Sanford Ltd. produces a product with the following standard cost card: Variable overhead (7 hours) 21.00 Fixed overhead (7 hours) The fixed overhead rate is based on a standard monthly volume of 16,150 units. The actual results for the month of July 20x5 are as follows: Variable overhead Fixed overhead 37 320,000 577,000 Units produced and sold 15,425 units What is Sanford's fixed overhead volume variance for July 20x5? (Use a negative number to indicate an unfavourable variance and use a positive number to indicate a favourable variance.)
Sanford Ltd. produces a product with the following standard cost card: Variable overhead (7 hours) 21.00 Fixed overhead (7 hours) The fixed overhead rate is based on a standard monthly volume of 16,150 units. The actual results for the month of July 20x5 are as follows: Variable overhead Fixed overhead 37 320,000 577,000 Units produced and sold 15,425 units What is Sanford's fixed overhead volume variance for July 20x5? (Use a negative number to indicate an unfavourable variance and use a positive number to indicate a favourable variance.)
Chapter1: Financial Statements And Business Decisions
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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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Transcribed Image Text:Sanford Ltd. produces a product with the
following standard cost card:
Variable overhead (7 hours) 21.00
Fixed overhead (7 hours) 37
The fixed overhead rate is based on a
standard monthly volume of 16,150 units.
The actual results for the month of July
20x5 are as follows:
Variable overhead
Fixed overhead
320,000
577,000
Units produced and sold 15,425 units
What is Sanford's fixed overhead volume
variance for July 20x5?
(Use a negative number to indicate an
unfavourable variance and use a positive
number to indicate a favourable variance.)
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