1.SBC Company expected to make 24,000 units of product during 2011. SBC actually produced 24,500 units of product. The fixed cost predetermined overhead rate was $2.40 per unit. Actual fixed overhead costs were $58,800. Based on this information the
a. fixed cost overhead spending variance is $1,200 unfavorable.
b. fixed cost overhead volume variance is $1,200 favorable.
c. the total overhead cost variance is $2,400 favorable.
d. both a & b.
2.Marjorie Jewels, a maker of fashionable rings, produced and sold 6,000 rings during the recent accounting period. The company had expected to sell 5,600 rings. Because of competition, the company priced the rings at $20 each, $2 lower than the budgeted selling price. Based on this information, there is
a.a favorable $8,000 sales volume variance.
b.an unfavorable $800 total sales variance.
c.an unfavorable sales price variance.
d.all of the above.
3.If the planned or expected level of activity is overstated (unreasonably high), what consequence is likely?
a.The predetermined overhead rate will be overstated.
b.Products are likely to be underpriced.
c.Products are likely to be overpriced.
d.Per unit variable overhead costs are understated.
4. Starmax Company pays workers producing the product Lotrim an average standard wage of $9 per hour. The standard amount of time required to produce a case of Lotrim is 2 hours. In January, Starmax produced 18,000 cases of Lotrim at a total actual labor cost of $323,000. During January, Starmax actually used 34,000 labor hours. Based on this information the labor usage variance is
a. $18,000 unfavorable.
b. $18,000 favorable.
c. $34,000 favorable.
d. $34,000 unfavorable.