From the data below prepare (a) an analysis offactory overhead variances using the two-variance method and (b) journal entries for theanalysis.Budegeted(normal capacity)ActualDirect labor hours:20,00025,600Factory overhead:Fixed:$14,000 $17,000Variable:16,00019,000Standard allowed for actual production:24,000 hours(a) Factory Overhead Variance-Two-factorAnalysis:(b) Journal entries:

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Description: From the data below prepare (a) an analysis offactory overhead variances using the two-variance method and (b) journal entries for theanalysis.Budegeted(normal capacity)ActualDirect labor hours:20,00025,600Factory overhead:Fixed:$14,000 $17,000Varia

In the standard costing method, the estimated amounts are used for the effective control of costs,…

Answered: From the data below prepare (a) an…

Business

Accounting

From the data below prepare (a) an analysis of factory overhead variances using the two- variance method and (b) journal entries for the analysis.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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

100%

From the data below prepare (a) an analysis of
factory overhead variances using the two-
variance method and (b) journal entries for the
analysis.
Budegeted
(normal capacity)
Actual
Direct labor hours:
20,000
25,600
Factory overhead:
Fixed:
$
14,000 $
17,000
Variable:
16,000
19,000
Standard allowed for actual production:
24,000 hours
(a) Factory Overhead Variance-Two-factor
Analysis:
(b) Journal entries:

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