1)A firm follows labour hours to allocate fixed overhead. A positive volume variance occurs a) When managers controlled fixed overhead during the period b) When employees turned more productive c) When actual labour hours is less than budgeted labour hours d) When actual labour hours is more than budgeted labour hours 2) A firm follows machine hours to allocate machine related variable overhead. During the month, the firm reported adverse variable overhead spending variance and favorable variable overhead efficiency variance. It means a)The firm took more hours than standard hours but controlled machine expenses b) The firm controlled machine hours but incurred more expense on operating the machine c) Firm failed on both controlling machine hours and cost but production volume increases d) Firms controlled machine hours, controlled expenses but production volume declined 3) A firm uses machine hours to allocate overhead cost. During the period, budgeted variable overhead is Rs. 10000 and budgeted machine hours is 100 hours for budgeted volume of 1000 units. The firm produced 1200 units consuming 150 hours and spent Rs. 15000 towards variable overhead. The budgeted variable overhead rate is a) Rs. 100 per hour b) Rs. 10 per unit c) Rs. 6.67 per hour d) Rs. 150 per hour
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
1)A firm follows labour hours to allocate fixed overhead. A positive volume variance occurs
2) A firm follows machine hours to allocate machine related variable overhead. During the month, the firm reported adverse variable overhead spending variance and favorable variable overhead efficiency variance. It means
3) A firm uses machine hours to allocate overhead cost. During the period, budgeted variable overhead is Rs. 10000 and budgeted machine hours is 100 hours for budgeted volume of 1000 units. The firm produced 1200 units consuming 150 hours and spent Rs. 15000 towards variable overhead. The budgeted variable overhead rate is
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