Jackson Inc. listed the following data for 2019: Budgeted factory overhead $1,155,000 Budgeted direct labor hours 70,000 Budgeted machine hours 42,000 Actual factory overhead 1,100,900 Actual direct labor hours 87,500 Actual machine hours 40,600 Assuming Jackson Inc. applied overhead based on direct labor hours, the firm's predetermined overhead rate for 2019 is (round calculations to 2 significant digits):
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.
Jackson Inc. listed the following data for 2019:
| Budgeted factory |
$1,155,000 | ||
| Budgeted direct labor hours | 70,000 | ||
| Budgeted machine hours | 42,000 | ||
| Actual factory overhead | 1,100,900 | ||
| Actual direct labor hours | 87,500 | ||
| Actual machine hours | 40,600 | ||
Assuming Jackson Inc. applied overhead based on direct labor hours, the firm's predetermined overhead rate for 2019 is (round calculations to 2 significant digits):
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$15.34 per direct labor hour.
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$13.05 per direct labor hour.
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$16.39 per direct labor hour.
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$16.50 per direct labor hour.
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$17.02 per direct labor hour.
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