Fletcher Company collected the following data regarding production of one of its products. Compute the variable overhead efficiency variance. Direct labor standard (2 hours @ $13.00/hour) $26.00 per finished unit 93,500 hours Actual direct labor hours Budgeted units 53,000 units Actual finished units produced Standard variable OH rate (2 hours $15.40/hour) Standard fixed OH rate ($482,300/53,000 units) Actual cost of variable overhead costs incurred Actual cost of fixed overhead costs incurred 46,000 units $ 30.80 per finished unit $9.10per unit $ 1,407,800 $ 485,000
Fletcher Company collected the following data regarding production of one of its products. Compute the variable overhead efficiency variance. Direct labor standard (2 hours @ $13.00/hour) $26.00 per finished unit 93,500 hours Actual direct labor hours Budgeted units 53,000 units Actual finished units produced Standard variable OH rate (2 hours $15.40/hour) Standard fixed OH rate ($482,300/53,000 units) Actual cost of variable overhead costs incurred Actual cost of fixed overhead costs incurred 46,000 units $ 30.80 per finished unit $9.10per unit $ 1,407,800 $ 485,000
Chapter1: Financial Statements And Business Decisions
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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:Fletcher Company collected the following data regarding production of one of its products. Compute the variable overhead efficiency variance
Direct labor standard (2 hours @ $13.00/hour)
$26.00 per finished unit
93,500 hours
Actual direct labor hours
Budgeted units
Actual finished units produced
Standard variable OH rate (2 hours $15.40/hour)
Standard fixed OH rate ($482,300/53,000 units)
Actual cost of variable overhead costs incurred.
Actual cost of fixed overhead costs incurred
53,000 units
46,000 units
$ 30.80 per finished unit
$9.10per unit
$ 1,407,800
$ 485,000
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