Standish Company manufactures consumer products and provided the following information for the month of February: Units produced 131,300 Standard direct labor hours per unit 0.2 Standard fixed overhead rate (per direct labor hour) $2.20 Budgeted fixed overhead $64,700 Actual fixed overhead costs $68,800 Actual hours worked 26,500 Required: 1. Calculate the fixed overhead spending variance using the formula approach. 2. Calculate the volume variance using the formula approach. 3. What if 127,500 units had actually been produced in February? What impact would that have had? Indicate what the new variances would be below. Fixed Overhead Spending Variance Volume Variance

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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.