Determine the actual variable overhead cost per unit of the product (round to the nearest cent): A. $3.68 per unit B. $3.60 per unit C. $3.00 per unit D. $3.52 per unit E. Not determinable.
Determine the actual variable overhead cost per unit of the product (round to the nearest cent): A. $3.68 per unit B. $3.60 per unit C. $3.00 per unit D. $3.52 per unit E. Not determinable.
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:Budgeted production
Budgeted machine hours
Budgeted direct labor hours
Budgeted variable manufacturing overhead costs:
Supplies
Utilities
Budgeted fixed manufacturing overhead costs:
Supervision
Insurance
Depreciation
20,000 units
6,000 machine hours
8,000 labor hours
$24,000
$48,000
B. $3.60 per unit
C. $3.00 per unit
D. $3.52 per unit
E. Not determinable.
$19,500
$ 3,800
$ 8,700
Bluebell employs a standard costing system and applies the variable overhead costs based on the standard machin
hours and the fixed overhead the standard labor hours. At the end of October, the company finds its variable
overhead and fixed overhead account under- or over-applied by the following amounts:
Actual production in October
24,000 units
Variable overhead -
$
2,000 d
Fixed manufacturing overhead cc $
3,000 overapplied
Determine the actual variable overhead cost per unit of the product (round to the nearest cent):
A. $3.68 per unit
Transcribed Image Text:Determine fixed manufacturing overhead budget (spending) variance:
A. S
B. S
3,400 favorable
3,400 unfavorable
6,400 favorable
6,400 unfavorable
C. S
D. S
E. Not determinable.
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