rmal capacity of an Assembling Department was 12,000 machine hours. At normal capacity, the standard factory overhead tariff was $12.50 per machine hours, based on standard monthly fixed budgeted costs of $96,000 and variable costs $4.5 per hours. During the April, the department operated 12,500 machine hours, with actual overhead of $166,000. Standard allowed the machine usage for achieved production was 11,000. Which of the following statement is correct? 1. Controllable variance of $8,000 (favorable) and volume of $20,500 (favorable) 2. Controllable variance of $8,000 (unfavorable) and volume of $20,500 (favorable) 3. Controllable variance of $20,500 (favorable) and volume of $8,000 (unfavorable) 4. Controllable variance of $20,500 (ufavorable) and volume of $8,000 (unfav
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.
The monthly normal capacity of an Assembling Department was 12,000 machine hours. At normal capacity, the standard factory
1. Controllable variance of $8,000 (favorable) and volume of $20,500 (favorable)
2. Controllable variance of $8,000 (unfavorable) and volume of $20,500 (favorable)
3. Controllable variance of $20,500 (favorable) and volume of $8,000 (unfavorable)
4. Controllable variance of $20,500 (ufavorable) and volume of $8,000 (unfavorable)
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