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Cash Receipts for Chesterfield Company

I'm trying to complete these questions from my homework and I am having a very difficult time, please help.
1. The Chesterfield Company uses standard costing. Overhead is applied at $12 per machine hour. Data for the month of March follows:? Actual overhead costs $ 97,000
? Standard machine hours allowed for actual production 8,250
? Actual machine hours used 8,700
? Flexible budget overhead for standard hours allowed 104,400

The overhead volume variance is:

1. $2,000 favorable.

2. $7,400 favorable.

3. $5,400 unfavorable.

4. $7,400 unfavorable.

2. The Downtown Company uses standard costing. Variable overhead is applied at $8 per direct labor hour. Data for the month of September follows:? Actual variable overhead costs $78,000
? Standard hours allowed for actual production 10,000
? Actual labor hours worked 9,800

The controllable overhead spending variance is:

1. $ 400 unfavorable.

2. $ 400 favorable.

3. $2,000 unfavorable.

4. $2,000 favorable.

3. An automobile parts company has a standard labor rate of $12.50 per hour. In September the company produced 40,000 units using 100,000 labor hours. If the company experienced a favorable labor rate variance of $30,000 during the month, the actual labor rate per hour must be:

1. $12.80.

2. $12.20.

3. $11.75.

4. $12.50.

4. A manufacturing company uses standard costing and applies overhead on the basis of direct labor hours. The company experienced the following results in August:? Standard direct labor hours allowed for actual production 9,000
? Actual direct labor hours used 9,250
? Predetermined overhead rate (per direct labor hour) $45
? Flexible budget overhead for standard hours allowed $410,000

The overhead volume variance for the month is:

1. $5,000 unfavorable.

2. $5,000 favorable.

3. $11,250 unfavorable.

4. $6,250 favorable.

5. A manufacturing company uses standard costing and applies overhead on the basis of direct labor hours. The company experienced the following results in December:? Predetermined overhead rate per labor hour $15.00
? Standard direct labor hours allowed for actual production 14,000
? Actual overhead costs $200,000

If the overhead volume variance was $6,000 unfavorable, the flexible budget overhead for standard hours allowed is:

1. $216,000.

2. $206,000.

3. $194,000.

4. $204,000.

6. A manufacturing company uses standard costing and applies overhead on the basis of machine hours. The company experienced the following results in June:? Predetermined overhead rate per machine hour $7.50
? Standard machine hours allowed for actual production 1,500
? Actual machine hours used 1,800

If the controllable overhead spending variance was $3,500 favorable, actual overhead costs were:

1. $7,750.

2. $10,000.

3. $14,750.

4. $16,500.

7. A suit company has the following standards to make one suit: Standard Quantity Standard Price
Direct materials 4 yards per unit $9.50 per yard
Direct labor 2 hours per unit $12.00 per hour

The company purchased 4,000 yards of material in March for $40,000. The company used 3,800 yards in March in order to make 900 suits. The direct materials price variance is:

1. $2.000 favorable.

2. $1,900 unfavorable.

3. $2,000 unfavorable.

4. $1,900 favorable.

8. A suit company has the following standards to make one suit: Standard Quantity Standard Price
Direct materials 4 yards per unit $9.50 per yard
Direct labor 2 hours per unit $12.00 per hour

The company used 13,000 yards of material in order to make 3,000 suits in April. The direct materials quantity variance is:

1. $9,500 favorable.

2. $9,500 unfavorable.

3. $12,000 favorable.

4. $12,000 unfavorable.

9. The Gene Company's sales are 30% cash and 70% credit. 60% of credit sales are collected in the month of sale, 30% in the month following the sale, and 10% is collected two months after. Budgeted sales data is as follows:June $200,000
July $100,000
August $150,000

Accounts receivable at the end of August are:

1. $21,000.

2. $70,000.

3. $147,000.

4. $49,000.

10. An automobile parts company has a standard labor rate of $10.50 per hour. In September the company produced 10,000 units using 24,000 labor hours. If the company experienced a favorable labor rate variance of $18,000 during the month, the actual labor rate per hour must be:

1. $13.50.

2. $7.50.

3. $11.25.

4. $9.75.

Solution Preview

1. The Chesterfield Company uses standard costing. Overhead is applied at $12 per machine hour. Data for the month of March follows:? Actual overhead costs $ 97,000
? Standard machine hours allowed for actual production 8,250
? Actual machine hours used 8,700
? Flexible budget overhead for standard hours allowed 104,400

The overhead volume variance is:

volume variance = (Actual machine hours used - standard machine hours allowed) x budgeted overhead rate
=(8700-8250)*12=5400 Unfavorable
Answer: 3. $5,400 unfavorable.

2. The Downtown Company uses standard costing. Variable overhead is applied at $8 per direct labor hour. Data for the month of September follows:? Actual variable overhead costs $78,000
? Standard hours allowed for actual production 10,000
? Actual labor hours worked 9,800

The controllable overhead spending variance is:

controllable overhead spending variance = Actual Hours of Input, at the Actual Rate - Actual Hours of Input, at the Standard Rate
=78000 - 9800*8=-400
Answer: 2. $ 400 favorable.

3. An automobile parts company has a standard labor rate of $12.50 per hour. In September the company produced 40,000 units using 100,000 labor hours. If the company experienced a favorable labor rate variance of $30,000 during the month, the actual labor rate per hour must be: ...

Solution Summary

The solution examines cash receipt for a Chesterfield Company. The overhead volume variance is determined.

$2.19