Oriole Manufacturing Co.'s operates 3 profit centers. The clothing center's static budget at 6800 units of production includes $34000 for direct labor, $6800 for direct materials, $13600 for variable factory overhead, and controllable fixed costs of $25600. Actual activity was 6700 units with actual costs of $34100 for direct labor, $13260 for variable factory overhead, controllable fixed costs of $25800, and $7035 for direct materials. All units produced were budgeted to be sold for $18 each. Actual sales totaled $121790. What variance will appear on the performance report for controllable margin? O $195F. O $795F. O $1195F. O $995U.
Oriole Manufacturing Co.'s operates 3 profit centers. The clothing center's static budget at 6800 units of production includes $34000 for direct labor, $6800 for direct materials, $13600 for variable factory overhead, and controllable fixed costs of $25600. Actual activity was 6700 units with actual costs of $34100 for direct labor, $13260 for variable factory overhead, controllable fixed costs of $25800, and $7035 for direct materials. All units produced were budgeted to be sold for $18 each. Actual sales totaled $121790. What variance will appear on the performance report for controllable margin? O $195F. O $795F. O $1195F. O $995U.
Chapter1: Financial Statements And Business Decisions
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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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Transcribed Image Text:Oriole Manufacturing Co.'s operates 3 profit centers. The clothing center's static budget at 6800 units of production includes $34000
for direct labor, $6800 for direct materials, $13600 for variable factory overhead, and controllable fixed costs of $25600. Actual
activity was 6700 units with actual costs of $34100 for direct labor, $13260 for variable factory overhead, controllable fixed costs of
$25800, and $7035 for direct materials. All units produced were budgeted to be sold for $18 each. Actual sales totaled $121790.
What variance will appear on the performance report for controllable margin?
O $195F.
O $795F.
O $1195F.
O $995U.
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