Acme Company uses a standard cost accounting system and applies variable manufacturing overhead at a standard rate of $7.20 per machine hour. During the current month, Acme produces 13,600 units of finished goods, the variable overhead spending variance is $16,200 unfavorable, and the variable overhead rate variance is $6,120 unfavorable. The standard machine hours per unit of finished goods is 4.0 hours. What is the actual number of machine hours worked during the month? 55,800 hours 55,250 hours O 53,000 hours O 53,550 hours
Acme Company uses a standard cost accounting system and applies variable manufacturing overhead at a standard rate of $7.20 per machine hour. During the current month, Acme produces 13,600 units of finished goods, the variable overhead spending variance is $16,200 unfavorable, and the variable overhead rate variance is $6,120 unfavorable. The standard machine hours per unit of finished goods is 4.0 hours. What is the actual number of machine hours worked during the month? 55,800 hours 55,250 hours O 53,000 hours O 53,550 hours
Chapter1: Financial Statements And Business Decisions
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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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Transcribed Image Text:Acme Company uses a standard cost accounting system and applies variable
manufacturing overhead at a standard rate of $7.20 per machine hour. During the
current month, Acme produces 13,600 units of finished goods, the variable
overhead spending variance is $16,200 unfavorable, and the variable overhead
rate variance is $6,120 unfavorable. The standard machine hours per unit of
finished goods is 4.0 hours. What is the actual number of machine hours worked
during the month?
O 55,800 hours
55,250 hours
53,000 hours
O 53,550 hours
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