Webb, Inc. uses a flexible budget for manufacturing overhead based on machine hours. Variable manufacturing overhead costs per machine hour are as follows: Indirect labor Indirect materials Maintenance Utilities Fixed overhead costs per month are: Supervision $1,200 Insurance 400 Property taxes 600 Depreciation 1,800 The company believes it will normally operate in a range of 4,000 to 8,000 machine hours per month. During the month of August, 2016, the company incurs the following manufacturing overhead costs: Indirect labor $28,000 Indirect materials 16,200 2,800 1,900 Maintenance $5.00 2.50 .50 .30 Utilities Supervision Insurance Property taxes Depreciation 1,440 400 600 1,860 Instructions Prepare a flexible budget report, assuming that the company used 6,000 machine hours during August.
Webb, Inc. uses a flexible budget for manufacturing overhead based on machine hours. Variable manufacturing overhead costs per machine hour are as follows: Indirect labor Indirect materials Maintenance Utilities Fixed overhead costs per month are: Supervision $1,200 Insurance 400 Property taxes 600 Depreciation 1,800 The company believes it will normally operate in a range of 4,000 to 8,000 machine hours per month. During the month of August, 2016, the company incurs the following manufacturing overhead costs: Indirect labor $28,000 Indirect materials 16,200 2,800 1,900 Maintenance $5.00 2.50 .50 .30 Utilities Supervision Insurance Property taxes Depreciation 1,440 400 600 1,860 Instructions Prepare a flexible budget report, assuming that the company used 6,000 machine hours during August.
Chapter4: Job Order Costing
Section: Chapter Questions
Problem 7EB: A company estimates its manufacturing overhead will be $840,000 for the next year. What is the...
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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.
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