rerhead Variances, Two- And Three-Variance Analyses erstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 122,000 units requiring 488,000 direct labor hours. (Practical capacity is 508,000 urs.) Annual budgeted overhead costs total $746,640, of which $551,440 is fixed overhead. A total of 119,400 units using 486,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $241,900, and tual fixed overhead costs were $555,000. equired: Compute overhead variances using a two-variance analysis. udget Variance Unfavorable olume Variance Unfavorable Compute overhead variances using a three-variance analysis. pending Variance Unfavorable fficiency Variance X Unfavorable olume Variance X Unfavorable

Q: Crritically identify the possible causes of the labour and material variances

A: Labor variances in a business refer to the differences between the expected or budgeted labor costs…

Q: When using a standard cost system what term refers to the differences between actual and standard…

A: Difference of actual and standard cost is measured to calculate the variance. The variances of cost…

Q: Which one of the following measures is relevant for assessing exposure to systematic risk?

A: Systematic Risk: It refers to the risk caused by factors that are not in the control of an…

Q: Explain favourable variance.

A: Definition:   Variance analysis: Variance analysis is the process of evaluating the differences…

Q: Calculate the following and determine if variances are favorable

A: Compute the total standard material cost.

Q: In two or three paragraphs explain the purpose of variance analysis and its benefits and drawbacks.

A:

Q: Variance analysis would be appropriate to measure performance ina. profit centers.b. investment…

A: Variance analysis is a method used in business and financial management to assess and analyze the…

Q: Discuss reasons for the adverse/unfavourable for Direct Material and Labour Rate variances and…

A: Direct material rate variance is the difference between the actual cost of materials and the…

Q: Define variance

A: Variance in statistics is the calculation of the distribution in an information source between the…

Q: Variance percentage is calculated by dividing the choose your answer... by the choose your answer...

A: Variation refers to the difference i.e. the difference between the current amounts with the budgeted…

Q: Distinguish between a favorable variance and an unfavorable variance.

A: Favorable Variance: Favorable variance is the variation in the actual and planned output which is…

Q: When analyzing an organization's budget using 2-variance analysis, the 2 elements used are volume…

A: The correct answer is: b. price varianceA 2-variance study of an organization's budget includes two…

Q: The amount of the activity variance for revenue What is the spending variance for the cost of…

A: Lets understand the basics.Activity variance for revenue is a variance between the planned revenue…

Q: Hi the volume variance portion is missing

A: A volume variance is the difference between the actual quantity sold or consumed and the budgeted…

Q: Differentiate between variance analysis and sensitivity analysis

A: Managers of small businesses can benefit from both variance and sensitivity analyses when trying to…

Q: Prepare a journal entry to close all variances to COGS

A: Following would be the journal entry/entries to close all the variances to the cost of goods sold:…

Q: differences between Weighted Average and FIFO methods

A: Weighted Average and FIFO methods are used to value inventory of business.

Q: Required information [The following information applies to the questions displayed below.] Manuel…

A: Total Overhead at 80% Capacity (a)        3,38,000 Total Direct Labour Hours at 80% Capacity (b)…

Q: 2. Yellow Ltd, a food manufacturer, is reviewing its operation for March 2021. The company produces…

A: Variance analysis is very important technique of comparing budgeted costs with actual costs in order…

Q: How do you find the standard quantity for efficiency variance?

A: Management should pay particular attention to those that are uncommon or noteworthy. Firms may…

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.