Thomlin Company forecasts that total overhead for the current year will be $11,081,000 with 151,000 total machine hours. Year to date, the actual overhead is $7,784,000 and the actual machine hours are 83,000 hours. The predetermined overhead rate based on machine hours is Round the factory overhead rate to the nearest dollar before multiplying by the number of 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.
Thomlin Company
Round the factory overhead rate to the nearest dollar before multiplying by the number of hours.
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