An unfavorable overhead volume varlance Indicates: Multiple Choice The actual variable overhead rate was less than the standard rate. The actual variable overhead rate was greater than the standard rate. Actual production was less than budgeted. Actual production was more than budgeted.

An unfavorable overhead volume varlance Indicates: Multiple Choice The actual variable overhead rate was less than the standard rate. The actual variable overhead rate was greater than the standard rate. Actual production was less than budgeted. Actual production was more than budgeted.

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Description: An unfavorable overhead volume variance Indicates:Multiple ChoiceThe actual variable overhead rate was less than the standard rate.The actual variable overhead rate was greater than the standard rate.Actual production was less than budgeted.Actual p

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A production volume variance will exists when: Production volume differs from the sales volume. Actual direct labor hours differ from standard allowed direct labor hours The fixed overhead applied on the basis of standard allowed direct labor hours differs from actual fixed factory overhead. The fixed overhead applied on the basis of standard allowed direct labor hours differs from budgeted fixed factory overhead.
[S1] An unfavorable materials quantity variance occurs when the actual quantity used in production is less than the standard quantity allowed for the actual output of the period. [S2] If variable manufacturing overhead is applied based on direct labor-hours, it is impossible to have a favorable labor efficiency variance and unfavorable variable overhead efficiency variance for the same period. Only S1 is true Only S2 is true Both statements are true. Both statements are false.
Which one of the following would not explain an adverse direct labor efficiency variance? A. Poor scheduling of direct labor hours. B. Unusually lengthy machine breakdowns. C. Setting standard efficiency at a level that is too low. D. A reduction in direct labor training.
Which of the following statements about fixed overhead variances is FALSE? An unfavorable volume variance means that a firm’s production facilities were under-utilized by producing less units of products than budgeted. Fixed overhead variances consist of a budget variance and a volume variance. The volume variance is a measure of facility utilization. The budget variance represents the difference between the original budgeted fixed overhead cost and the applied fixed overhead cost during a period.
1. What are the three primary reasons of using a standard cost system? In a business that routinely manufactures the same products or performs the same services, why are standards helpful? 2. What are ideal standards? What are currently attainable standards? Explain which standard is usually adopted and why. 3. Some people suggest that the direct labor rate variance is never controllable. Do you agree or disagree? Give reasons to support your answer.
If a company uses predetermined rate for absorption of manufacturing overhead, the volume variance is O The under- or over-applied fixed cost element of overhead. O The difference between budgeted cost and actual cost of variable overhead items. O The difference between budgeted cost and actual cost of fixed overhead items. O The under- or over-applied variable cost element of overhead.
Select all that were the source for the Indirect Costs favorable efficiency variance. a. Actual indirect costs per direct labor hour was less than budgeted indirect cost per direct labor hour. b. Actual indirect costs per direct labor hour was greater than budgeted indirect cost per direct labor hour. c. Actual number of jobs completed was less than budgeted number of jobs. d. Actual number of jobs completed was greater than budgeted number of jobs. e. Actual number of direct labor hours per job was less than budgeted direct labor hours per job. f. Actual number of direct labor hours per job was greater than budgeted direct labor hours par job. QUESTION 5 Select all that were the source for the Sales Activity favorable variance. a. Actual number of units completed was greater than budgeted number of units. b. Actual selling price per unit was less than budgeted. c. Actual number of units completed was less than budgeted number of units. d. Actual selling price per unit was greater than…
which of the following is a possible cause of an unfavorable labor efficiency variance? A. hiring substandard workers B. making to many units C. buying higher-quality material D. paying too much for workers
If a purchasing manager is able to buy direct materials required in the manufacturing of a product at a lower than ‘standard’ cost why may this result in an overall unfavorable total variance for DM’s.
Which one is the correct answer?
Which of the following statements are true? a. The standard price of materials should include delivery charges and any discounts. b. In general, the production manager is responsible for the materials price variance. C. An unfavorable materials quantity variance occurs when the actual quantity used in production is less than the standard quantity allowed for the actual output of the period. d. If skilled workers with high hourly rates of pay are given duties that require little skill and call for lower hourly rates of pay, this will result in a favorable labor rate variance. e. If variable manufacturing overhead is applied based on direct labor-hours, it is impossible to have a favorable labor efficiency variance and unfavorable variable overhead efficiency variance for the same period. O Statements b. and d. Statement c. O Statements a. and e. O None of the statements Statements d. and e.