Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable Company follows: Activity Cost Pools Total Cost of Pool Cost Driver Estimated Cost Driver Machining $ 250,000 Number of machine hours 84,900 Designing costs 56,000 Number of design hours 7,200 Setup costs 80,000 Number of batches 360 How do you find the activity rate?
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.
Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable Company follows:
| Activity Cost Pools | Total Cost of Pool | Cost Driver | Estimated Cost Driver | ||
| Machining | $ | 250,000 | Number of machine hours | 84,900 | |
| Designing costs | 56,000 | Number of design hours | 7,200 | ||
| Setup costs | 80,000 | Number of batches | 360 | ||
How do you find the activity rate?
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