Metropolitan Enterprises reports the following information at December 31: Manufacturing Overhead $4,300 21,000 18,500 $45,500 Requirements 1. What is the actual manufacturing overhead of Metropolitan Enterprises? 2. What is the allocated manufacturing overhead? 3. Is manufacturing overhead underallocated or overallocated? By how much?
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.
Metropolitan Enterprises reports the following information at December 31:
Manufacturing
$4,300 21,000 18,500 $45,500
Requirements
1. What is the actual manufacturing overhead of Metropolitan Enterprises?
2. What is the allocated manufacturing overhead?
3. Is manufacturing overhead underallocated or overallocated? By how much?
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