products. However, management is considering moving to a multiple department rate system for allocating overhead. Overhead Total Direct Labor Hours DLH per Product A B Painting Dept. $250,000 10,000 16 4 Finishing Dept. 75,000 12,000 4 16 Totals $325,000 22,000 20 20 The single plantwide factory overhead rate for Adirondack Marketing Inc. is a.$6.25 per dlh b.$14.77 per dlh c.$0.07 per dlh d.$25.00 per dlh
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.
Adirondack Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory
Overhead |
Total Direct Labor Hours |
DLH per Product | ||||
| A | B | |||||
| Painting Dept. | $250,000 | 10,000 | 16 | 4 | ||
| Finishing Dept. | 75,000 | 12,000 | 4 | 16 | ||
| Totals | $325,000 | 22,000 | 20 | 20 |
The single plantwide factory overhead rate for Adirondack Marketing Inc. is
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