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A company operates a standard marginal costing system. Last month actual fixed overhead expenditure was 2% below budget and the fixed overhead expenditure variance was $1250.
What was the actual fixed overhead expenditure for the last month?
A.61250, B.62475 C.62500 D.63750
can please advise whether I can use the answer to find the correct answer ?
See my working :
I use the answer C = 62500 – 2% = 61250 ( correct answer is A) to get actual overhead ? but answer is correct.another question :
The standard direct material cost for a product is $50 / unit (12.5kg at $4/kg).Last month the actual amount paid for 45600kg of material purchased and used was $173,280 and the direct material usage variance was $15200 adverse.
What was the actual production last month?
A.3344 units B.3520 units C.3952 units D.4160 units
my working :
I take answer A . 3344 units x 12.5/kg = 41800 kg
less actual used = 45600 kg
variance usage 3800 kg x $4/kg = $15,200 adverseplease advise can I take the answer to test one by one until I get $15,200 ?
thank you.I don’t understand your workings for the first question. If the variance is 2% of budget, the budget must be 1250 / 2%.
Actual is below budget by 1250 and so there you are.For your second question – yes you can try each answer one by one (the exam is marked by computer and it does not know how you got the answer). However the problem is that it does take more time, and there is a lot of time pressure in the exam.
Thank you advice
Please correct me the below calculation whether is the correct way to get the actual production units :
45600 / $4 per kg = 11400
adverse 15200 – 11400 = 3800
45600 – 3800 = 41800 / 12.5 kg = 3344 units ?
thank you.
The standard cost of the actual material used is 45600 x $4 = 182,400.
The usage variance is 15200 adverse, so the standard cost for the actual production must be 182,400 – 15,200 = 167,200.
So the production must be 167200 / 50 = 3344 units
1st question :
if question give is 2% above , whether should be 1250 / 2% = 62500+1250=63,750?
because below is less ( 1250/2%=62500-1250=61250 answer is A)
kindly explain why below is less than why above is add ?2nd question :
the usage variance is 15200 adverse but if the usage variance is favourable whether is added ?
thank you
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