1. Gerhan Company's flexible budget for the units manufactured in May shows $15,720 of total factory overhead; this output level represents 70% of available capacity. During May, the company applied overhead to production at the rate of $3 per direct labor hour (DLH), based on a denominator volume level of 5,850 DLHs, which represents 90% of available capacity. The company used 5,000 DLHs and incurred $16,000 of total factory overhead cost during May, including $9,900 for fixed factory overhead.

What is the variable factory overhead spending variance (to the nearest whole dollar) in May, assuming Gerhan uses a four-variance breakdown (decomposition) of the total overhead variance? (Round your intermediate calculation to 2 decimal places.)

Multiple Choice

• $1,130 unfavorable.

• $950 favorable.

• $1,030 unfavorable.

• N/Athis variance is not defined under the four-way breakdown of the total OVH variance.

• $830 unfavorable.

2..Gerhan Company's flexible budget for the units manufactured in May shows $15,610 of total factory overhead; this output level represents 70% of available capacity. During May, the company applied overhead to production at the rate of $3.00 per direct labor hour (DLH), based on a denominator volume level of 6,120 DLHs, which represents 90% of available capacity. The company used 6,000 DLHs and incurred $18,500 of total factory overhead cost during May, including $6,700 for fixed factory overhead.

What is the fixed factory overhead spending variance (to the nearest whole dollar) in December for Gerhan Company? (Round your intermediate calculation to 2 decimal places.)

Multiple Choice

• $502 unfavorable.

• $702 unfavorable.

• $0.

• $322 favorable.

• $202 unfavorable.

3. Bluecap Co. uses a standard cost system and flexible budgets for control purposes. The following budgeted information pertains to 2019:

Denominator volumenumber of units		8,000
Denominator volumepercent of capacity		80	%
Denominator volumestandard direct labor hours (DLHs)		24,000
Budgeted variable factory overhead cost at denominator volume	$	103,200
Total standard factory overhead rate per DLH	$	15.10

During 2019, Bluecap worked 28,000 DLHs and manufactured 9,600 units. The actual factory overhead cost for the year was $14,000 greater than the flexible budget amount for the units produced, of which $6,000 was due to fixed factory overhead. In preparing a budget for 2020 Bluecap decided to raise the level of operation to 90% of capacity (a level it considers to be "practical capacity"), to manufacture 9,000 units at a budgeted total of 27,000 DLHs. The total factory overhead spending variance in 2019 (to the nearest whole dollar), based on a three-variance breakdown (decomposition) of the total overhead variance for Bluecap Co., was:

Multiple Choice

• $17,440 unfavorable.

• $11,440 unfavorable.

• $3,200 favorable.

• $15,040 favorable.

• $17,280 favorable.

4. Megan, Inc. uses the following standard costs per unit for one of its products: Direct labor (2.0 hrs. @ $5.00/hr.) = $10.00; overhead (2.0 hrs. @ $2.50/hr.) = $5.00. The flexible budget for overhead is $120,000 plus $1.00 per direct labor hour (DLH). Actual data for the past month show total overhead costs of $225,000, total fixed overhead of $123,000, 85,000 hours worked, and 40,000 units produced.

The fixed overhead production volume variance for Megan, Inc. for the past month (to the nearest whole dollar) was:

Multiple Choice

• Cannot be determined without additional information.

• $0.

• $5,000 unfavorable.

• $3,000 unfavorable.

• $20,000 unfavorable.