31) Everjoice Company makes clocks. The fixed overhead costs for 20X5 total $720,000. The company uses direct labor-hours for fixed overhead allocation and anticipates 240,000 hours during the year for 480,000 units. An equal number of units are budgeted for each month. During June, 42,000 clocks were produced and $63,000 were spent on fixed overhead. Required: a.Determine the fixed overhead rate for 20X5 based on units of input. b.Determine the fixed overhead static-budget variance for June. c.Determine the production-volume overhead variance for June. 32) Brown Company makes watches. The fixed overhead costs for 2011 total $324,000. The company uses direct […]

3) Fixed overhead costs must be unitized for: A) financial reporting purposes B) planning purposes C) calculating the production-volume variance D) Both A and C are correct. 4) Generally Accepted Accounting Principles require that unitized fixed manufacturing costs be used for: A) pricing decisions B) costing decisions C) external reporting D) All of these answers are correct. 5) A nonfinancial measure of performance evaluation is: A) increased sales B) reducing distribution costs C) energy used per machine-hour D) All of these answers are correct. 6) Variance information regarding nonmanufacturing costs can be used to: A) plan capacity in the service […]

13) Jeremy's Football Manufacturing Company reported: Actual fixed overhead$500,000 Fixed manufacturing overhead spending variance$30,000 favorable Fixed manufacturing production-volume variance$20,000 unfavorable To isolate these variances at the end of the accounting period, Jeremy would debit Fixed Manufacturing Overhead Allocated for: A) $480,000 B) $490,000 C) $500,000 D) $510,000 14) Kristin's Basketball Manufacturing Company reported: Actual fixed overhead$800,000 Fixed manufacturing overhead spending variance$60,000 favorable Fixed manufacturing production-volume variance$40,000 favorable To isolate these variances at the end of the accounting period, Kristin would debit: A) Fixed Manufacturing Overhead Allocated for $900,000 B) Fixed Manufacturing Overhead Spending Variance for $60,000 C) Fixed Manufacturing Production-Volume […]

9) Critics of absorption costing suggest to evaluate management on their ability to: A) exceed production quotas B) increase operating income C) decrease inventory costs D) All of these answers are correct. 10) Differences between absorption costing and variable costing are much smaller when a: A) large part of the manufacturing process is subcontracted out B) just-in-time inventory strategy is implemented C) significant portion of manufacturing costs are fixed D) Both A and B are correct. 11) All of the following are examples of drawbacks of using absorption costing EXCEPT: A) management has the ability to manipulate operating income via […]

Answer the following questions using the information below: Nichols, Inc., manufactures remote controls. Currently the company uses a plant-wide rate for allocating manufacturing overhead. The plant manager believes it is time to refine the method of cost allocation and has the accounting department identify the primary production activities and their cost drivers:   ActivitiesCost driverAllocation Rate Material handlingNumber of parts$2 per part AssemblyLabor hours$20 per hour InspectionTime at inspection station$3 per minute The current traditional cost method allocates overhead based on direct manufacturing labor hours using a rate of $200 per labor hour. 24) What are the indirect manufacturing costs […]