Accounting Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Inputs Standard Quantity or Hours per Unit of Output Standard Price or Rate Variable manufacturing overhead 0.20 hours $6.10 per hour The company has reported the following actual results for the product for July: Actual output 4,200 units Actual direct labor-hours 780 hours Actual variable overhead rate $ 6.20 per hour The variable overhead efficiency variance for the month is closest to: A) $366 F B) $372 U C) $372 F D) $366 U
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.
Accounting Inc. has provided the following data concerning one of the products in its
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