The total factory overhead for Diva-nation Inc. is budgeted for the year at $180,000. Divanation manufactures two types of men's pants: jeans and khakis. The jeans and khakis each require 0.10 direct labor hour for manufacture. Each product is budgeted for 20,000 units of production for the year. Determine (a) the total number of budgeted direct labor hours for the year, (b) the single plantwide factory overhead rate, and (c) the factory overhead allocated per unit for each product using the single plantwide factory overhead rate
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 total factory
require 0.10 direct labor hour for manufacture. Each product is budgeted for 20,000 units of
production for the year. Determine (a) the total number of budgeted direct labor hours for the
year, (b) the single plantwide factory overhead rate, and (c) the factory overhead allocated per
unit for each product using the single plantwide factory overhead rate.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
