Assume (1) estimated manufacturing overhead for the coming period of $314,000, (2) actual manufacturing overhead for the period of $320,000, (3) actual direct labor-hours worked of 54,000 hours, and (4) estimated direct labor-hours to be worked in the coming period of 55,000 hours. What is the amount of overhead applied to production if direct labor hours is used as an allocation base? Round intermediary calculations to two decimal places.
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.
Assume (1) estimated manufacturing
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