Determine the overhead variance for the period?
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.
Using a traditional cost system and applies
Estimated overhead cost $150,000
Actual overhead cost $140,000
Estimated machine hours 20,000 hrs
Actual machine hours 25,000
Determine the overhead variance for the period?
Is it $10,000 overlapped?
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