Norman is calculating the company's total overhead variance for April. He knows the company paid $14,280 in overhead costs and that the production department produced 3,600 units for a total of 4,800 hours. He also knows that the company has a predetermined overhead rate of $3.00 per labor hour. What else does Norman need to know to complete his calculation? A Overhead fixed costs. B Budgeted overhead costs. C Standard hours allowed. D Overhead variable costs.
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.
Norman is calculating the company's total
A Overhead fixed costs.
B Budgeted overhead costs.
C Standard hours allowed.
D Overhead variable costs.
Step by step
Solved in 4 steps
