QUIZ

(TWO-WAY FOH VARIANCE ANALYSIS)

Company XYZ produces a product that has the following factory overhead standard
costs per unit. The budgeted production is at the normal capacity of 1,000 units,
requiring a budgeted time of 3,000 hours. The total fixed factory overhead at this
capacity is P 30,000.
Variable
3 hours at 30 per hour
FOH
Fixed FOH 3 hours at P10 per hour

During the month, the company produced 1,100 units and incurred the following actual
factory overhead costs:
Variable 3,250 hours at P29 per
P 94,250
FOH hour
Fixed FOH P 36,500
Total P130,750

1. Required: Compute for the Budget Variance

A. 3000 F B. 2300 F C. 1750 UF D. 2400 UF

2. Calculate for the Volume Variance

A. 3000 F B. 2000 F C. 1750 UF D. 2450 UF

3. COMPUTE FOR THE TOTAL FACTORY OVERHEAD VARIANCE

A. 1200 F B. 1250 F C. 1650 UF D. 2000 UF

(THREE-WAY FOH VARIANCE ANALYSIS)

Company ABC produces a product that has the following factory overhead standard
costs per unit. The budgeted production is at the normal capacity of 1,000 units,
requiring a budgeted time of 3,000 hours. The total fixed factory overhead at this
capacity is P 30,000.
Variable
3 hours at P30 per hour
FOH
Fixed FOH 3 hours at P10 per hour

During the month, the company produced 1,100 units and incurred the following actual
factory overhead costs:
Variable 3,250 hours at P29 per
P 94,250
FOH hour
Fixed FOH P 36,500
Total P130,750

4.Compute for the Spending Variance

A. 3050 F B. 2350 F C. 2750 UF D. 3250 UF

5. Efficiency Variance
A. 2500 F B. 1500 F C. 1700 UF D. 2000 UF

6. Volume Variance
A. 3000 F B. 2300 F C. 1750 UF D. 2400 UF

7. TOTAL FACTORY OVERHEAD VARIANCE

A. 1200 F B. 2300 F C. 1500 F D. 1400 UF

8. (TWO-WAY FOH VARIANCE ANALYSIS)

Actual factory overhead ₱22,000

Budgeted allowance based on standard hours allowed:
Fixed overhead budgeted ₱12,000
Variable expenses (3,850 standard hours × P2 standard rate) ₱7,700
₱19,700
Calculate for the Controllable Variance
A. 2500 U B. 2300 U C. 2100 U D. 2400 U

9. (TWO-WAY FOH VARIANCE ANALYSIS)

Actual factory overhead ₱22,000

Budgeted allowance based on standard hours allowed:
Fixed overhead budgeted ₱12,000
Variable expenses (3,850 standard hours × P2 standard rate) ₱7,700
₱19,700
Calculate for the Volume Variance
A. 450 U B. 500 U C. 400 U D. 430 U
10. (TWO-WAY FOH VARIANCE ANALYSIS)
Universal Company uses a standard cost system and prepared the following budget at normal
capacity for the month of January:
Direct labor hours 24,000
Variable factory O/H ₱48,000
Fixed factory O/H ₱108,000
Total factory O/H per DLH P6.50
Actual data for January were as follows:
Direct labor hours worked 22,000
Total factory O/H ₱147,000
Standard DLH allowed for capacity attained 21,000
Using the two-way analysis of O/H variances, what is the budget (controllable) variance
for January?

A. ₱3,000 F. B. ₱13,500 U. C. ₱9,000 F. D. ₱10,500 U.

11. (THREE-WAY FOH VARIANCE ANALYSIS)

The following information is available from the Tyro Company:
Actual factory O/H P15,000
Fixed O/H expenses, actual P7,200
Fixed O/H expenses, budgeted P7,000
Actual hours 3,500
Standard hours 3,800
Variable O/H rate per DLH P2.50
Assuming that Tyro uses a three-way analysis of O/H variances, what is the spending
variance?
A. ₱750 F. B.₱750 U. C. ₱950 F D. ₱200 U

12. (FACTORY OVERHEAD VARIANCE ANALYSIS)

XYZ Company has a variable factory overhead budget of P1,320,000 in producing

120,000 units of its product. One unit requires 2.75 labor hours to complete -- a total of
330,000 hours. Hence, the application rate for VFOH is P4 per labor hour (1,320/330).
Last month, XYZ produced 9,600 units and employed 29,000 direct labor hours. The
actual variable factory overhead is P121,800.

Compute for the variable spending variance.

A. ₱5800 UF. B. ₱5600 UF C. ₱5550 F D. ₱5000 F

13. The production manager of Hodgson Industrial Design estimates that the fixed
overhead should be P700,000 during the upcoming year. However, since a
production manager left the company and was not replaced for several months,
actual expenses were lower than expected, at P672,000.

Calculate the fixed overhead spending variance:

A. (P29,000) B. P28,000 C. (P28,000) D. (P28,500)

14. Motors PLC is a manufacturing company specializing in the production of automobiles.

Information from its last budget period is as follows:

Actual Production 275 units

Budgeted Production 250 units

Standard Fixed Overhead Absorption Rate P200 per unit

A. ₱4000 UF B. ₱4500 UF . C. ₱5000 F D. ₱(5000) F

Continuing the Motors PLC example above, we have the following data from its last period:
Actual Production 275,000 units

Budgeted Production 250,000 units

Standard Fixed Overhead Absorption Rate P2,000 per unit

Additional information:

Standard machine hours per unit 10 hours

Actual number of machine hours 3,000,000

15. Calculate the fixed overhead capacity

A. ₱150M UF B. ₱100M F C. ₱110M F D. ₱10 M UF

16. Fixed overhead efficiency variance.

A. ₱50M ADVERSE B. ₱50M UF C. ₱50M F D. ₱500M F

17. Motors PLC is a manufacturing company specializing in the production of automobiles.

Information relating to its fixed manufacturing overhead expense of last period is as
follows:
Million

Actual fixed overheads A 526

Budgeted fixed overheads B 500

A. ₱28 F B.₱26 U C. ₱26 F D. ₱26 ADVERSE

18. Budgeted Variable overhead for the period: P40000

Budgeted Volume of Production for the period: 80000 units
The actual variable overheads incurred during the period which is under review amounted
to P 56000, whereas the actual production were 96000 units.

Calculate the variable overhead variance.

A. ₱8000 ADVERSE B.₱8000 U C. ₱8000 F D. ₱7000 ADVERSE

Budgeted Overhead P 40000 (fixed P 24000, variable P 16000)

Budgeted hours 500
Actual Overhead P 41600 (fixed P 24400, variable P 17200)
Actual hours 525

19. Calculate the Fixed FOH Expenditure Variance

A. ₱500 ADVERSE B.₱400 U C. ₱400 F D. ₱400 ADVERSE

20. Calculate the Fixed FOH Volume Variance

A. ₱1000 ADVERSE B.₱1500 U C. ₱1200 F D. ₱2000 ADVERSE
21. Using the two-variance method for analyzing overhead, which of the following
variances contains both variable and fixed overhead elements?
A. B. C. D.

Controllable (Budget) Variance Yes Yes Yes No

Volume Variance Yes Yes No No
Efficiency Variance Yes No No No

22.
The total overhead variance is
A. The difference between actual overhead costs and budgeted overhead.
B. Based on actual hours worked for the units produced.
C. The difference between actual overhead costs and applied overhead.
D. The difference between budgeted overhead and applied overhead.

23. During 1990, a department’s three-variance factory O/H standard costing system
reported unfavorable spending and volume variances. The activity level selected for
allocating factory O/H to the product was based on 80% of practical capacity. If 100%
of practical capacity had been selected instead, how would the reported unfavorable
spending and volume variances have been affected?
A. B. C. D.

Spending Variance Increased Increased Unchanged Unchanged

Volume Variance Unchanged Increased Increased Unchanged

24.
When expenses estimated for the capacity attained differ from the actual expenses
incurred, the resulting balance is termed the
A. Activity variance. C. Unfavorable variance.
B. Budget variance. D. Volume variance.

25. A spending variance for variable factory O/H based on direct labor hours is the
difference between actual variable factory O/H and the variable factory O/H that
should have been incurred for the actual hours worked. This variance results from
A. Price and quantity differences for overhead costs.
B. Price differences for overhead costs.
C. Quantity differences for overhead costs.
D. Differences caused by production volume variation