5.The following information was gathered for Big Dawg Corp. for the year ending 2021. Budgeted direct labor hours 15,500 Actual direct labor hours 16,200 Budgeted factory overhead $73,625 Actual factory overhead $74,990 Gross profit $95,000 Assume direct labor hours is the cost driver Required: What is the amount of over/under applied overhead ? What is the adjusted gross profit ?
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.
5.The following information was gathered for Big Dawg Corp. for the year ending 2021.
Budgeted direct labor hours 15,500
Actual direct labor hours 16,200
Budgeted factory
Actual factory overhead $74,990
Gross profit $95,000
Assume direct labor hours is the cost driver
Required:
What is the amount of over/under applied overhead ?
What is the adjusted gross profit ?
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