Total actual overhead incurred -12,600 Fixed overhead budgeted Total - 3,300 Total tandard overhead rate per DLH -4 Variable overhead rate per DLH -3 Standard hours allowed for actual production -3,500 IT Company uses a standard cost system. Overhead cost information for Product CO for the month of October is as follows: What is the overall or net overhead variance? A.P1,200 F B.P1,200 U C.P1,400 F D.P1,200 U
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.
Total actual
Fixed overhead budgeted Total
- 3,300
Total tandard overhead rate per DLH -4
Variable overhead rate per DLH -3
Standard hours allowed for actual production
-3,500
IT Company uses a
What is the overall or net overhead variance?
A.P1,200 F
B.P1,200 U
C.P1,400 F
D.P1,200 U
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