Windsor Co. incur $1067500 of overhead costs each year in its three main departments, machining ($610000), inspections ($305000) and packing ($152500). The machining department works 4000 hours per year, there are 500 inspections per year, and the packing department packs 1000 orders per year. Information about Windsor’s two products is as follows: Product X Product Y Machining hours 1000 3000 Inspections 100 400 Orders packed 350 650 Direct labor hours 1700 1800 Using ABC, how much overhead is assigned to Product X this year?
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.
Windsor Co. incur $1067500 of
|
|
Product X |
Product Y |
|
Machining hours |
1000 |
3000 |
|
Inspections |
100 |
400 |
|
Orders packed |
350 |
650 |
|
Direct labor hours |
1700 |
1800 |
Using ABC, how much overhead is assigned to Product X this year?
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