Crane Co. manufactures baseball bats. The company’s total overhead consists of assembly costs and inspection costs. The following data is available: Cost Pool Wood Aluminum Total Cost Assembly 700 machine hrs. 700 machine hrs. $40600 Inspections 550 inspections 250 inspections 71200 2100 labor hrs. 1900 labor hrs. Total overhead assigned to wood bats assuming a single overhead rate and using activity-based costing, respectively, are $58695 and $53105. $53105 and $69250. $58695 and $69250. $53105 and $42550.
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.
Crane Co. manufactures baseball bats. The company’s total
| Cost Pool | Wood | Aluminum | Total Cost | |||
|---|---|---|---|---|---|---|
|
Assembly
|
700 machine hrs. | 700 machine hrs. | $40600 | |||
|
Inspections
|
550 inspections | 250 inspections | 71200 | |||
| 2100 labor hrs. | 1900 labor hrs. |
Total overhead assigned to wood bats assuming a single overhead rate and using activity-based costing, respectively, are
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