ACC 3200 Practice Final – Summer 2012
Answer the following three questions using information regarding Hoeper Clinic:
Hoeper Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 2,600 client-
visits, but its actual level of activity was 2,650 client-visits. The clinic has provided the following data concerning
the formulas used in its budgeting and its actual results for January:
1. Determine Hoeper’s revenue variance for the month (rounded):
A. $3,036 unfavorable
B. $5,571 unfavorable
C. $2,034 favorable
D. $3,034 favorable
E. None of the above.
Revenue Variance= Actual Revenue – FB Revenue = $131319 – 2650 Units x $50.70 = $3036 Unfavorable (Actual
price is lower than $50.7.)
FB – Flexible budget.
2. Calculate Hoeper’s (sales) activity variance for company profit (rounded):
A. $1,295 Unfavorable
B. $2,590 Favorable
C. $1,295 Favorable
D. $2,590 Unfavorable
E. None of the above
Sales Activity Variance = FB Profit – MB Profit = [ (P0 – UVC0)xQ1 – TFC0 ] - [ (P0 – UVC0)xQ0 – TFC0 ]
= (P0 – UVC0) x (Q1 – Q0) = ($50.7 - $24.8) x (2650 – 2600) = $1295 F (50 more units sold).
MB – Master budget.
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, 3. The Hoeper’s total spending variance for all expenses is (rounded):
A. $2,824 Unfavorable
B. $3,204 Unfavorable
C. $3,584 Favorable
D. $4,824 Favorable
E. $1,104 Favorable
Spending variance = Actual Total Costs – FB Costs = - $3584 F (actual cost is lower)
Where:
Actual Costs = Personnel + Medical + Occupancy + Admin = $115336
FB Costs = $24.8 x 2650 + $53200 = $118920
4. Sen Company’s standard requires 3 direct labor hours for each unit produced and pays $10 per hour. During
the last month, the company produced 1000 units of product and paid a total $32,340 direct labor salary. The
labor efficiency variance was $600 favorable. What was direct labor rate variance?
A) $5,880 Unfavorable
B) $7,920 Unfavorable
C) $3,960 Unfavorable
D) $2,940 Unfavorable
Efficiency variance: (Q1I1 – 1000 x 3) x 10 = -$600, Solve and get Q1I1 = 2940 DLH
Thus, Price Variance = 2940 x ($ – $10) = $2940 U
5. Dan Corporation uses a standard costing system in which variable manufacturing overhead is assigned to
production on the basis of the number of machine hours. The following data pertain to one month's operations:
Variable manufacturing overhead cost incurred: $70,000
Total (flexible budget) variable overhead variance: $4,550 favorable
Standard machine hours allowed for actual production: 3,550
Actual machine hours incurred: 3,600
The variable overhead efficiency variance is:
A) $1,050 favorable
B) $1,050 unfavorable
C) $3,500 unfavorable
D) $2,100 favorable
Total FB Variance = Actual – FB = $70000 – Q1I0P0 = -$4550, Solve and get FB Q1I0P0=$74550
P0 = Q1I0P0 / Q1I0 = $ = $21
Efficiency Variance = (3600 – 3550) x $21 = $1050U
6. Samsong Company uses a standard costing system and applies its fixed manufacturing overhead (FMO) costs
to products based on the number of machine hours. Last year Samsung incurred a total actual FMO $48,000
when produced 12,500 units. The FMO was over-applied by $2000. When analyzing the cost variances, the
chief accountant determined that there was a favorable $3,600 FMO production volume variance. Determine
the budgeted production level in units for the past year.
A. 13,600 units
B. 11,600 units
C. 11,050 units
D. 10,600 units
E. Need more information.
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Answer the following three questions using information regarding Hoeper Clinic:
Hoeper Clinic uses client-visits as its measure of activity. During January, the clinic budgeted for 2,600 client-
visits, but its actual level of activity was 2,650 client-visits. The clinic has provided the following data concerning
the formulas used in its budgeting and its actual results for January:
1. Determine Hoeper’s revenue variance for the month (rounded):
A. $3,036 unfavorable
B. $5,571 unfavorable
C. $2,034 favorable
D. $3,034 favorable
E. None of the above.
Revenue Variance= Actual Revenue – FB Revenue = $131319 – 2650 Units x $50.70 = $3036 Unfavorable (Actual
price is lower than $50.7.)
FB – Flexible budget.
2. Calculate Hoeper’s (sales) activity variance for company profit (rounded):
A. $1,295 Unfavorable
B. $2,590 Favorable
C. $1,295 Favorable
D. $2,590 Unfavorable
E. None of the above
Sales Activity Variance = FB Profit – MB Profit = [ (P0 – UVC0)xQ1 – TFC0 ] - [ (P0 – UVC0)xQ0 – TFC0 ]
= (P0 – UVC0) x (Q1 – Q0) = ($50.7 - $24.8) x (2650 – 2600) = $1295 F (50 more units sold).
MB – Master budget.
1
, 3. The Hoeper’s total spending variance for all expenses is (rounded):
A. $2,824 Unfavorable
B. $3,204 Unfavorable
C. $3,584 Favorable
D. $4,824 Favorable
E. $1,104 Favorable
Spending variance = Actual Total Costs – FB Costs = - $3584 F (actual cost is lower)
Where:
Actual Costs = Personnel + Medical + Occupancy + Admin = $115336
FB Costs = $24.8 x 2650 + $53200 = $118920
4. Sen Company’s standard requires 3 direct labor hours for each unit produced and pays $10 per hour. During
the last month, the company produced 1000 units of product and paid a total $32,340 direct labor salary. The
labor efficiency variance was $600 favorable. What was direct labor rate variance?
A) $5,880 Unfavorable
B) $7,920 Unfavorable
C) $3,960 Unfavorable
D) $2,940 Unfavorable
Efficiency variance: (Q1I1 – 1000 x 3) x 10 = -$600, Solve and get Q1I1 = 2940 DLH
Thus, Price Variance = 2940 x ($ – $10) = $2940 U
5. Dan Corporation uses a standard costing system in which variable manufacturing overhead is assigned to
production on the basis of the number of machine hours. The following data pertain to one month's operations:
Variable manufacturing overhead cost incurred: $70,000
Total (flexible budget) variable overhead variance: $4,550 favorable
Standard machine hours allowed for actual production: 3,550
Actual machine hours incurred: 3,600
The variable overhead efficiency variance is:
A) $1,050 favorable
B) $1,050 unfavorable
C) $3,500 unfavorable
D) $2,100 favorable
Total FB Variance = Actual – FB = $70000 – Q1I0P0 = -$4550, Solve and get FB Q1I0P0=$74550
P0 = Q1I0P0 / Q1I0 = $ = $21
Efficiency Variance = (3600 – 3550) x $21 = $1050U
6. Samsong Company uses a standard costing system and applies its fixed manufacturing overhead (FMO) costs
to products based on the number of machine hours. Last year Samsung incurred a total actual FMO $48,000
when produced 12,500 units. The FMO was over-applied by $2000. When analyzing the cost variances, the
chief accountant determined that there was a favorable $3,600 FMO production volume variance. Determine
the budgeted production level in units for the past year.
A. 13,600 units
B. 11,600 units
C. 11,050 units
D. 10,600 units
E. Need more information.
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