Merati Corporation has two manufacturing departments--Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Estimated total machine-hours (Mila) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per MI Forning machine-hours Assembly machine-hours Job A 3,400 2,000 3,000 Job L 1,600 $9,400 $25,160 $32,670 $34,560 $ 0 Porming 5,000 20,000 1.80 $ During the most recent month, the company started and completed two jobs--Job B and Job L. There were no beginning inventories. Data concerning those two jobs follow: Assembly 5,000 10,500 2.60 $ Total 10,000 38,500 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job B is 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.
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