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    Cash Receipts for Chesterfield Company

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    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.

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    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

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