Healthy Earth Products Inc. produces fertilizer and distributes the product by using company trucks. The controller of the company uses budgeted fleet hours to allocate variable manufacturing overhead. The following information relates to the company's manufacturing overhead data: Budgeted output units Budgeted fleet hours Budgeted pounds of fertilizer Budgeted variable manufacturing overhead costs $93,600 Actual output units produced and delivered Actual fleet hours O $114.00 O $123.16 $120.00 800 truckloads 520 hours $117.00 28,000,000 pounds Actual pounds of fertilizer produced&delivered Actual variable manufacturing overhead costs What is the budgeted variable overhead cost rate per output unit? 760 truckloads 460 hours 29,400,000 pounds $91,200
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.
Please do not give solution in image format thanku
Trending now
This is a popular solution!
Step by step
Solved in 3 steps