Miami Solar manufactures solar panels for industrial use. The company budgets production of 4,200 units (solar panels) in July and 4,600 units in August. Each unit requires 5 hours of direct labor at a rate of $15 per hour. Variable factory overhead is budgeted to be 80% of direct labor cost, and fixed factory overhead is $183,000 per month. Prepare a factory overhead budget for August. MIAMI SOLAR Factory Overhead Budget For Month Ended August 31 Budgeted total overhead
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.
Miami Solar manufactures solar panels for industrial use. The company budgets production of 4,200 units (solar panels) in July and 4,600 units in August.
Each unit requires 5 hours of direct labor at a rate of $15 per hour. Variable factory
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