Shorts, Inc. produces small engines. For last year's operations, the following data were gathered: Units produced: 100,000 Direct labor: 160,000 hours @ $12.00 Actual variable overhead: $1,300,000 Shorts, Inc. employs a standard costing system. During the year, a variable overhead rate of $8.00 was used. The labor standard requires 1.5 hours per unit produced. The variable overhead spending and efficiency variances are, respectively $20,000 U and $80,000 F. $100,000 U and $20,000 U. $20,000 U and $80,000 U. $100,000 U and $20,000 F. None of these.
Shorts, Inc. produces small engines. For last year's operations, the following data were gathered: Units produced: 100,000 Direct labor: 160,000 hours @ $12.00 Actual variable overhead: $1,300,000 Shorts, Inc. employs a standard costing system. During the year, a variable overhead rate of $8.00 was used. The labor standard requires 1.5 hours per unit produced. The variable overhead spending and efficiency variances are, respectively $20,000 U and $80,000 F. $100,000 U and $20,000 U. $20,000 U and $80,000 U. $100,000 U and $20,000 F. None of these.
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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Shorts, Inc. produces small engines. For last year's operations, the following data were gathered: Units produced: 100,000 Direct labor: 160,000 hours @ $12.00 Actual variable overhead : $1,300,000 Shorts, Inc. employs a standard costing system. During the year, a variable overhead rate of $8.00 was used. The labor standard requires 1.5 hours per unit produced. The variable overhead spending and efficiency variances are, respectively
$20,000 U and $80,000 F.
$100,000 U and $20,000 U.
$20,000 U and $80,000 U.
$100,000 U and $20,000 F.
None of these.
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