Hanif Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Last year, Hanif Corporation incurred Rs. 360,000 in actual manufacturing overhead cost. The Manufacturing Overhead account showed that overhead was overapplied Rs. 28,000 for the year. If the predetermined overhead rate was Rs. 9 per direct labor-hour, how many hours did the Corporation work during the year?
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.
Hanif Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Last year, Hanif Corporation incurred Rs. 360,000 in actual
Step by step
Solved in 2 steps with 1 images
