Static-Budget Amounts Actual Results Pairs of shoes shipped 225,000 180,000 Average number of pairs of shoes per crate Packing hours per crate Variable direct cost per hour Fixed overhead cost 15 10 0.9 hours 1.1 hour $18 $16 $54,000 $56,500 1. What is the static budget number of crates for 2017? 2. What is the flexible budget number of crates for 2017? 3. What is the actual number of crates shipped in 2017? 4. Assuming fixed overhead is allocated using crate-packing hours, what is the predetermined fixed over- head allocation rate? Required 5. For variable direct batch-level costs, compute the price and efficiency variances. 6. For fixed overhead costs, compute the spending and the production-volume variances.
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.
Activity-based costing, batch-level
Trending now
This is a popular solution!
Step by step
Solved in 10 steps with 10 images
