11. Wasteful usage of variable overhead costs such as indirect materials and utilitiesi.e., misplacing or spilling indirect materials or leaving machines running and doors to refrigerated areas open will show up as part of the variable overhead EFFICIENCY variance.

a. True b. False

The following information applies to questions 12-14.

Actual fixed overhead cost: $35,200

Budgeted fixed overhead cost: $35,000

Budgeted fixed overhead rate, based on 10,000 machine hours: $3.50

Standard machine hours per unit: 1/2 hour

Actual units produced: 17,600

12. Compute the fixed overhead budget variance:

a. $4,400 favorable c. $4,200 favorable

b. $200 unfavorable d. $200 favorable

13. Compute the fixed overhead volume variance:

a. $200 unfavorable c. $200 favorable

b. $4,400 favorable d. $4,200 unfavorable

14. An unfavorable fixed overhead volume variance would indicate that:

a. fewer units were made during the period than had been budgeted

b. more units were made during the period than had been budgeted

c. fewer labor hours were worked during the period than had been budgeted

d. more labor hours were worked during the period than had been budgeted