Exercise 5.22 CleanCom Company specializes in cleaning commercial buildings and construction sites. Each building and site is different, requiring amounts and types of supplies and labor for each job. CleanCom estimated the following for the year: 5,110 $76,650 $45,990 Number of direct labor hours Direct labor cost Overhead cost During the year, the following actual amounts were experienced: giviDA OS.2 abd Number of direct labor hours Direct labor cost Overhead cost 5,040 $75,600 $46,200 no If CleanCom uses a normal costing system and overhead is applied on the basis of direct labor hours, what is the cost of cleaning a construction site that takes $140 of direct materials and 21 direct labor hours? a. $455 b. $508 $648 d. $644 c.
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.
For this problem, I understood to take the predetermined
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