AirPro Corporation reports the following for this period. Actual total overhead $ 28,575 Standard overhead applied $ 32,860 Budgeted (flexible) variable overhead rate $ 2.10 per unit Budgeted fixed overhead $ 12,900 Predicted activity level 12,900 units Actual activity level 10,600 units
AirPro Corporation reports the following for this period. Actual total overhead $ 28,575 Standard overhead applied $ 32,860 Budgeted (flexible) variable overhead rate $ 2.10 per unit Budgeted fixed overhead $ 12,900 Predicted activity level 12,900 units Actual activity level 10,600 units
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter4: Job-order Costing And Overhead Application
Section: Chapter Questions
Problem 7MCQ: The overhead variance is overapplied if a. actual overhead is less than applied overhead. b. actual...
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Concept explainers
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.
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AirPro Corporation reports the following for this period.
| Actual total |
$ 28,575 | |
|---|---|---|
| Standard overhead applied | $ 32,860 | |
| Budgeted (flexible) variable overhead rate | $ 2.10 | per unit |
| Budgeted fixed overhead | $ 12,900 | |
| Predicted activity level | 12,900 | units |
| Actual activity level | 10,600 | units |
Transcribed Image Text:Enter your answers in the tabs below.
Required A Required B
Compute the total overhead variance and identify it as favorable or unfavorable.
Total Overhead Variance
Actual total overhead
Standard overhead applied
Total overhead variance
< Required A
Required B >
Transcribed Image Text:Enter your answers in the tabs below.
Required A Required B
Compute the controllable variance and identify it as favorable or unfavorable.
Controllable variance
Actual total overhead
Budgeted (flexible) overhead
Budgeted variable overhead
Budgeted fixed overhead (unchanged)
Budgeted (flexible) overhead
Controllable variance
0
< Required A
Required >
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