The allocation base of the company is machine-hours and the estimated amount of the allocation base for the upcoming year is 43,000 machine-hours. In addition, the actual activity for the year is 42,600 machine-hours. All of the manufacturing overhead is fixed and is P848,820 per year. For simplicity, it is assumed that this is the estimated manufacturing overhead for the year as well as the actual amount of manufacturing overhead for the year. Job F3, which required 310 machine-hours, is one of the jobs worked on during the year. 1. Determine the predetermined overhead rate if the predetermined overhead rate is based on the estimated amount of the allocation base. _______________
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.
The allocation base of the company is machine-hours and the estimated amount of the
allocation base for the upcoming year is 43,000 machine-hours. In addition, the actual activity
for the year is 42,600 machine-hours. All of the manufacturing
per year. For simplicity, it is assumed that this is the estimated manufacturing overhead for the
year as well as the actual amount of manufacturing overhead for the year. Job F3, which required
310 machine-hours, is one of the jobs worked on during the year.
1. Determine the predetermined overhead rate if the predetermined overhead rate is based on the
estimated amount of the allocation base. _______________
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