Shahid Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. Estimated manufacturing overhead Rs. 182,000 Estimated machine-hours 5,600 Actual manufacturing overhead Rs. 187,000 Actual machine-hours 5,100 The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year. Calculate predetermined overhead rate?
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.
Shahid Corporation, which applies manufacturing
Estimated manufacturing overhead Rs. 182,000
Estimated machine-hours 5,600
Actual manufacturing overhead Rs. 187,000
Actual machine-hours 5,100
The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year.
Calculate predetermined overhead rate?
Step by step
Solved in 2 steps
