The following data relates to Bermuda Company for the year 20X6: Estimated Manufacturing Overhead Costs $240,000 Estimated direct labour cost $300,000 30,000 $289,000 $315,000 33,000 Direct Labour Hours Estimated Direct Labour Hours Actual Manufacturing Overhead Costs Actual direct labour cost Actual direct labour hours 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 manufacturing
$25,000 over-applied
$49,000 under-applied
$2,900 over-applied
$25,000 under-applied
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