5th Edition

ISBN: 9780134128528

Author: Karen W. Braun, Wendy M. Tietz

Publisher: PEARSON

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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 …

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 t…

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Textbook Question

Chapter 11, Problem 11.12SE

Calculate and interpret overhead variances (Learning Objective 6)

Assume that the Janis Corporation’s manufacturing facility actually incurred $2,980,000 of manufacturing overhead for the year. Total fixed manufacturing overhead was budgeted at $3,010,000. Using a standard costing system, the company allocated $2,941,000 of fixed manufacturing overhead to production.

Requirements

1. Calculate the total fixed manufacturing overhead variance. What does this tell managers?
2. Determine the fixed overhead budget variance. What does this tell managers?
3. Determine the fixed overhead volume variance. What does this tell managers?
4. Doublecheck: Do the two variances (computed in Requirements 2 and 3) sum to the total overhead variance computed in Requirement 1?

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

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Chapter 11, Problem 11.11SE

Chapter 11, Problem 11.13SE

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Chapter 11 Solutions

Managerial Accounting (5th Edition)

Ch. 11 - (Learning Objective 1) Which of the following is...Ch. 11 - (Learning Objective 2) The direct material price...Ch. 11 - Prob. 3QC Ch. 11 - Prob. 4QC Ch. 11 - Prob. 5QC Ch. 11 - (Learning Objective 4) Which of the following is...Ch. 11 - Prob. 7QC Ch. 11 - (Learning Objective 6) Which of the following is...Ch. 11 - Prob. 9QC Ch. 11 - (Learning Objective 7Appendix) Which of the...

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Solution Summary: The author explains the fixed overhead budget variance, which is the difference between the budgeted and the standard fix overhead cost allocated to production.

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