Determine the overhead controllable and the overhead volume variances. Indicate whether they are favorable or unfavorable. Overhead controllable variance $ Overhead volume variance
Determine the overhead controllable and the overhead volume variances. Indicate whether they are favorable or unfavorable. Overhead controllable variance $ Overhead volume variance
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 27BEA: Rath Company showed the following information for the year: Required: 1. Calculate the standard...
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Concept explainers
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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Question
![Overhead information for Wilts Company is presented.
•
Actual fixed overhead, $11,550
Actual variable overhead, $6,040
Budgeted fixed overhead, $11,725
.
Variable overhead rate, $0.90
.
Fixed overhead rate, $1.75
•
Normal capacity hours, 6,700
Standard hours allowed, 6.600
Determine the overhead controllable and the overhead volume variances. Indicate whether they are favorable or unfavorable.
Overhead controllable variance
Overhead volume variance](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb888f64c-21e3-45a4-aaad-dd39f747377f%2F1bd8a4e3-49be-4525-9170-9c70318549c0%2Fm7cphso_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Overhead information for Wilts Company is presented.
•
Actual fixed overhead, $11,550
Actual variable overhead, $6,040
Budgeted fixed overhead, $11,725
.
Variable overhead rate, $0.90
.
Fixed overhead rate, $1.75
•
Normal capacity hours, 6,700
Standard hours allowed, 6.600
Determine the overhead controllable and the overhead volume variances. Indicate whether they are favorable or unfavorable.
Overhead controllable variance
Overhead volume variance
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