Martin Company uses a two-way analysis of overhead variances. Selected data for September 2012 production activity are as follows:Actual variable factory overhead P 196,000 Standard direct labor hours 33,000 Variable overhead rate per DLH P6.00 Actual direct labor hours 32,000 Assuming that budgeted fixed overhead costs are equal to actual fixed costs, the controllable variance for September 2012
Martin Company uses a two-way analysis of overhead variances. Selected data for September 2012 production activity are as follows:Actual variable factory overhead P 196,000 Standard direct labor hours 33,000 Variable overhead rate per DLH P6.00 Actual direct labor hours 32,000 Assuming that budgeted fixed overhead costs are equal to actual fixed costs, the controllable variance for September 2012
Chapter1: Financial Statements And Business Decisions
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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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Martin Company uses a two-way analysis of overhead variances.
Selected data for September 2012 production activity are as follows:Actual variable factory overhead
P 196,000
Standard direct labor hours
33,000
Variable overhead rate per DLH
P6.00
Actual direct labor hours
32,000
Assuming that budgeted fixed overhead costs are equal to actual fixed costs, the controllable variance for September 2012
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