Bispress Co.'s budgeted production and sales were 600 units. In a period, the actual production was 630 units whilst the sales were only 590 units. The reported profit under variable costing was RM52,800. The budgeted and actual fixed production overheads for the period were RM18,000. Required: If Bispress Co. had used absorption costing to report profits, what would be the under/over absorbed overheads in the period?
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.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
