Safeflower Systems allocates manufacturing overhead based on machine hours. Each connector should require 10 machine hours. According to the static budget, Safeflower Systems expected t incur the following: View the static budget information. During August, Safeflower Systems actually used 400 machine hours to make 92 connectors and spent $5,500 in variable manufacturing costs and $7,800 in fixed manufacturing overhead costs. Calculate the variable overhead cost variance for Safeflower Systems. OA. $6,850 F OB. $5,850 F O C. $1,000 U OD. $4,850 F Static Budget 400 machine hours per month (40 connectors x 10 machine hours per connector) $4,500 in variable manufacturing overhead costs $6,210 in fixed manufacturing overhead costs Print Done - X
Safeflower Systems allocates manufacturing overhead based on machine hours. Each connector should require 10 machine hours. According to the static budget, Safeflower Systems expected t incur the following: View the static budget information. During August, Safeflower Systems actually used 400 machine hours to make 92 connectors and spent $5,500 in variable manufacturing costs and $7,800 in fixed manufacturing overhead costs. Calculate the variable overhead cost variance for Safeflower Systems. OA. $6,850 F OB. $5,850 F O C. $1,000 U OD. $4,850 F Static Budget 400 machine hours per month (40 connectors x 10 machine hours per connector) $4,500 in variable manufacturing overhead costs $6,210 in fixed manufacturing overhead costs Print Done - X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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