AirPro Corporation reports the following for this period. Actual total overhead $ 28,575 Standard overhead applied $ 32,860 Budgeted (flexible) variable overhead rate $ 2.10 per unit Budgeted fixed overhead $ 12,900 Predicted activity level 12,900 units Actual activity level 10,600 units
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.
AirPro Corporation reports the following for this period.
| Actual total |
$ 28,575 | |
|---|---|---|
| Standard overhead applied | $ 32,860 | |
| Budgeted (flexible) variable overhead rate | $ 2.10 | per unit |
| Budgeted fixed overhead | $ 12,900 | |
| Predicted activity level | 12,900 | units |
| Actual activity level | 10,600 | units |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
