Problem #3 Given the following information, explain the salary variance. Costs in the de- partment are considered 50 percent variable. Salaries Paid Hours Volume Actual $228,800 20,800 19,000 Budget $237,120 19,760 20,000
Problem #3 Given the following information, explain the salary variance. Costs in the de- partment are considered 50 percent variable. Salaries Paid Hours Volume Actual $228,800 20,800 19,000 Budget $237,120 19,760 20,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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![Problem #3
Given the following information, explain the salary variance. Costs in the de-
partment are considered 50 percent variable.
Salaries
Paid Hours
Volume
Actual
$228,800
20,800
19,000
Budget
$237,120
19,760
20,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F26b0b5a6-fa48-416c-ac4a-b5028772bd0b%2Fed0f8614-bd90-48f4-9708-234a2d161246%2Fh54ix49_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem #3
Given the following information, explain the salary variance. Costs in the de-
partment are considered 50 percent variable.
Salaries
Paid Hours
Volume
Actual
$228,800
20,800
19,000
Budget
$237,120
19,760
20,000
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