Helland Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 30,000 Total fixed manufacturing overhead cost $ 189,000 Variable manufacturing overhead per direct labor-hour $ 2.50 The predetermined overhead rate is closest to: $2.50 per direct labor-hour $11.30 per direct labor-hour $6.30 per direct labor-hour $8.80 per direct labor-hour
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.
Helland Corporation uses a
Total direct labor-hours 30,000
Total fixed
Variable manufacturing overhead per direct labor-hour $ 2.50
The predetermined overhead rate is closest to:
$2.50 per direct labor-hour
$11.30 per direct labor-hour
$6.30 per direct labor-hour
$8.80 per direct labor-hour
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