Zapato Company produces two types of boots: vaquero and vaquera. There are four activities associated with the two products. Drivers for the four activities are as follows: Vaquero Vaquera Cutting hours 4,000 5,900 Assembly hours 2,650 4,750 Inspection hours 945 2,390 Rework hours 200 600 The following activity data have been collected: Cutting $277,200 Assembling $222,000 Inspecting $53,360 Reworking $48,000 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.
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.
Activity Rates
Zapato Company produces two types of boots: vaquero and vaquera. There are four activities associated with the two products. Drivers for the four activities are as follows:
| Vaquero | Vaquera | |||
| Cutting hours | 4,000 | 5,900 | ||
| Assembly hours | 2,650 | 4,750 | ||
| Inspection hours | 945 | 2,390 | ||
| Rework hours | 200 | 600 |
The following activity data have been collected:
| Cutting | $277,200 |
| Assembling | $222,000 |
| Inspecting | $53,360 |
| Reworking | $48,000 |
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.
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