Justine Company budgeted total variable overhead costs at P180,000 for the current period. In addition, they budgeted costs for factory rent at P215,000, costs for depreciation of office equipment at P12,000 coșts for office rent at P92,000, and costs for denreciation of factory equinment at P 38.000, All these costs were based upon
Justine Company budgeted total variable overhead costs at P180,000 for the current period. In addition, they budgeted costs for factory rent at P215,000, costs for depreciation of office equipment at P12,000 coșts for office rent at P92,000, and costs for denreciation of factory equinment at P 38.000, All these costs were based upon
Chapter1: Financial Statements And Business Decisions
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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.
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Transcribed Image Text:Justine Company budgeted total variable overhead costs at P180,000 for the current
period. In addition, they budgeted costs for factory rent at P215,000, costs for
depreciation of office equipment at P12,000 costs for office rent at P92,000, and costs
for depreciation of factory equipment at P 38,000. All these costs were based upon
estimated machine hours of 80,000. At the end of the period, the Factory Overhead
control account had a balance of P 387,875. Actual machine hours were 74,000.
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