Predetermined overhead rate Factory overhead charged to Work in Process account Under / (Over) applied factory overhead
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.
Avery Company uses a predetermined
Compute for the following:
- Predetermined overhead rate
- Factory overhead charged to Work in Process account
- Under / (Over) applied factory overhead
- Assume the following amounts of applied FOH in each account.
Allocate the under / over applied to these three accounts:
Cost of Goods sold P200,000
Ending Finished Goods inventory 100,000
Ending Work in Process inventory 30,000
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