step in overhead planning and control. After much effort and analysis, you estimated the following cost formulas and gathered the following actual cost data for March: Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,100 + $0.15 per machine-hour $38,100 +$1.60 per machine-hour $0.50 per machine-hour $94,500 + $2.10 per machine-hour $67,700 Actual Cost in March $ 20,450 $ 59,100 $ 8,300 $ 131,100 $ 69,400 During March, the company worked 15,000 machine-hours and produced 9,000 units. The company originally planned to work 17,000 machine-hours during March. Required: 1. Calculate the activity variances for March. 2. Calculate the spending variances for March.
step in overhead planning and control. After much effort and analysis, you estimated the following cost formulas and gathered the following actual cost data for March: Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,100 + $0.15 per machine-hour $38,100 +$1.60 per machine-hour $0.50 per machine-hour $94,500 + $2.10 per machine-hour $67,700 Actual Cost in March $ 20,450 $ 59,100 $ 8,300 $ 131,100 $ 69,400 During March, the company worked 15,000 machine-hours and produced 9,000 units. The company originally planned to work 17,000 machine-hours during March. Required: 1. Calculate the activity variances for March. 2. Calculate the spending variances for March.
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter20: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 2E: Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each...
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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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