The following information relates to Dela Cruz Company for last year. Dela Cruz uses direct labor hours as an overhead base. (a) Estimated direct labor hours 150,240 hours. (b) Estimated manufacturing overhead costs P112,680. (c) Actual manufacturing overhead costs P136,906. (d) Applied manufacturing overhead costs P126,765. What was the actual direct labor hours worked last year at Dela Cruz?
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 relates to Dela Cruz Company for last year. Dela Cruz uses direct labor hours as an
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