Denominator level in hours 40,000 Actual output in units 21,000 Std. Variable overhead rate per machine hour $2.80 Actual variable overhead incurred $117,000 Actual fixed overhead incurred $302,100 Variable overhead applied $117,600 Variable overhead Efficiency Variance $8,400 U Fixed overhead budget variance $2,100 U What is the Over/under Allocated MO for Variable MO? ______________ What is the Over/under Allocated MO for Fixed MO? ___________________
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.
PLEASE PROVIDE FULL SOLUTIONS WITH EXPLAINATIONS
- Prepare fully labeled variance diagrams(used in Class) for manufacturing
overhead splitting them between variance and fixed
|
Denominator level in hours |
40,000 |
|
Actual output in units |
21,000 |
|
Std. Variable overhead rate per machine hour |
$2.80 |
|
Actual variable overhead incurred |
$117,000 |
|
Actual fixed overhead incurred |
$302,100 |
|
Variable overhead applied |
$117,600 |
|
Variable overhead Efficiency Variance |
$8,400 U |
|
Fixed overhead |
$2,100 U |
What is the Over/under Allocated MO for Variable MO? ______________
What is the Over/under Allocated MO for Fixed MO? ___________________
- Prepare
journal entries that would be made at the end of each month relating to the above variances.
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