It takes 100,000 direct labor hours to manufacture the product. Total overhead for the product is $400,000. Using the traditional cost method of direct labor hours, what is the predetermined overhead rate? $0.25 per direct labor hour $4.00 per direct labor hour $4.50 per direct labor hour $3.80 per direct labor hour
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.
It takes 100,000 direct labor hours to manufacture the product. Total overhead for the product is $400,000. Using the traditional cost method of direct labor hours, what is the predetermined overhead rate?
- $0.25 per direct labor hour
- $4.00 per direct labor hour
- $4.50 per direct labor hour
- $3.80 per direct labor hour
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
