Deck 11: Flexible Budgets and Overhead Analysis

Question 1

Fixed overhead costs are capacity costs that are acquired in advance of usage.

Answer 1

True

Question 2

Responsibility for variable overhead spending and efficiency variances is generally assigned to the purchasing manager.

Answer 2

False

Question 3

Because activities are what consume resources, activity-based budgeting may prove to be a much more powerful planning and control tool.

Answer 3

True

Question 4

Budgets are often used as benchmarks for performance evaluation.

Question 5

Activity-based budgeting assumes that activity cost varies with units of product as the single cost driver.

Question 6

The fixed overhead volume variance is often interpreted as a measure of capacity utilization.

Question 7

When overhead is applied on the basis of direct labour hours, the variable overhead changes in proportion to changes in the direct labour hours used.

Question 8

The variable overhead spending variance is conceptually identical to the price variances of materials and labour.

Question 9

Activity-based budgeting approach focuses on cost items required by organizational units.

Question 10

A static budget provides a measure of the effectiveness of a manager, whereas a flexible budget provides a measure of the efficiency of a manager.

Question 11

For comparing expected costs with actual costs, before-the-fact flexible budgets are more useful than after-the fact flexible budgets.

Question 12

Most fixed overhead costs are affected by changes in production levels.

Question 13

It is reasonable to use average or expected capacity instead of practical capacity to calculate fixed overhead rates.

Question 14

Price changes of variable overhead items are easily controlled by production supervisors.

Question 15

Although general responsibility for the fixed overhead volume variance is usually assigned to the production department, responsibility on occasion may be assigned to the purchasing department.

Question 16

Performance reports compare actual costs with budgeted costs.

Question 17

Static budgets are the best benchmarks for preparing a performance report.

Question 18

An after-the-fact flexible budget is based the actual level of activity achieved in the period.

Question 19

The variable overhead variance is affected by both input price changes and by how efficiently overhead is used.

Question 20

Activity-based budgeting builds a budget for each activity based on the resources needed to provide the required activity output levels.

Question 21

What is the best use of a static budget?

A) to determine managerial efficiency
B) to assess how well costs were controlled during the year
C) to measure whether a manager accomplishes his or her goals
D) to compare expected costs at the actual level of activity with the actual costs

Question 22

For what level of activity is a static budget prepared?

A) for past levels of activity
B) for several levels of activity
C) for the actual level of activity
D) for a particular level of activity

Question 23

Activity-based budgeting classifies costs as direct or indirect with respect to the activity output measure.

Question 24

Which budget allows the determination of expected costs for various levels of activity?

A) static budget
B) capital budget
C) flexible budget
D) operational budget

Question 25

Which budget is used to assess managerial efficiency?

A) static budget
B) capital budget
C) flexible budget
D) operational budget

Question 26

Which budget should be used to determine managerial effectiveness?

A) static budget
B) capital budget
C) flexible budget
D) operational budget

Question 27

The variable cost component for each activity should correspond to the committed resources.

Question 28

Activity flexible budgeting is the prediction of what activity costs will be as related output changes.

Question 29

In an activity framework, controlling costs results from managing activities.

Question 30

An activity-based budgetary approach can be used to emphasize cost increases through the reduction of wasteful activities and improving the efficiency of necessary activities.

Question 31

The last step of building an activity-based budget is to identify the activities within an organization and to understand the relationship between changes in activity costs and changes in activity drivers.

Question 32

Which budget is prepared for a particular level of activity?

A) static budget
B) capital budget
C) flexible budget
D) operational budget

Question 33

What is characteristic of a before-the-fact flexible budget?

A) It is used for performance reports.
B) It is used to compare expected costs with actual costs.
C) It calculates expected costs for various levels of activity.
D) It calculates what costs should have been for the actual level of activity.

Question 34

What is characteristic of a performance report?

A) It uses static budgets.
B) It does not include variances.
C) It usually uses flexible budgets.
D) It compares actual costs with budgeted costs.

Question 35

Assume that the expectations on the static budget were met. What can be concluded?

A) The manager is very efficient.
B) The static budget was ill conceived.
C) There is no need for a flexible budget.
D) The effectiveness of the manager is not in question.

Question 36

What is characteristic of an after-the-fact flexible budget?

A) It is a useful planning tool.
B) It is a budget for the actual level of activity.
C) It allows managers to deal with uncertainty.
D) It can be used to generate results for a number of plausible scenarios.

Question 37

Using activity-based budgeting, flexible budgets are computed for a single cost driver.

Question 38

An activity-based budgeting system may help support continuous improvement and process management.

Question 39

Why are flexible budgets powerful control tools?

A) They allow the preparation of historical reports.
B) They allow managers to set the budget at a budgeted activity level.
C) They allow the calculation of what cost should be for the actual level of activity.
D) They allow the calculation of what cost should be for the budgeted level of activity.

Question 40

Using activity-based budgeting, assessing variances according to fixed and variable components provides insight into the source of variances.

Question 41

Bridgestone Company
Bridgestone Company has developed the following flexible budget formulas for its four overhead items: $$\begin{array} { l l l } & & \text { Variable rate per } \\\text { Overhead item } & \text { Fixed cost } & \text { direct labour hour } \\\text { Maintenance } & \$ 8,000 & \$ 2.00 \\\text { Power } & \$ 2,000 & \$ 0.40\end{array}$$ The company normally produces 10,000 units (each unit requires 0.10 direct labour hours); however, this year 15,000 units were produced with the following actual costs: $\begin{array}{ll}\text { Overhead item }&\text { Actual costs }\\\text { Maintenance } & \$ 14,000 \\\text { Power } & \$ 3,600 \\\text { Equipment lease } & \$ 5,000\end{array}$

-Refer to Bridgestone Company. When using an after-the-fact flexible budget, what is the total overhead budget variance?

A) $3,600 U
B) $3,600 F
C) $4,000 U
D) $4,000 F

Question 42

Just Bags
Just Bags produces leather purses. The company has developed a static budget for the first quarter, which is based on 20,000 direct labour hours. During the quarter, the actual activity was 22,000 direct labour hours. Data for the first quarter are summarized as follows: $\begin{array}{lrr}&\underline{\text { Static budget }}&\underline{\text { Actual costs }}\\&\underline{(20,000 \text { hours })} &\underline{(22,000 \text { hours })}\\\text { Direct materials } & \$ 80,000 & \$ 87,000 \\\text { Direct labour } & 160,000 & 174,000 \\\text { Rent } &\underline{ 48,000} &\underline{ 50,000} \\\text { Total } & \underline{\$ 288,000} & \underline{\$ 311,000}\end{array}$


-Refer to Just Bags. What is the flexible budget variance for the first quarter?

A) $1,000 U
B) $1,000 F
C) $23,000 U
D) $23,000 F

Question 43

Kelsey, Inc.Kelsey, Inc. produces plastic grocery bags. Kelsey has developed a static budget for the month of August, which is based on 9,000 direct labour hours. During the quarter, the actual activity was 10,000 direct labour hours. Data for August are summarized as follows: $\begin{array}{lrr}&\underline{\text { Static budget }}&\underline{\text { Actual costs }}\\&\underline{(9,000 \text { hours })} &\underline{(10,000 \text { hours })}\\\text { Direct labour } & \$ 117,000 & \$ 120,000 \\\text { Power (variable cost) } & 45,000 & 50,000 \\\text { Salary of plant superv isor } &\underline{ 5,000} &\underline{ 5,000} \\\text { Total } & \underline{\$ 167,000} & \underline{\$ 175,000}\end{array}$


-Refer to Kelsey, Inc. What can be concluded when comparing the static budget to the actual costs?

A) The salary of the plant supervisor is fixed.
B) Immediate action is needed to reduce costs.
C) The plant manager was clearly not efficient.
D) The manager spent more than should have been spent.

Question 44

Bridgestone Company
Bridgestone Company has developed the following flexible budget formulas for its four overhead items: $$\begin{array} { l l l } & & \text { Variable rate per } \\\text { Overhead item } & \text { Fixed cost } & \text { direct labour hour } \\\text { Maintenance } & \$ 8,000 & \$ 2.00 \\\text { Power } & \$ 2,000 & \$ 0.40\end{array}$$ The company normally produces 10,000 units (each unit requires 0.10 direct labour hours); however, this year 15,000 units were produced with the following actual costs: $\begin{array}{ll}\text { Overhead item }&\text { Actual costs }\\\text { Maintenance } & \$ 14,000 \\\text { Power } & \$ 3,600 \\\text { Equipment lease } & \$ 5,000\end{array}$

-Refer to Bridgestone Company. What is the after-the-fact overhead budget for the actual level of activity?

A) $15,000
B) $18,600
C) $31,600
D) $33,600

Question 45

Bridgestone Company
Bridgestone Company has developed the following flexible budget formulas for its four overhead items: $$\begin{array} { l l l } & & \text { Variable rate per } \\\text { Overhead item } & \text { Fixed cost } & \text { direct labour hour } \\\text { Maintenance } & \$ 8,000 & \$ 2.00 \\\text { Power } & \$ 2,000 & \$ 0.40\end{array}$$ The company normally produces 10,000 units (each unit requires 0.10 direct labour hours); however, this year 15,000 units were produced with the following actual costs: $\begin{array}{ll}\text { Overhead item }&\text { Actual costs }\\\text { Maintenance } & \$ 14,000 \\\text { Power } & \$ 3,600 \\\text { Equipment lease } & \$ 5,000\end{array}$

-Refer to Bridgestone Company. Prepare an overhead budget for the expected activity level of 10,000 units. What is the total budgeted overhead?

A) $12,400
B) $17,400
C) $27,400
D) $139,400

Question 46

Bridgestone Company
Bridgestone Company has developed the following flexible budget formulas for its four overhead items: $$\begin{array} { l l l } & & \text { Variable rate per } \\\text { Overhead item } & \text { Fixed cost } & \text { direct labour hour } \\\text { Maintenance } & \$ 8,000 & \$ 2.00 \\\text { Power } & \$ 2,000 & \$ 0.40\end{array}$$ The company normally produces 10,000 units (each unit requires 0.10 direct labour hours); however, this year 15,000 units were produced with the following actual costs: $\begin{array}{ll}\text { Overhead item }&\text { Actual costs }\\\text { Maintenance } & \$ 14,000 \\\text { Power } & \$ 3,600 \\\text { Equipment lease } & \$ 5,000\end{array}$

-Refer to Bridgestone Company. When using an after-the-fact flexible budget, what is the variance for power?

A) $1,000 F
B) $1,000 U
C) $1,600 U
D) $3,000 U

Question 47

Just Bags
Just Bags produces leather purses. The company has developed a static budget for the first quarter, which is based on 20,000 direct labour hours. During the quarter, the actual activity was 22,000 direct labour hours. Data for the first quarter are summarized as follows: $\begin{array}{lrr}&\underline{\text { Static budget }}&\underline{\text { Actual costs }}\\&\underline{(20,000 \text { hours })} &\underline{(22,000 \text { hours })}\\\text { Direct materials } & \$ 80,000 & \$ 87,000 \\\text { Direct labour } & 160,000 & 174,000 \\\text { Rent } &\underline{ 48,000} &\underline{ 50,000} \\\text { Total } & \underline{\$ 288,000} & \underline{\$ 311,000}\end{array}$


-Refer to Just Bags. What can be concluded when comparing the static budget to the actual outcomes?

A) The variances are all unfavourable.
B) The manager had less direct labour hours.
C) A static budget should be used for assessing efficiency.
D) The comparison is useful for assessing managerial efficiency.

Question 48

What is the variable overhead spending variance?

A) the total variable overhead less the applied variable overhead
B) the total variable overhead less total budgeted overhead costs
C) the total variable overhead less the budgeted overhead for the expected activity
D) the actual variable overhead rate less the standard variable overhead rate, multiplied by the actual hours

Question 49

Showcase Inc.Showcase Inc's standard variable overhead rate is $7 per direct labour hour, and each unit requires three standard direct labour hours. The company recorded 7,000 actual direct labour hours, $65,000 actual variable overhead costs, and 2,950 units of product manufactured.
Refer to Showcase Inc. What is the total variable overhead variance?

A) $490 U
B) $1,000 U
C) $2,950 U
D) $3,050 U

Question 50

Just Bags
Just Bags produces leather purses. The company has developed a static budget for the first quarter, which is based on 20,000 direct labour hours. During the quarter, the actual activity was 22,000 direct labour hours. Data for the first quarter are summarized as follows: $\begin{array}{lrr}&\underline{\text { Static budget }}&\underline{\text { Actual costs }}\\&\underline{(20,000 \text { hours })} &\underline{(22,000 \text { hours })}\\\text { Direct materials } & \$ 80,000 & \$ 87,000 \\\text { Direct labour } & 160,000 & 174,000 \\\text { Rent } &\underline{ 48,000} &\underline{ 50,000} \\\text { Total } & \underline{\$ 288,000} & \underline{\$ 311,000}\end{array}$


-Refer to Just Bags. What is the flexible budget amount for the first quarter?

A) $261,000
B) $288,000
C) $311,000
D) $312,000

Question 51

Kelsey, Inc.Kelsey, Inc. produces plastic grocery bags. Kelsey has developed a static budget for the month of August, which is based on 9,000 direct labour hours. During the quarter, the actual activity was 10,000 direct labour hours. Data for August are summarized as follows: $\begin{array}{lrr}&\underline{\text { Static budget }}&\underline{\text { Actual costs }}\\&\underline{(9,000 \text { hours })} &\underline{(10,000 \text { hours })}\\\text { Direct labour } & \$ 117,000 & \$ 120,000 \\\text { Power (variable cost) } & 45,000 & 50,000 \\\text { Salary of plant superv isor } &\underline{ 5,000} &\underline{ 5,000} \\\text { Total } & \underline{\$ 167,000} & \underline{\$ 175,000}\end{array}$


-Refer to Kelsey Inc. What is the flexible budget for August?

A) $165,000
B) $171,000
C) $185,000
D) $194,000

Question 52

How does one create a meaningful performance report?

A) calculate actual costs as a percentage of sales
B) compare actual costs with the prior year's actual costs
C) compare actual costs with the expected costs found in the static budget
D) compare actual costs with the expected costs at the same level of activity

Question 53

Kelsey, Inc.Kelsey, Inc. produces plastic grocery bags. Kelsey has developed a static budget for the month of August, which is based on 9,000 direct labour hours. During the quarter, the actual activity was 10,000 direct labour hours. Data for August are summarized as follows: $\begin{array}{lrr}&\underline{\text { Static budget }}&\underline{\text { Actual costs }}\\&\underline{(9,000 \text { hours })} &\underline{(10,000 \text { hours })}\\\text { Direct labour } & \$ 117,000 & \$ 120,000 \\\text { Power (variable cost) } & 45,000 & 50,000 \\\text { Salary of plant superv isor } &\underline{ 5,000} &\underline{ 5,000} \\\text { Total } & \underline{\$ 167,000} & \underline{\$ 175,000}\end{array}$


-Refer to Kelsey Inc. What is the flexible budget variance for August?

A) $10,000 U
B) $10,000 F
C) $27,000 U
D) $27,000 F

Question 54

How is variable overhead applied in a standard cost system?

A) using actual direct labour hours
B) using standard direct labour hours
C) using budgeted direct labour hours
D) using direct labour hours at practical capacity

Question 55

What is the result of inefficient use of labour?

A) favourable variable overhead spending variance
B) favourable variable overhead efficiency variance
C) unfavourable variable overhead spending variance
D) unfavourable variable overhead efficiency variance

Question 56

Bridgestone Company
Bridgestone Company has developed the following flexible budget formulas for its four overhead items: $$\begin{array} { l l l } & & \text { Variable rate per } \\\text { Overhead item } & \text { Fixed cost } & \text { direct labour hour } \\\text { Maintenance } & \$ 8,000 & \$ 2.00 \\\text { Power } & \$ 2,000 & \$ 0.40\end{array}$$ The company normally produces 10,000 units (each unit requires 0.10 direct labour hours); however, this year 15,000 units were produced with the following actual costs: $\begin{array}{ll}\text { Overhead item }&\text { Actual costs }\\\text { Maintenance } & \$ 14,000 \\\text { Power } & \$ 3,600 \\\text { Equipment lease } & \$ 5,000\end{array}$

-Refer to Bridgestone Company. What is the variance for maintenance when using an after-the-fact flexible budget?

A) $1,000 F
B) $3,000 U
C) $3,000 F
D) $11,000 U

Question 57

Suppose a company's variable overhead is applied on the basis of direct labour hours, and the company has an unfavourable direct labour efficiency variance. What is most likely to result?

A) The direct labour rate variance will be favourable.
B) The direct materials usage variance will be unfavourable.
C) The variable overhead spending variance will be unfavourable.
D) The variable overhead efficiency variance will be unfavourable.

Question 58

Which formula reflects the variable overhead spending variance?

A) (AH - SH) x SVOR
B) (AH - SH) x AVOR
C) (AVOR - SVOR) x SH
D) (AVOR - SVOR) x AH

Question 59

The difference between which two amounts equals the total variable overhead variance?

A) the actual overhead and the budgeted overhead
B) the total actual variable overhead and the total applied overhead
C) the total actual variable overhead and the total applied variable overhead
D) the total actual variable overhead and the total budgeted variable overhead

Question 60

What are the two variances for variable overhead?

A) volume and budget variances
B) budget and spending variances
C) efficiency and volume variances
D) spending and efficiency variances

Question 61

Glassco Company was planning to produce 4,500,000 speakers for the current year. Actual production was 4,000,000 speakers. Each speaker requires 0.80 direct labour hours per unit. Predetermined overhead rates are calculated using expected production, measured in direct labour hours. The budgeted variable overhead for the current year was $720,000. The actual variable overhead incurred was $714,000. What was the applied variable overhead for the year?

A) $640,000
B) $680,000
C) $714,000
D) $800,000

Question 62

Universal Forklifts, Inc.Universal Forklifts, Inc. produces a specialized machine part used in forklifts. For last year's operations, the following data were gathered: $\begin{array}{ll}\text { Units produced: } & 60,000 \\\text { Direct labour: } & 30,000 \text { hours }(a) \$ 9.00 \text { per hour } \\\text { Actual variable overhead: } & \$ 150,000\end{array}$ The company employs a standard costing system. During the year, a variable overhead rate of $4.50 per hour was used. The labour standard requires a half hour per unit produced.

-Refer to Universal Forklifts. What is the variable overhead spending variances?

A) $7,500 U
B) $10,000 U
C) $15,000 U
D) $15,000 F

Question 63

Which formula reflects the fixed overhead volume variance?

A) BFOH - (SFOR x SH)
B) (AFOH - SFOR) × SH
C) (AFOH - SFOR) × AH
D) (AFOH - SFOR) × SH

Question 64

Universal Forklifts, Inc.Universal Forklifts, Inc. produces a specialized machine part used in forklifts. For last year's operations, the following data were gathered: $\begin{array}{ll}\text { Units produced: } & 60,000 \\\text { Direct labour: } & 30,000 \text { hours }(a) \$ 9.00 \text { per hour } \\\text { Actual variable overhead: } & \$ 150,000\end{array}$ The company employs a standard costing system. During the year, a variable overhead rate of $4.50 per hour was used. The labour standard requires a half hour per unit produced.

-Refer to Universal Forklifts. What is the variable overhead efficiency variances?

A) $0
B) $7,500 U
C) $10,000 F
D) $15,000 F

Question 65

What does a performance report for variable overhead reveal?

A) the volume and spending variances
B) the volume and efficiency variances for each variable overhead item
C) both the volume and spending variances and the spending and efficiency variances for each variable overhead item
D) both the aggregate variable overhead spending and efficiency variances and the spending and efficiency variances for each variable overhead item

Question 66

How is the standard fixed overhead rate often calculated?

A) budgeted fixed overhead divided by actual hours
B) budgeted fixed overhead divided by practical capacity measured in actual hours
C) budgeted fixed overhead divided by actual capacity measured in standard hours
D) budgeted fixed overhead divided by practical capacity measured in standard hours

Question 67

Which formula reflects the variable overhead efficiency variance?

A) (AH - SH) x SVOR
B) (AH - SH) x AVOR
C) (AVOR - SVOR) x SH
D) (AVOR × AH) - (SVOR × AH)

Question 68

What are the two variances for fixed overhead?

A) usage and volume
B) efficiency and usage
C) volume and spending
D) budget and efficiency

Question 69

Budgeted variable overhead for the year was $130,000. Expected activity was 20,000 standard direct labour hours. The actual hours worked were 18,250, and the standard hours allowed for actual production were 19,750. What was the variable overhead efficiency variance?

A) $0
B) $1,500 F
C) $9,750 F
D) $12,000 F

Question 70

What does the variable overhead efficiency variance claim to measure?

A) changes in productive efficiency caused by the overuse of producing assets
B) changes in spending efficiency because the company paid too much for direct labour
C) changes in variable overhead costs attributable to inefficient purchase of variable inputs
D) changes in variable overhead costs because of the efficient (inefficient) use of direct labour

Question 71

Universal Forklifts, Inc.Universal Forklifts, Inc. produces a specialized machine part used in forklifts. For last year's operations, the following data were gathered: $\begin{array}{ll}\text { Units produced: } & 60,000 \\\text { Direct labour: } & 30,000 \text { hours }(a) \$ 9.00 \text { per hour } \\\text { Actual variable overhead: } & \$ 150,000\end{array}$ The company employs a standard costing system. During the year, a variable overhead rate of $4.50 per hour was used. The labour standard requires a half hour per unit produced.

-Refer to Long, Inc. What is the variable overhead spending variance?

A) $20,000 U
B) $20,000 U.
C) $100,000 U
D) $100,000 U.

Question 72

Hyphen Corporation
Hyphen Corporation uses a standard costing system. Information for the month of June is as follows:
Actual overhead costs ($26,000 is fixed) $80,000 $\begin{array}{ll}\text { Direct labour: }\\\text { Actual hours } \text { worked } & 12,000 \text { hours } \\\text { Standard hours allow ed for actual production } & 10,000 \text { hours } \\\text { Average actual labour cost per hour } & \$ 18\end{array}$ The overhead rate is based on a normal volume of 12,000 direct labour hours. Standard cost data at 12,000 direct labour hours were as follows: $\begin{array}{lr}\text { Variable overhead } & \$ 48,000 \\\text { Fixed overhead } & 24,000\\\text { Total overhead }&\$72,000\end{array}$

-Refer to the Hyphen Corporation. What is the fixed overhead spending variance?

A) $2,000 U
B) $4,000 U
C) $8,000 U
D) $20,000 U

Question 73

Universal Forklifts, Inc.Universal Forklifts, Inc. produces a specialized machine part used in forklifts. For last year's operations, the following data were gathered: $\begin{array}{ll}\text { Units produced: } & 60,000 \\\text { Direct labour: } & 30,000 \text { hours }(a) \$ 9.00 \text { per hour } \\\text { Actual variable overhead: } & \$ 150,000\end{array}$ The company employs a standard costing system. During the year, a variable overhead rate of $4.50 per hour was used. The labour standard requires a half hour per unit produced.

-Refer to Long, Inc. What is the variable overhead efficiency variance?

A) $20,000 U
B) $20,000 F
C) $80,000 U
D) $80,000 F

Question 74

Which department is usually assigned responsibility for the variable overhead spending variance?

A) the personnel department
B) the production department
C) the purchasing department
D) the engineering department

Question 75

During the year, Plasticine produced 10,000 units, used 21,000 direct labour hours, and incurred variable overhead of $100,000. Budgeted variable overhead for the year was $88,000. The hours allowed per unit are 2.1. The standard variable overhead rate is $4.10 per direct labour hour. What was the variable overhead spending variance?

A) $2,000 U
B) $2,900 F
C) $4,100 U
D) $13,900 U

Question 76

Which formula reflects the total fixed overhead variance?

A) AFOH - (SFOR × SH)
B) AFOH - (SFOR × AH)
C) AFOH - (standard overhead rate × SH)
D) total actual overhead - total applied overhead

Question 77

Which of the following may cause an unfavourable variable overhead spending variance?

A) the use of excessive quantities of variable overhead items
B) the payment of lower prices for variable overhead items used
C) the payment of higher prices for variable overhead items used
D) the use of excessive quantities of the variable overhead allocation base

Question 78

Hyphen Corporation
Hyphen Corporation uses a standard costing system. Information for the month of June is as follows:
Actual overhead costs ($26,000 is fixed) $80,000 $\begin{array}{ll}\text { Direct labour: }\\\text { Actual hours } \text { worked } & 12,000 \text { hours } \\\text { Standard hours allow ed for actual production } & 10,000 \text { hours } \\\text { Average actual labour cost per hour } & \$ 18\end{array}$ The overhead rate is based on a normal volume of 12,000 direct labour hours. Standard cost data at 12,000 direct labour hours were as follows: $\begin{array}{lr}\text { Variable overhead } & \$ 48,000 \\\text { Fixed overhead } & 24,000\\\text { Total overhead }&\$72,000\end{array}$

-Refer to Hyphen Corporation. What is the variable overhead efficiency variance?

A) $2,000 U
B) $4,000 U
C) $8,000 U
D) $20,000 U

Question 79

$\begin{array}{lr}\text { Variable overhead } & \$ 22,500 \\\text { Fixed ov erhead } & \underline{13,500} \\\text { Total overhead } & \$ \underline{36,000}\end{array}$

-Refer to HyTech Production Company. What is the variable overhead efficiency variance?

A) $562.50 F
B) $562.50 U
C) $1,687.50 F
D) $3,000.00 U

Question 80

Which formula reflects the fixed overhead spending variance?

A) AFOH - BFOH
B) AFOH - (SFOR × SH)
C) BFOH - (SFOR × SH)
D) AFOH - (SFOR × AH)