1. The following standards for variable overhead have been established for a company that makes only one product:

Standard hours per unit of output - 9.7 hours

Standard variable overhead rate - 13.90 per hour

The following data pertain to operations for the last month:

Actual hours - 8,200 hours

Actual total variable overhead cost - $116,030

Actual output - 800units

What is the variable overhead rate variance for the month?

a. $2,050 U

b. $6,226 U

c. $1,940 F

d. $8,166 U

2. The following labor standards have been established for a particular product:

Standard labor-hours per unit of output - 5.0 hours

Standard labor rate - $19.85 per hour

The following data pertain to operations concerning the product for the last month:

Actual hours worked - 7,300 hours

Actual total labor cost - $148,190

Actual output - 1,400 units

What is the labor efficiency variance for the month?

a. $6,090 U

b. $9,240 F

c. $5,955 U

d. $9,240 U

3. Cahalane Natural Dying Corporation measures its activity in terms of skeins of yarn dyed. Last month, the budgeted level of activity was 11,600 skeins and the actual level of activity was 12,000 skeins. The company's owner budgets for dye costs, a variable cost, at $0.31 per skein. The actual dye cost last month was $3,540. In the company's flexible budget performance report for last month, what would have been the spending variance for dye costs?

a. $180 F

b. $124 U

c. $56 F

d. $118 U

4. The concept of responsibility accounting means that:

a. Budgetary data should be reviewed and approved by all levels of management.

b. An employee's performance should be evaluated only on those items under his or her control.

c. An employee's performance should be evaluated only by his or her immediate supervisor.

d. Budgetary data should be reviewed and approved by the budget committee.