(1) (2) Standard Quantity or Hours 2.5 yards Standard Cost (1) x (2) Standard Price or Rate $8.60 per yard Direct materials. Direct labor.... Variable manufacturing overhead Fixed manufacturing overhead.. Total standard cost per unit.. $21.50 ? $ ?
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.
Predetermined
Lasser Company plans to produce 10,000 units next period at a denominator activity of 30,000 direct labor-hours. The direct labor wage rate is $12 per hour. The company’s standards allow 2.5 yards of direct materials for each unit of product; the standard material cost is $8.60 per yard. ‘I he company’s budget includes variable
Required:
1. Using 30,000 direct labor-hours as the denominator activity, compute the predetermined overhead rate and break it down into variable and fixed elements.
2. Complete the
![(1)
(2)
Standard
Quantity
or Hours
2.5 yards
Standard
Cost
(1) x (2)
Standard
Price
or Rate
$8.60 per yard
Direct materials.
Direct labor....
Variable manufacturing overhead
Fixed manufacturing overhead..
Total standard cost per unit..
$21.50
?
$ ?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fec8ee2e7-bea8-4ba1-9b93-16634b8a17f2%2F80ec25ae-d016-4d73-b49c-17e64b18bf55%2Fd7l9r8f.png&w=3840&q=75)
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