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# Multiple Choice Accounting costing questions

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USE THE FOLLOWING INFORMATION FOR QUESTIONS #9 - #12

Michele, Inc. is in the process of evaluating its manufacturing overhead costs. Michele uses a four-variance analysis of its manufacturing overhead costs. The results for April are as follows:

Budgeted direct labor hours per unit is used to allocate variable manufacturing overhead. Fixed overhead is allocated on a per unit basis.

Budgeted amounts for April 1999 are:

Direct labor hours 0.30/Unit
Variable labor hour overhead rate \$20/DLH
Fixed manufacturing overhead \$600,000
Budgeted output (denominator level output) 30,000 Units

Actual amounts for April 1999 are:

Variable manufacturing overhead \$340,000
Fixed manufacturing overhead \$590,000
Direct labor hours 16,000
Actual output 40,000

#9.
What is the Fixed Spending Variance using four-variance analysis?
a. \$10,000 favorable
b. \$10,000 unfavorable
c. \$13,500 unfavorable
d. \$13,500 favorable

#10.
What are the Fixed Efficiency and the Fixed Production Volume Variances, respectively,
using four-variance analysis?
a. No efficiency variance, \$200,000 favorable
b. No efficiency variance, \$200,000 unfavorable
c. \$50,500 favorable, \$199,998 unfavorable
d. \$50,500 unfavorable, \$199,998 favorable

#11. What are the respective spending, efficiency, and production volume variances using three-
variance analysis?
a. \$10,000 unfavorable, \$80,000 favorable, \$200,000 unfavorable
b. \$10,000 unfavorable, \$80,000 unfavorable, \$200,000 favorable
c. \$5,000 favorable, \$25,000 unfavorable, \$0
d. \$5,000 unfavorable, \$25,000 favorable. \$0

#12. The total flexible-budget variance is:
a. \$90,000 favorable
b. \$90,000 unfavorable
c. \$80,000 unfavorable
d. \$80,000 favorable.

##### Solution Summary

Answers and explanations to 4 Multiple Choice Accounting costing questions.

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