Refer to DCdesserts.com's activity (Picture below) based flexible budget. Suppose that the company's activity in june is described as follows Process hours 9,000 Production runs 12 New products tested 30 Direct material handled (pounds) 40,000 Determine the flexible budget cost for the TOTAL OVERHEAD COST a. Indirect material 33,000 b. Utilities 6,000 c. Inspection 3,300 d. Test kitchen 1,800 e. Material handling 4,000 f. TOTAL OVERHEAD COST ?
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.
Refer to DCdesserts.com's activity (Picture below) based flexible budget. Suppose that the company's activity in june is described as follows
Process hours 9,000
Production runs 12
New products tested 30
Direct material handled (pounds) 40,000
Determine the flexible budget cost for the TOTAL
a. Indirect material 33,000
b. Utilities 6,000
c. Inspection 3,300
d. Test kitchen 1,800
e. Material handling 4,000
f. TOTAL OVERHEAD COST ?
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