NUBD Company uses a standard cost system and prepared the following budget at normal capacity for January: Direct labor hours Variable OH Fixed OH Total OH per DLH 24,000 P48,000 P108,000 P6.50 Actual data for January were as follows: Direct labor hours worked 22 000
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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