The Lopez Company uses standard costing in its manufacturing plant for auto parts. , the budgeted output level for the year is 4,000 units ,The standard machine-hours allowed per unit of output is 6 machine hours. the budgeted Variable manufacturing overhead rate is $9 per hour. The actual output produced was 4,400 units. The actual Variable manufacturing overhead costs were $245,000. The actual machine hours were 28,400. The spending variance for V.MOH is : Select one: a. 17,800 favorable b. 10,600 Favorable c. 17,800 unfavorable d. 16,000 unfavorable e. 10,600 unfavorable
The Lopez Company uses standard costing in its manufacturing plant for auto parts. , the budgeted output level for the year is 4,000 units ,The standard machine-hours allowed per unit of output is 6 machine hours. the budgeted Variable manufacturing overhead rate is $9 per hour. The actual output produced was 4,400 units. The actual Variable manufacturing overhead costs were $245,000. The actual machine hours were 28,400. The spending variance for V.MOH is : Select one: a. 17,800 favorable b. 10,600 Favorable c. 17,800 unfavorable d. 16,000 unfavorable e. 10,600 unfavorable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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The Lopez Company uses standard costing in its manufacturing plant for auto parts. , the budgeted output level for the year is 4,000 units ,The standard machine-hours allowed per unit of output is 6 machine hours. the budgeted Variable manufacturing overhead rate is $9 per hour. The actual output produced was 4,400 units. The actual Variable manufacturing overhead costs were $245,000. The actual machine hours were 28,400.
The spending variance for V.MOH is :
Select one:
a. 17,800 favorable
b. 10,600 Favorable
c. 17,800 unfavorable
d. 16,000 unfavorable
e. 10,600 unfavorable
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