06:50 Kerekes Manufacturing Corporation has prepared the following overhead budget for next month. machine-hours. Activity level Variable overhead costs: Supplies Indirect labor Fixed overhead costs: Supervision Utilities Depreciation Total overhead cost 3,900 $23,010 38,220 15,600 7,300 8,300 $92,430 The company's variable overhead costs are driven by machine-hours. What would be the total budgeted overhead cost for next month if the activity level is 3,800 machine-hours rather than 3,900 machine-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.
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