Ashe Corporation has two manufacturing departments--Machining and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Customizing Total Estimated total machine-hours (MHs) 1,000 4,000 5,000 Estimated total fixed manufacturing overhead cost $ 4,700 $ 9,200 $ 13,900 Estimated variable manufacturing overhead cost per MH $ 1.10 $ 2.60 During the most recent month, the company started and completed two jobs--Job B and Job K. There were no beginning inventories. Data concerning those two jobs follow: Job B Job K Machining machine-hours 700 300 Customizing machine-hours 1,600 2,400 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job K is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $13,500 $1,740 $11,760 $13,716
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.
Ashe Corporation has two manufacturing departments--Machining and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:
| Machining | Customizing | Total | ||||
| Estimated total machine-hours (MHs) | 1,000 | 4,000 | 5,000 | |||
| Estimated total fixed |
$ | 4,700 | $ | 9,200 | $ | 13,900 |
| Estimated variable manufacturing overhead cost per MH | $ | 1.10 | $ | 2.60 | ||
During the most recent month, the company started and completed two jobs--Job B and Job K. There were no beginning inventories. Data concerning those two jobs follow:
| Job B | Job K | |||
| Machining machine-hours | 700 | 300 | ||
| Customizing machine-hours | 1,600 | 2,400 | ||
Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job K is closest to: (Round your intermediate calculations to 2 decimal places.)
-
$13,500
-
$1,740
-
$11,760
-
$13,716
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