Mehboob Corporation calculate its predetermined overhead rate on the basis of estimated machine-hours. Data for the upcoming year is as follows: Estimated Machine Hours Rs. 80,000 Estimated variable manufacturing overhead – per machine hour Rs. 10.50 Estimated total fixed manufacturing overhead Rs. 520,000 The predetermined overhead rate for the recently completed year was closest to:
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.
Mehboob Corporation calculate its predetermined
|
Estimated Machine Hours |
Rs. 80,000 |
|
Estimated variable manufacturing overhead – per machine hour |
Rs. 10.50 |
|
Estimated total fixed manufacturing overhead |
Rs. 520,000 |
The predetermined overhead rate for the recently completed year was closest to:
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