Dubberly Corporation's cost formula for its manufacturing overhead is $32,400 per month plus $54 per machine-hour. For the month of March, the company planned for activity of 7,880 machine-hours, but the actual level of activity was 7,790 machine-hours. The actual manufacturing overhead for the month was $482,490. The spending variance for manufacturing overhead in March would be 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.
Dubberly Corporation's cost formula for its manufacturing
The spending variance for manufacturing overhead in March would be closest to:
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
