SCENARIO 3 FIXED MOH VARIANCE ANALYSIS Jenny's Corporation manufactured 25,000 grooming kits for horses during March. The fixed-overhead cost-allocation rate is $20.00 per machine-hour. The following fixed overhead data pertain to March: ACTUAL STATIC BUDGET Production 25,000 units 24,000 units Machine- hours 6,100 hours 6,000 hours Fixed overhead costs for March $123,000 $120,000 g. What is March's fixed overhead spending variance? h. What is March's fixed overhead production- volume variance?
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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