If estimated annual factory overhead is $980,500; overhead is applied using direct labor hours; estimated annual direct labor hours are 265,000; actual March factory overhead is $88,800; and actual March direct labor hours are 23,500; then overhead is: Multiple Choice $1,450 overapplied. $850 overapplied. $1,450 underapplied. $850 underapplied. $1,850 underapplied.
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.
If estimated annual factory
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$1,450 overapplied.
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$850 overapplied.
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$1,450 underapplied.
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$850 underapplied.
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$1,850 underapplied.
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