The following data for May has been provided by Mccawley Corporation. Denominator level of activity 4,200 machine-hours Budgeted fixed manufacturing overhead costs $ 83,160 Actual level of activity 4,300 machine-hours Standard machine-hours allowed for the actual output 4,400 machine-hours Actual fixed manufacturing overhead costs $ 86,940 The volume variance for May is:
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 following data for May has been provided by Mccawley Corporation.
| Denominator level of activity | 4,200 | machine-hours | |
| Budgeted fixed |
$ | 83,160 | |
| Actual level of activity | 4,300 | machine-hours | |
| Standard machine-hours allowed for the actual output | 4,400 | machine-hours | |
| Actual fixed manufacturing overhead costs | $ | 86,940 | |
The volume variance for May is:
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