For the period just ended, LAMBANA CO. budgeted its variable overhead at P40 per direct labor hour and fixed overhead at P480,000. Budgeted service contract was 8,000 and the service hours which was the basis for allocation of variable and the fixed overhead was budgeted at .80 hour per contract. The actual results for the period were: fixed overhead, Ph552,000;variable overhead, Ph 283,480; contracts served, 7,460; direct labor hours used, 5,595. Compute the budgeted variable overhead for the actual volume attained
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.
For the period just ended, LAMBANA CO. budgeted its variable
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