Roberson Corporation manufactured 30,000 ice chests during September. The overhe

Question

Roberson Corporation manufactured 30,000 ice chests during September. The overhead cost-allocation base is $11.25 per machine-hour. The following variable overhead data pertain to September: Actual Budgeted Production 30,000 units 24,000 units Machine-hours 15,000 hours 10,800 hours Variable overhead cost per machine-hour: $11.00 $11.25

16) What is the actual variable overhead cost? A) $121,500 B) $151,875 C) $165,000 D) $168,750

17) What is the flexible-budget amount? A) $121,500 B) $151,875 C) $165,000 D) $168,750

18) What is the variable overhead spending variance? A) $3,750 favorable B) $16,875 unfavorable C) $13,125 unfavorable D) $30,375 unfavorable

19) What is the variable overhead efficiency variance? A) $3,750 favorable B) $16,875 unfavorable C) $13,125 unfavorable D) $30,375 unfavorable

Explanation / Answer

Answer 16. c. $165,000 Actual Variable Cost = $11 X 15000 hrs = $165000 Answer 17. B. $151,875 Flexible Budget Amount of variable Overhead = 10800 hrs X (30000 units/24000 units) X $11.25 = $151,875 Answer 18. A. $3750 (F) Variable Overhead Spending Variance = (SR - AR) X AH Variable Overhead Spending Variance = ($11.25 - $11) X 15000 Variable Overhead Spending Variance = $3750 (F) Answer 19. b. $16875 (U) Variable Overhead Efficiency Variance = (SH - AH) X SR Variable Overhead Efficiency Variance = (13500 Hrs - 15000 Hrs) X $11.25 Variable Overhead Efficiency Variance = $16875 (U)

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