The following information for the past year is available from Gas Company, a company that uses machine hours to apply standard factory overhead cost to outputs: Actual total factory overhead cost incurred Actual fixed overhead cost incurred Budgeted fixed overhead cost Actual machine hours Standard machine hours allowed for the units manufactured Denominator volume-machine hours Standard variable overhead rate per machine hour $ 35,000 $ 14,000 $ 10,000 8,000 4,900 5,600 $3 Under a three-variance breakdown (decomposition) of the total factory overhead variance, the fixed factory overhead production-volume variance (to the nearest whole dollar) is: (Do not round your intermediate calculations; Round your final answer to zero decimal places.)
The following information for the past year is available from Gas Company, a company that uses machine hours to apply standard factory overhead cost to outputs: Actual total factory overhead cost incurred Actual fixed overhead cost incurred Budgeted fixed overhead cost Actual machine hours Standard machine hours allowed for the units manufactured Denominator volume-machine hours Standard variable overhead rate per machine hour $ 35,000 $ 14,000 $ 10,000 8,000 4,900 5,600 $3 Under a three-variance breakdown (decomposition) of the total factory overhead variance, the fixed factory overhead production-volume variance (to the nearest whole dollar) is: (Do not round your intermediate calculations; Round your final answer to zero decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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