25) If Pope Inc. uses standard costing, the overhead allocated to work in process is recorded as a
A) debit to Manufacturing Overhead Allocated and a credit to Work-in-Process.
B) debit to Work-in-Process and credit to Manufacturing Overhead Control.
C) debit to Manufacturing Overhead Allocated and a credit to Manufacturing Overhead Control.
D) debit to Manufacturing Overhead Control and a credit to Manufacturing Overhead Allocated.
E) debit to Work-in-Process and a credits to Manufacturing Overhead Allocated.
26) If Miller Company makes the following journal entry:
Variable Overhead Allocated
Variable Overhead Efficiency Variance
Variable Overhead Control
Variable Overhead Rate Variance
It may be inferred that
A) Miller over-allocated variable manufacturing overhead.
B) the net variance is a $12,500 favourable rate variance.
C) actual variable manufacturing overhead costs were $62,500.
D) the journal entry accounts are incorrect.
E) the net variance is $12,500 unfavourable.
27) Which option(s) would be consistent with the proration approach for end-of-period adjustments when the underallocated or overallocated variable overhead costs are significant?
A) prorate based on the allocated overhead amount in the ending balance of work-in-process inventory and cost of goods sold
B) immediate write-off to cost of goods sold
C) prorate based on the total ending balance of variable overhead allocated and variable overhead control
D) prorate based on the allocated overhead amount in the ending balance of work-in-process inventory, finished goods inventory, and cost of goods sold
E) prorate based on the total ending balance of cost of goods sold and variable overhead control
28) Which of the following would possibly be adjusted as an end-of-period adjustment, using the adjusted allocation rate approach?
A) individual job records
B) ending work-in-process and finished goods inventories
C) cost of goods sold
D) only individual job records and ending finished goods inventory
E) ending work-in-process and finished goods inventories, individual job records, and cost of goods sold
29) The variable overhead flexible-budget variance can be further subdivided into the
A) price variance and the efficiency variance.
B) static-budget variance and sales-volume variance.
C) rate variance and production-volume variance.
D) sales-volume variance and the rate variance.
E) rate variance and the efficiency variance.
30) An unfavourable variable overhead rate variance indicates that
A) variable overhead items were used efficiently.
B) the price of variable overhead items was more than budgeted.
C) the variable overhead cost-allocation base was not used efficiently.
D) the denominator level was not accurately determined.
E) the denominator level was used more than planned.
31) When machine-hours are used as an overhead cost-allocation base, the LEAST likely cause of a unfavourable variable overhead rate variance is
A) excessive machine breakdowns.
B) the production scheduler inefficiently scheduled jobs.
C) poor coordination between sales and production resulting in displacement of normal batches by. rush orders and excessive setup times.
D) strengthened demand for the product.
E) a decrease in the cost of energy.
Answer the following question(s) using the information below.
Kellar Corporation manufactured 1,500 chairs during June. The following variable overhead data pertain to June:
Budgeted variable overhead cost per unit
Actual variable manufacturing overhead cost
Flexible-budget amount for variable manufacturing overhead
Variable manufacturing overhead efficiency variance
32) What is the variable overhead flexible-budget variance?
A) $1,200 favourable
B) $360 unfavourable
C) $840 favourable
D) $1,200 unfavourable
E) $1,560 unfavourable
33) What is the variable overhead rate variance?
A) $840 unfavourable
B) $1,200 favourable
C) $1,200 unfavourable
D) $1,560 favourable
E) $1,560 unfavourable
34) Cirilla's Weathervane Company manufactures weathervanes. The 2012 operating budget is based on the production of 10,000 weathervanes with 1.25 machine-hour allowed per weathervane. Variable manufacturing overhead is anticipated to be $300,000.
Actual production for 2012 was 11,000 weathervanes using 12,100 machine-hours. Actual variable costs were $23.75 per machine-hour.
Calculate the variable overhead rate and the efficiency variances.