Hamilton, Inc. produces chemicals for large biotech companies. If has the following data for manufacturing overhead costs during August 2017. Variable Fixed Actual costs incurred $30,500 $14,500 Costs allocated to products 27,000 14,800 Flexible budget -- 16,000 Actual input x budgeted rate 31,200 --- ( If no variance exists leave the dollar value blank. Label the variances as a favorable (F), unfavorable (U) or never a variance (N) ) Fill in the blanks. Variable Fixed 1. Spending variance $ $ 2. Efficiency variance 3. Production- volume variance 4. Flexible- budget variance 5. Underallocated (over allocated) manufacturing overhead
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.
Hamilton, Inc. produces chemicals for large biotech companies. If has the following data for
Variable Fixed
Actual costs incurred $30,500 $14,500
Costs allocated to products 27,000 14,800
Flexible budget -- 16,000
Actual input x budgeted rate 31,200 ---
( If no variance exists leave the dollar value blank. Label the variances as a favorable (F), unfavorable (U) or never a variance (N) )
Fill in the blanks.
Variable Fixed
1. Spending variance $ $
2. Efficiency variance
3. Production- volume variance
4. Flexible- budget variance
5. Underallocated (over allocated)
manufacturing overhead
Solve all otherwise leave
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