Sybil, Inc. uses a predetermined overhead allocation rate to allocate manufacturing overhead costs to jobs. The company recently completed Job 300X. This job used 14 machine hours and 2 direct labor hours. The predetermined overhead allocation rate is calculated to be $40 per machine hour. What is the amount of manufacturing overhead allocated to Job 300X using machine hours as the allocation base? Question content area bottom Part 1 A. $80 B. $480 C. $640 D. $560
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.
Part 1
Note:
Predetermined overhead rates are estimated before the beginning of any accounting year by estimating the level of activity and the amount of overhead, and it is used to allocate manufacturing overhead over the job to ascertain the cost of the job. At year end allocated overhead is compared with actual overhead to ascertain the under/over applied overhead.
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