ing March 2020, Toby Tool & Die Company worked on four jobs. A review of direct labor costs reveals the following summary data. Actual Standard Job Number Hours Costs Hours Costs Total Variance A257 220 $5,280 226 $5,424 $144 F A258 430 11,610 411 9,864 1,746 U A259 305 7,625 303 7,272 353 U A260 100 2,200 94 2,256 56 F Total variance $1,899 U Analysis reveals that Job A257 was a repeat job. Job A258
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.
During March 2020, Toby Tool & Die Company worked on four jobs. A review of direct labor costs reveals the following summary data.
|
Actual
|
Standard
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Job Number
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Hours
|
Costs
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Hours
|
Costs
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Total Variance
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||||||
| A257 | 220 | $5,280 | 226 | $5,424 | $144 | F | |||||
| A258 | 430 | 11,610 | 411 | 9,864 | 1,746 | U | |||||
| A259 | 305 | 7,625 | 303 | 7,272 | 353 | U | |||||
| A260 | 100 | 2,200 | 94 | 2,256 | 56 | F | |||||
| Total variance | $1,899 | U |
Analysis reveals that Job A257 was a repeat job. Job A258 was a rush order that required overtime work at premium rates of pay. Job A259 required a more experienced replacement worker on one shift. Work on Job A260 was done for one day by a new trainee when a regular worker was absent.
Toby Tool & Die Company worked on four jobs
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