Production Machine-hours Variable overhead cost per machine-hour Actual 21,000 units 13,300 hours $34.00 Budgets 24,000 units 14,400 hours $34.25
Production Machine-hours Variable overhead cost per machine-hour Actual 21,000 units 13,300 hours $34.00 Budgets 24,000 units 14,400 hours $34.25
Chapter8: Standard Costs And Variances
Section: Chapter Questions
Problem 11EB: Fitzgerald Company manufactures sewing machines, and they produced 2,500 this past month. The...
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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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Question
![Ex6-Russo Corporation manufactured 21,000 air conditioners during November. The
overhead cost-allocation base is $34.25 per machine-hour. The following variable overhead
data pertain to November:
Actual Budgeted Production 21,000 units 24,000 units Machine-hours 13,300 hours 14,400
hours Variable overhead cost per machine-hour: $34.00 $34.25 What is the variable
overhead spending variance?
Production
Machine-hours
Variable overhead cost per machine-hour
Actual
21,000 units
13,300 hours
$34.00
1. Determine the variable overhead spending variance
2. Indicate if the variance unfavourable or favourable
3. Comment in the results is requirement
Budgets
24,000 units
14,400 hours
$34.25](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F61c3a333-6075-4018-82da-2a2630571586%2F61e60795-4ce0-4291-b209-abde83d1f955%2F8dkzrg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Ex6-Russo Corporation manufactured 21,000 air conditioners during November. The
overhead cost-allocation base is $34.25 per machine-hour. The following variable overhead
data pertain to November:
Actual Budgeted Production 21,000 units 24,000 units Machine-hours 13,300 hours 14,400
hours Variable overhead cost per machine-hour: $34.00 $34.25 What is the variable
overhead spending variance?
Production
Machine-hours
Variable overhead cost per machine-hour
Actual
21,000 units
13,300 hours
$34.00
1. Determine the variable overhead spending variance
2. Indicate if the variance unfavourable or favourable
3. Comment in the results is requirement
Budgets
24,000 units
14,400 hours
$34.25
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