nformation on Bustos Manufacturing Company’s overhead costs is as follows: Budgeted overhead based on standard direct-labor hours allowed P90,000 Budgeted overhead based on actual direct-labor hours allowed P89,000 Standard applied overhead P86,000 Actual overhead P92,000 What is the total overhead variance Group of answer choices P6,000 unfavorable P4,000 favorable P8,000 unfavorable P9,000 favorable
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.
Information on Bustos Manufacturing Company’s
Budgeted overhead based on standard direct-labor hours allowed P90,000
Budgeted overhead based on actual direct-labor hours allowed P89,000
Standard applied overhead P86,000
Actual overhead P92,000
What is the total overhead variance
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