Budgeted fixed overheads were 4,20,000, budgeted production was 30,000 units, fixed overhead cost was over absorbed by 16,000 and fixed overhead expenditure variance was at 30,000 (F). The company follows absorption costing. Find out the actual production.
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.
Budgeted fixed
The company follows absorption costing.
Find out the actual production.
Step by step
Solved in 2 steps