Compute the actual manufacturing overhead. Compute the applied manufacturing overhead. Compute the net overhead variance (indicate over- or underapplied manufacturing overhead).
Compute the actual manufacturing overhead. Compute the applied manufacturing overhead. Compute the net overhead variance (indicate over- or underapplied manufacturing overhead).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:The following manufacturing costs data are available for Division 911;
Work in process, January 1, 2018:
Job No.
Factory
Ouerhead
Total
P145,000
Materials
Labor
156
P35,000
PG0,000
P44,000
Costa for 2018
Incurred by Jobe
Total
P16,000
158.000
42.000
10.000
Materials
Labor
Other
156
157
158
159
P-
P2,000
52,000
24,000
8,000
P14,000
106,000
18,000
2.000
Not Incurred by Joba
Indirect materials and
sagddns
Employee beneits
Depreciation
Supervision
30,000
30,000
106,000
46,000
24.000
40,000
Indirect labor
106,000
46,000
24,000
40,000
Factory overhead for 2018:
Budgeted Manufacturing Overhead:
Variable - Indirect materials and supplies
Indirect labor
Employee benefits
Depreciation
Supervision
P 32,000
112,000
48,000
24,000
40,000
Fixed
Total
P256,000
Budgeted Direct Labor Costs
P160,000
Manufacturing Overhead rate per direct labor cost
(P256,000/P160,000)
160%
Compute the actual manufacturing overhead.
Compute the applied manufacturing overhead.
Compute the net overhead variance (indicate over- or underapplied manufacturing overhead).
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