Sandler Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below: Estimated machine hours 73,000 Estimated variable manufacturing overhead 3.49 per machine hour Estimated total fixed manufacturinf overhead 838,770 Required: Compute the company's predetermined overhead rate.
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.
Sandler Corporation bases its predetermined
Estimated machine hours 73,000
Estimated variable manufacturing overhead 3.49 per machine hour
Estimated total fixed manufacturinf overhead 838,770
Required: Compute the company's predetermined overhead rate.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
