Jennings Corp.'s Management only tracks the total amount of Utilities Expense incurred. However, the accounting manager wants to know whether the rate that the company is being charged for its utilities has gone up. Utilities are Jennings Corp.'s only variable overhead expense. Variable Overhead is applied at a rate of $0.50/machine hour (calculated based off of last year's utility bills and machine usage). Actual machine hours this period were 72,000, while the standard machine hours (given the current level of production) were 70,000. Actual utility payments were $40,000. 6. Has the company's utility rate increased? What should Jennings Corp. have expected utility bills to be, given actual machine hours? A) S2,500 Favorable Variance B) $4,000 Unfavorable Variance C) $8,980 Favorable Variance D) $10,000 Unfavorable Variance Chapter 10-HW Solutions 7. The following information is provided for Joyner Corporation: Standard Costs Direct materials: Direct labor: Variable Overhead: Budgeted Production: $5/part, 10 parts/unit $25/hour, 2 hours/unit $3/direct labor hour 500 units Actual Results Actual Production: Direct materials Cost: Direct labor Cost: Indirect Materials: Indirect Labor Factory Utilities: 600 units $28,000 $40,000 $1,300 $2,500 $1,050 What is the variable overhead flexible budget variance? A) $650 Favorable Variance B) $980Unfavorable Variance C) $1,850 Unfavorable Variance D) $2,000 Favorable Variance E) $2,250 Favorable Variance 8. Dunford Corporation's accountant provided the following information: Standard Costs Direct materials: Direct labor: Variable Overhead: Budgeted Production: $0.30/part, 50 parts/unit $10/hour, 1.5 hours/unit $0.50/direct labor hour 50,000 units Actual Results Actual Production: Direct materials Cost: Direct labor Cost: Variable Overhead: 55,000 units $800,000 S750,000 S40,000 If there is a $2,000 Unfavorable variable overhead efficiency variance, what is the variable overhead spending variance? A) S500 Favorable Variance B) S500 Unfavorable Variance C) $2,000 Favorable Variance D) $2,000 Unfavorable Variance Chapter 10- HW Solutions 9. Publishers Inc. recorded the following information for this past month: Standard Cost/unit Actual Cost/unit Actual units of production: Actual units sold: $7.00 $6.88 5,000 5,200 What is the flexible budget variance? A) $600 Favorable Variance B) $954 Unfavorable Variance C) $1,350 Favorable Variance D) $5,000 Unfavorable Variance E) There is no variance 10. FleetFloot Shoes manufactures running shoes and other athletic apparel. This past month, management recorded the following information: Total standard cost/unit: Total actual cost/unit: Actual production: Actual units sold: $35 $38 12,000 13,500 What is the flexible budget variance for this month? A) S13,500 Favorable Variance B) S13,500 Unfavorable Variance C) $24,000 Favorable Variance D) $24,000 Unfavorable Variance E) $36,000 Unfavorable Variance