Overhead costs are applied using direct labour hours. The following were budgeted for the year: Planned production (units) 50,000 Direct labour hours 200,000 Variable overhead 1,000,000 Fixed overhead 600,000 The following were the actual results: Actual production (units) 48,000 Direct labour hours 195,000 Variable overhead 950,000 Fixed overhead 610,000 Calculate the variable overhead efficiency variance.   Select one: a. $15,000 U b. $25,000 U c. $25,000 F d. $15,000 F

Q: Krueger Corporation in Washington, D.C., U.S., recently implemented a standard cost system. The…

A: Variance analysis is very important technique of cost accounting in which budegetd or standard costs…

Q: Actual fixed overhead expenditure in for the same period is C70,000. The labour force manages to…

A: The fixed overhead expenditure variance = Budgeted overhead - Actual overhead  If the budgeted…

Q: Use the following information to complete variance analysis for Maple Co. Budgeted Units 40,000…

A: Direct labour price variance is the difference between standard labour cost and actual labour cost…

Q: The following information relates to Finishing department of Tom company for the fourth quarter:…

A: SOLUTION- EXPLANATION- SPENDING VARIANCE = ACTUAL FACTORY OVERHEAD - FLEXIBLE BUDGETED FACTORY…

Q: ABC Ltd has a practice of using absorption costing. Certain period in a quarter budgeted fixed…

A: Overhead means the cost incurred indirect in factory for the production of goods. Manufacturing…

Q: Krueger Corporation in Washington, D.C., U.S., recently implemented a standard cost system. The…

A: SOLUTION- GIVEN, VARIABLE OVERHEAD RATE = $2 FIXED OVERHEAD RATE = $10 NORMAL LEVEL OF PRODUCTION =…

Q: MCD Corp. spent a total of 810,000 actual variable cost and 290,000 and cost for the month of May.…

A: Spending variance = $60000 U Volume variance = $260000 U

Q: Shaw Incorporated began this period with a budget for 1,050 units of predicted production. The…

A: Volume Variance is a way to determine whether or not there is a discrepancy between the actual…

Q: A company operates a standard absorption costing system and has the following results for a month:…

A: Overheads refer to the indirect expenses that occur during the production of the product in the…

Q: A company uses a standard costing system and applies overhead to production based on direct…

A: Fixed overhead budget variance = Budgeted fixed overhead - Actual fixed overhead

Q: The company will operate at 80% of Capacity. The overhead allocation Base is DLH and the standard…

A: Overhead volume variance= (Actual units produced - Budgeted production units) x Budgeted overhead…

Q: A company produces widgets with budgeted standard direct materials of 2 pounds per widget at $5 per…

A: Direct Labor efficiency variance = (Actual hours worked - Standard hours allowed)*Standard rate per…

Q: Selected operating information on three different companies for a recent year is given below.…

A: FIXED OVERHEAD VOLUME VARIANCE IS THE DIFFERENCE BETWEEN THE ALLOCATED FIXED OVERHEAD COST AND THE…

Q: ABC had P400,000 budgeted fixed overhead costs and based its standard on normal activity of 40,000…

A: Overhead rate = P400,000 / 40,000 units Overhead rate = P10 per unit

Q: Formidable Company collected the following information: Standard costs per unit:   Variable…

A: The question is based on the concept of budget and the standard costing method of budget.  A budget…

Q: Calculate the direct materials, direct labour, variable overheads, fixed overheads and sales…

A: Variance analysis shows the difference between the actual and budgeted overheads during the…

Q: Humphrey Manufacturing has the following standards for its production department:   Overhead is…

A: Overhead efficiency variance = (standard direct labor hours  -actual direct labor hours) x  Standard…

Q: Information on Reng Company’s overhead costs for January production activity is as follows:…

A: The variance is the difference between the actual data and standard output of the production.

Q: A company uses a standard costing system and applies overhead to production based on direct…

A: Fixed overhead budget variance = Budgeted fixed overhead - Actual fixed overhead

Q: Shaw Incorporated began this period with a budget for 1,070 units of predicted production. The…

A: Budgeted (flexible) overhead at units produced is the amount of budgeted overhead at budgeted…

Q: What is the amount of the Factory OH Controllable Variance, given the following info: Actual…

A: Controllable Variance = Actual factory overhead – Standard overhead where, Standard overhead =…

Q: The Big Company's expected production volume was 36,000 units at 9,000 hours of labor. The fixed…

A: Variance analysis helps to find out the deviations between the actual performance and the standards…

Q: Assume the following information for Jenkins Inc.: Total flexible budget direct materials costs:…

A: Standard rate per item = Total flexible budget direct materials costs / Standard quantity  = 5000/40…

Q: The Lopez Company uses standard costing in its manufacturing plant for auto parts. , the budgeted…

A: Spending variance for variable manufacturing overhead = Budgeted overhead for actual machine hours -…

Q: The following data are available for the most recent year of operations for Slacker & Sons. The…

A: Sales Activity variance describes the variance of different components of the sales activity. So for…

Q: ABC Inc. spent a total of $48,900 on factory overhead. Of this, $29,000 was fixed overhead. ABC Inc.…

A: Actual variable factory overhead = Total factory overhead - fixed factory overhead = $48900 - $29000…

Q: Crystal Glassware Company has the following standards and flexible-budget data. Standard…

A: Hey, since there are multiple requirements posted, we will answer first three requirements. If you…

Q: Beech Company produced and sold 113,000 units in May. For the level of production in May, budgeted…

A: A flexible budget is a budget at the actual activity (113,000 units) which is already given.…

Q: Krueger Corporation in Washington, D.C., U.S., recently implemented a standard cost system. The…

A: Variance analysis is an examination used to perceive the distinction between real conduct and…

Q: The following describes production activities of Mercer Manufacturing for the year. Actual direct…

A: Variance: Variance refers to the difference level in the actual cost incurred and standard cost. The…

Q: variable factory overhead controllable variance is

A: Variable factory overhead variance = Standard hours required for actual production * Standard rate…

Q: Krueger Corporation in Washington, D.C., U.S., recently implemented a standard cost system. The…

A: Lets start with understanding of various variances asked in the question, Material price variance:-…

Q: In Zinchin Ind where Standard Costing is followed, the budgeted fixed overheads for a budgeted…

A: Standard costing is an method used to identify variances between actual and budgeted figures, in…

Q: Nana Inc. evaluates manufacturing overhead in its factory by using variance analysis. The following…

A: Actual rate per hour = Actual labor cost / actual labor hours = 10500/2100 = 5 per hour

Q: The budgeted labour hours for normal activity in a given week are 6,000 hours. The budgeted total…

A: Overhead Variance = Budgeted Cost for Actual Hours - Actual Cost   Budgeted Cost per Hour =…

Q: Fixed overhead was budgeted at $200,000, and 25,000 direct labor hours were budgeted. If the fixed…

A: Fixed overhead are the costs that do not change with change in units of production, it remains the…

Q: Allen Company’s master budget called for 50,000 units of production.  Budgeted direct material costs…

A: Variance refers to a change between the expected value and the actual result. This term is usually…

Q: he data below relate to the month of November for Badong, Inc. which uses a standard cost system:…

A: A standard costing system is a tool used in accounting to create budgets, manage and control…

Q: ABC Inc. spent a total of $49,760 on factory overhead. Of this, $28,000 was fixed overhead. ABC Inc.…

A: Variance is considered as the difference between budgeted value and actual results. The management…

Q: The following data are available for the most recent year of operations for Slacker & Sons. The…

A: Given: The master budget is given below,

Q: Krueger Corporation in Washington, D.C., U.S., recently implemented a standard cost system. The…

A: Given, Variable Overhead Rate = $2 Fixed Overhead Rate = $10 Normal level of production = 1,200…

Q: Q11 M Company prepared a static budget of 50,000 direct labor hours, with estimated overhead costs…

A: The variable costs are changed with the level of production and fixed costs remains constant for…

Q: The following information is available for a manufacturer. Compute the direct labor rate and…

A: Direct Labour rate variance = (Standard labour rate - Actual rate variance) * Actual labour hours…

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.