Rate per hour
= (280,000 x 2) x 1.5
= 840,000
Therefore, the correct answer is option c. $840,000
Problem 19.
Fixed Overhead spending variance = Actual fixed overhead - Budgeted fixed overhead
= 872,000 - 864,000
= 8,000 Unfavorable
Therefore, the correct answer is option d. $8,000 U
Problem 20.
Fixed overhead volume variance = Absorbed Fixed overheads - Budgeted Fixed Overheads
=Actual Output x FOAR* - Budgeted Output x FOAR*
* Fixed Overhead Absorption Rate per unit of output
= (280,000 x 2 x 1.5) - (288,000 x 2 x 1.5)
= -24,000 or 24,000 Unfavorable
Since none of the choices contain the above answer, therefore the correct answer is option a. None of these choices is correct