Question: The following standards for variable overhead have been established for a company that makes only one product: 4.5 hours Standard hours per unit of output Standard variable overhead rate $16 per hour The following data pertain to operations for the last month: Actual hours 8,200 hours Actual total variable overhead cost $ 1,25,000 Actual output 1,810 units A. What is the variable overhead rate variance for the month? B. What is the variable overhead efficiency variance for the month? Rhed Kennel uses tenant days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant day. During December, the kennel budgeted for 4,550 tenant days, but its actual level of activity was 4,500 tenant days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for December:Data used in budgeting: Fixed element per month Variable element per tenant- dav Revenue $ 35.60 Wages and salaries $ 3,900 $ 9.40 Food and supplies $2,250 $ 14.60 Facility expenses $ 9,900 $ 6.10 Administrative $7,900 $ 0.70 Total expenses $ 23,950 $ 30.80 Actual results for December: Revenue $ 1,59,355 Wages and salaries $ 46,485 Food and supplies $ 66,835 Facility expenses $ 37,535 Administrative expenses $9,865 The activity variance for administrative expenses in December would be: a. $35 U b. $1,220 U c. $35 F d. $1,220 F
Question: The following standards for variable overhead have been established for a company that makes only one product: 4.5 hours Standard hours per unit of output Standard variable overhead rate $16 per hour The following data pertain to operations for the last month: Actual hours 8,200 hours Actual total variable overhead cost $ 1,25,000 Actual output 1,810 units A. What is the variable overhead rate variance for the month? B. What is the variable overhead efficiency variance for the month? Rhed Kennel uses tenant days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant day. During December, the kennel budgeted for 4,550 tenant days, but its actual level of activity was 4,500 tenant days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for December:Data used in budgeting: Fixed element per month Variable element per tenant- dav Revenue $ 35.60 Wages and salaries $ 3,900 $ 9.40 Food and supplies $2,250 $ 14.60 Facility expenses $ 9,900 $ 6.10 Administrative $7,900 $ 0.70 Total expenses $ 23,950 $ 30.80 Actual results for December: Revenue $ 1,59,355 Wages and salaries $ 46,485 Food and supplies $ 66,835 Facility expenses $ 37,535 Administrative expenses $9,865 The activity variance for administrative expenses in December would be: a. $35 U b. $1,220 U c. $35 F d. $1,220 F
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question:
The following standards for variable overhead have been established for
a company that makes only one product:
4.5 hours
Standard hours per unit of output
Standard variable overhead rate
$16 per hour
The following data pertain to operations for the last month:
Actual hours
8,200 hours
Actual total variable overhead cost
$ 1,25,000
Actual output
1,810 units
A. What is the variable overhead rate variance for the month?
B. What is the variable overhead efficiency variance for the month?
Rhed Kennel uses tenant days as its measure of activity; an animal
housed in the kennel for one day is counted as one tenant day. During
December, the kennel budgeted for 4,550 tenant days, but its actual
level of activity was 4,500 tenant days. The kennel has provided the
following data concerning the formulas used in its budgeting and its
actual results for December:Data used in budgeting:
Fixed element per
month
Variable element per tenant-
dav
Revenue
$ 35.60
Wages and salaries
$ 3,900
$ 9.40
Food and supplies
$2,250
$ 14.60
Facility expenses
$ 9,900
$ 6.10
Administrative
$7,900
$ 0.70
Total expenses
$ 23,950
$ 30.80
Actual results for December:
Revenue
$ 1,59,355
Wages and salaries
$ 46,485
Food and supplies
$ 66,835
Facility expenses
$ 37,535
Administrative expenses
$9,865
The activity variance for administrative expenses in December would
be:
a. $35 U
b. $1,220 U
c. $35 F
d. $1,220 F
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