Management Accounting Test Question On Standard Costing SC4

Published by slang December 4th, 2007 in Test Question Bank

The following are extracts from the records of a cost centre within your business:

Extract 1	Cost Centre A March
Budgeted variable overhead for the year	$2,400
Budgeted output for the year	24,000 units
Actual production for March	1,800 units
Actual variable overhead for March	$200

Extract 2	Cost Centre B April
Budgeted fixed overhead	$500
Budgeted output	2,000 units
Standard time per unit	15 minutes
Actual hours worked	480
Actual output	1,800 units
Actual fixed overhead	$530

Required:

(i) Calculate from the extracts the following variances:

(a) Variable Overhead Expenditure

(b) Fixed Overhead Expenditure

(c) Fixed Overhead Volume

(d) Total Overhead (16 marks)

(ii) Comment upon the volume variance explaining how this may have arisen and illustrating with suitable figures any sub-divisions. (4 marks)

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