company produces a unit where delivery of units to its customers are related with all overheads. Compute expenditure and efficiency variance-ABC method Budget: Overheads=4,000 Output=2,000 units Deliveries-customer=20 Actual: Overheads=3,900 Output=2,100 units Deliveries-customer=19
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.
company produces a unit where delivery of units to its customers are related with all overheads. Compute expenditure and efficiency variance-ABC method
Budget:
Overheads=4,000
Output=2,000 units
Deliveries-customer=20
Actual:
Overheads=3,900
Output=2,100 units
Deliveries-customer=19
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