Brothern Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the most recently completed year appear below: Estimates made at the beginning of the year: Estimated machine-hours 39,000 Estimated variable manufacturing overhead $ 6.76 per machine-hour Estimated total fixed manufacturing overhead $ 794,430 Actual machine-hours for the year 42,700 The predetermined overhead rate for the recently completed year was closest to:
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.
Brothern Corporation bases its predetermined
| | ||||
| Estimates made at the beginning of the year: | | |||
| Estimated machine-hours | 39,000 | | ||
| Estimated variable manufacturing overhead | $ | 6.76 | per machine-hour | |
| Estimated total fixed manufacturing overhead | $ | 794,430 | | |
| Actual machine-hours for the year | 42,700 | | ||
| |
The predetermined overhead rate for the recently completed year was closest to:
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
