Accounting: Actual and Applied

21
1. This variance is the difference between the actual manufacturing overhead
3
incurred and the applied manufacturing overhead.

a. Capacity variance.
b. Budget variance.
c. Spending variance.
d. Material variance.

2. The difference between the actual manufacturing overhead incurred and the
budgeted overhead based on a budget capacity used is:

a. Controllable variance.
b. Volume variance.
c. Overhead variance.
d. Price variance.

3. What does a favorable variance represent?

a. The actual overhead costs were less than the costs applied to production.
b. The actual overhead costs were more than the costs applied to
production.
c. The spending variance is more than the volume variance.
e spen ng var.c'ice is less than the volume variance.
214 Chapter <

MVLT ,PLE CHO1CE

^~COMPUTAT1ONAL

1, Rolex Corporation estimates that its production for the coming

year will be 10,000 units, which is 80% of normal capacity, with
the following unit costs:

Materials P40
Direct labor 60

Direct labor is paid at the rate of P24 per hour. The machine
should be run for 20 minutes to produce one unit. Total
estimated overhead is expected to consist of P400,000 for
variable overhead and P40Q,000 for fixed overhead.

What is the predetermined overhead rate base on units of

production, using the expected actual capacity activity level?

a. P80 per unit

b. P75 per unit
c. P65 per unit
d. P85 per unit

2. Using the data in No. 1, what is the redetermined overhead rate

base on material cost?

a. 200%
b. 150%
c. 250%
3 d. 300%
.