The underapplied or overapplied overhead for September is:
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.
Badour Inc. is a job-order manufacturer. The company uses a predetermined
| September 1, inventories: | ||||
| Materials | $ | 9,000 | ||
| Work-in-process (All Job X) | 37,400 | |||
| Finished goods | 80,400 | |||
| Materials purchases | $ | 125,000 | ||
| Direct materials requisitioned: | ||||
| Job X | $ | 54,500 | ||
| Job Y | 40,000 | |||
| Direct labor hours: | ||||
| Job X | 5,000 | |||
| Job Y | 4,500 | |||
| Labor costs incurred: | ||||
| Direct labor ($6.00 per hour) | $ | 57,000 | ||
| Indirect labor | 16,200 | |||
| Factory supervisory salaries | 7,200 | |||
| Rental costs: | ||||
| Factory | $ | 8,400 | ||
| Administrative offices | 2,200 | |||
| Total equipment |
||||
| Factory | $ | 9,000 | ||
| Administrative offices | 1,900 | |||
| Indirect materials used | $ | 14,400 | ||
The underapplied or overapplied overhead for September is:
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