to determine the amount of total and per-unit factory overhead allocated to each of the three products.
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.
Single Plantwide Factory
Mozart Music Inc. makes three musical instruments: trumpets, tubas, and trombones. The budgeted
| Budgeted Production Volume | Direct Labor Hours Per Unit | ||||
| Trumpets | 4,000 | units | 1.2 | ||
| Tubas | 1,200 | 0.9 | |||
| Trombones | 2,500 | 1.3 |
se the factory overhead rate in (a) to determine the amount of total and per-unit factory overhead allocated to each of the three products.
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