ACCT 5302
Review Questions with ANSWERS (Rev.)
Exam 2
ACCT 5302
Review Questions with ANSWERS (Rev.)
Exam 2
ACCT 5302
Review Questions with ANSWERS (Rev.)
Exam 2
Question 3
Straightforward Variance Analysis
Carlos, Inc. uses a standard cost system when accounting for its sole product. Planned production is 50,000
process hours per month, which gives rise to the following per-unit standards:
Variable overhead: 15 hours at $12 per hour
Fixed overhead: 15 hours at $5 per hour
During September, 3,200 units were produced and the company incurred the following
overhead costs: variable, $601,000; fixed, $236,000. Actual process hours totaled 48,500.
Required:
A. Calculate the rate and efficiency variances for variable overhead.
B. Calculate the over- or under-applied variable overhead.
ANSWER
A. Rate variance: $601,000 – (48,500 x $12) = $19,000U
Efficiency variance: (48,500 x $12) – (3,200 x 15 x $12) = $6,000U
B.
ACCT 5302
Question 4 Answer:
Review Questions with ANSWERS (Rev.)
Exam 2
ACCT 5302
Question 5 Answer:
Review Questions with ANSWERS (Rev.)
Exam 2
ACCT 5302
Review Questions with ANSWERS (Rev.)
Exam 2
Question 6 - Constrained Resources
Closter Corporation makes three products that use the current constraint, which is a particular
type of machine. Data concerning those products appear below:
Required:
a. Rank the products in order of their current profitability from the most profitable to the least
profitable. In other words, rank the products in the order in which they should be emphasized.
Show your work!
b. Assume that sufficient constraint time is available to satisfy demand for all but the least
profitable product. Up to how much should the company be willing to pay to acquire more of
the constrained resource?
ANSWER:
ACCT 5302
Question 7 Answer:
Review Questions with ANSWERS (Rev.)
Exam 2
ACCT 5302
Review Questions with ANSWERS (Rev.)
Exam 2
ACCT 5302
Question 8 ANSWER
Review Questions with ANSWERS (Rev.)
Exam 2
ACCT 5302
Review Questions with ANSWERS (Rev.)
Exam 2
Question 9: Flexible Budgets
Sammartino Clinic uses patient-visits as its measure of activity. The following report compares the
planning budget to the actual operating results for the month of November:
Required:
Prepare the clinic's flexible budget performance report for November. Label each
variance as favorable (F) or unfavorable (U).
ACCT 5302
Review Questions with ANSWERS (Rev.)
Question 9 (SOLUTION page 1 of 2)
Exam 2
ACCT 5302
Review Questions with ANSWERS (Rev.)
Question 9 (SOLUTION page 2 of 2)
Exam 2