as a monthly overhead cost formula of $34,320 + $6 per direct labor hour. The firm’s current ye
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.
OH Application
For the current year, Omaha Mechanical has a monthly
a. Determine the total overhead to be applied per unit of product in the current year.
Note: Round amount to two decimal places.
| Applied OH per unit | Answer
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b. Prepare
| Account | Debit | Credit | |
|---|---|---|---|
| 1 | Answer | Answer
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Answer
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| Answer | Answer
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Answer
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| To record actual overhead | |||
| 2 | Answer | Answer
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Answer
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| Answer | Answer
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Answer
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| To record the appplication of overhead to WIP |
c. Given the actual direct labor hours in (b), how many units would you have expected to be produced in January?
| Units produced in January | Answer
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