The following data for November have been provided by Hunn Corporation, a producer of precision drills for oil exploration: Budgeted production Standard machine-hours per drill Standard indirect labor Standard power Actual production Actual machine-hours Actual indirect labor Actual power Indirect labor Power 4,100 drills Variable Overhead Rate Variance 9.4 machine-hours $ 9.20 per machine-hour $ 2.80 per machine-hour 4,300 drills 35,750 machine-hours Required: Compute the variable overhead rate variances for indirect labor and for power for November. Indicate whether each of the variances is favorable (F) or unfavorable (U). (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) $ 333,520 $ 96,788
The following data for November have been provided by Hunn Corporation, a producer of precision drills for oil exploration: Budgeted production Standard machine-hours per drill Standard indirect labor Standard power Actual production Actual machine-hours Actual indirect labor Actual power Indirect labor Power 4,100 drills Variable Overhead Rate Variance 9.4 machine-hours $ 9.20 per machine-hour $ 2.80 per machine-hour 4,300 drills 35,750 machine-hours Required: Compute the variable overhead rate variances for indirect labor and for power for November. Indicate whether each of the variances is favorable (F) or unfavorable (U). (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) $ 333,520 $ 96,788
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:The following data for November have been provided by Hunn Corporation, a producer of precision drills for oil exploration:
Budgeted production
4,100 drills
Standard machine-hours per drill
Standard indirect labor
Standard power
Actual production
Actual machine-hours
Actual indirect labor
Actual power
Indirect labor
Power
9.4 machine-hours
$ 9.20 per machine-hour
$ 2.80 per machine-hour
4,300 drills
35,750 machine-hours
Required:
Compute the variable overhead rate variances for indirect labor and for power for November. Indicate whether each of the variances is
favorable (F) or unfavorable (U).
(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero
variance). Input all amounts as positive values.)
Variable Overhead
Rate Variance
$ 333,520
$ 96,788
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