Gleason Guitars produces acoustic guitars. The table below contains budget and actual information for the month of June: Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Direct Material Direct Labor Variable Overhead Fixed Overhead Total Manufacturing Costs Actual Costs 385 units $ 17,100 27,800 9,850 13,100 $ 67,850 Spending Variance Flexible Budget 385 units Volume Variance Master Budget 200 units $ $ 15,600 23,600 9,600 11,800 60,600
Gleason Guitars produces acoustic guitars. The table below contains budget and actual information for the month of June: Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Direct Material Direct Labor Variable Overhead Fixed Overhead Total Manufacturing Costs Actual Costs 385 units $ 17,100 27,800 9,850 13,100 $ 67,850 Spending Variance Flexible Budget 385 units Volume Variance Master Budget 200 units $ $ 15,600 23,600 9,600 11,800 60,600
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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Gleason Guitars produces acoustic guitars. The table below contains budget and actual information for the month of June:
Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero
variance).
Direct Material
Direct Labor
Variable Overhead
Fixed Overhead
Total Manufacturing Costs
Actual Costs
385 units
$
$
17,100
27,800
9,850
13,100
67,850
Spending
Variance
Flexible
Budget
385 units
Volume
Variance
Master Budget
200 units
$
$
15,600
23,600
9,600
11,800
60,600
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