Casper Concrete manufactures custom concrete countertops for restaurants and individual homeowners. Casper’s actual fixed overhead for the year was $86600. During the year, Casper produced 8500 square feet of countertop and used 4420 direct labor hours. Casper had budgeted to produce 9000 square feet of countertop and had budgeted to use 4500 direct labor hours. Casper’s fixed overhead spending variance was $1200 unfavorable for the year. What was Casper’s budgeted fixed overhead for the year?
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.
Casper Concrete manufactures custom concrete countertops for restaurants and individual homeowners. Casper’s actual fixed
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