The following information pertains to Trenton Glass Works for the year just ended. Budgeted direct-labor cost: 75,000 hours (practical capacity) at $16 per hour Actual direct-labor cost: 80,000 hours at $17.50 per hour Budgeted manufacturing overhead: $997,500 Actual selling and administrative expenses: 433,000
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 information pertains to Trenton Glass Works for the year just ended.
Budgeted direct-labor cost: 75,000 hours (practical capacity) at $16 per hour
Actual direct-labor cost: 80,000 hours at $17.50 per hour
Budgeted manufacturing
Actual selling and administrative expenses: 433,000
| Actual manufacturing overhead: | |||
| $ | 234,000 | ||
| Property taxes | 23,000 | ||
| Indirect labor | 80,000 | ||
| Supervisory salaries | 202,000 | ||
| Utilities | 58,000 | ||
| Insurance | 30,000 | ||
| Rental of space | 301,000 | ||
| Indirect material (see data below) | 79,000 | ||
| Indirect material: | |||
| Beginning inventory, January 1 | 48,000 | ||
| Purchases during the year | 94,000 | ||
| Ending inventory, December 31 | 63,000 | ||
2. Calculate the overapplied or underapplied overhead for the year. (Round your intermediate calculations to 2 decimal places.)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
