The records of Norton, Inc. show the following for July. Standard labor-hours allowed per unit of output Standard variable overhead rate per standard direct labor-hour Good units produced Actual direct labor-hours worked Actual total direct labor Direct labor efficiency variance Actual variable overhead Direct labor: Price variance Efficiency variance Variable overhead: Required: Compute the direct labor and variable overhead price and efficiency variances. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) Price variance Efficiency variance U $ 48,000 U $ F U 1.2 45 60,000 73,600 $2,370,000 48,000 U $3,072,000 $
The records of Norton, Inc. show the following for July. Standard labor-hours allowed per unit of output Standard variable overhead rate per standard direct labor-hour Good units produced Actual direct labor-hours worked Actual total direct labor Direct labor efficiency variance Actual variable overhead Direct labor: Price variance Efficiency variance Variable overhead: Required: Compute the direct labor and variable overhead price and efficiency variances. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) Price variance Efficiency variance U $ 48,000 U $ F U 1.2 45 60,000 73,600 $2,370,000 48,000 U $3,072,000 $
Chapter1: Financial Statements And Business Decisions
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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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Transcribed Image Text:The records of Norton, Inc. show the following for July.
Standard labor-hours allowed per unit of output
Standard variable overhead rate per standard direct labor-hour
Good units produced
Actual direct labor-hours worked
Actual total direct labor
Direct labor efficiency variance
Actual variable overhead
Direct labor:
Price variance
Efficiency variance
Variable overhead:
Required:
Compute the direct labor and variable overhead price and efficiency variances. (Do not round intermediate calculations. Indicate the
effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
Price variance
Efficiency variance
U
$ 48,000 U
$
F
U
1.2
45
60,000
73,600
$2,370,000
48,000 U
$3,072,000
$
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