n Corporation bases its overhead rate on direct labour hours. The expected direct labour hours at the beginning of the year were 21,800 hours, and the total estimated manufacturing overhead was $497,040. Actual direct labour hours for the year were 21,500 hours at the end of the year, and actual manufacturing overhead was $492,040. At the conclusion of the year, the following expenses were incurred: A. $1,840 underapplied B. $6,840 overapplied
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.
Q.
John Corporation bases its
A. $1,840 underapplied
B. $6,840 overapplied
C. $6,840 underapplied
D. $1,840 overapplied
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