Fountain Garden Supplies uses a traditional costing system for allocating manufacturing overhead costs. Information related to their estimated and actual manufacturing overhead costs and cost driver is provided below. Estimated overhead costs $800,000 Actual overhead costs $780,000 Estimated cost driver 16,000 DL hours Actual cost driver 15,000 DL hours What is the predetermined overhead rate? Please give your answer to two decimal places. Do not include the "$" sign.
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.
Fountain Garden Supplies uses a traditional costing system for allocating
| Estimated overhead costs | $800,000 |
| Actual overhead costs | $780,000 |
| Estimated cost driver | 16,000 DL hours |
| Actual cost driver | 15,000 DL hours |
What is the predetermined overhead rate? Please give your answer to two decimal places. Do not include the "$" sign.
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