A manufacturer uses activity-based costing to assign overhead costs to products. Budgeted cost information for selected activities for next year follows. Activity Purchasing Cleaning factory Providing utilities Activity cost pool Purchasing Factory Expected Cost $127,600 31,500 63,070 Expected Costs Compute activity rates for each of the cost pools. (Round your answers to 2 decimal places.) Expected Amount of Cost Driver Cost Driver Purchase orders Square feet Square feet 4,400 4,900 Activity Overhead Rate Expected Usage of Cost Driver 4,400 purchase orders 4,900 square feet 4,900 square feet per purchase order per square foot
A manufacturer uses activity-based costing to assign overhead costs to products. Budgeted cost information for selected activities for next year follows. Activity Purchasing Cleaning factory Providing utilities Activity cost pool Purchasing Factory Expected Cost $127,600 31,500 63,070 Expected Costs Compute activity rates for each of the cost pools. (Round your answers to 2 decimal places.) Expected Amount of Cost Driver Cost Driver Purchase orders Square feet Square feet 4,400 4,900 Activity Overhead Rate Expected Usage of Cost Driver 4,400 purchase orders 4,900 square feet 4,900 square feet per purchase order per square foot
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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