The following data is used for questions 5.8 and 5.9 Budgeted machine hours 8,500 Budgeted overhead costs £148,750 Actual machine hours 7,928 Actual overhead costs £146,200 5.8 Based on the data given above, the machine hour overhead absorption rate is: Select one: A. £17.50 B. £17.20 C. £18.44 D. £18.76 5.9 Based on the data given above, the amount of overhead under/over absorbed is: Select one: A. £2,550 under-absorbed B. £2,529 over-absorbed C. £2,550 over-absorbed D. £7,460 under-absorbed
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.
The following data is used for questions 5.8 and 5.9
Budgeted machine hours 8,500
Budgeted
Actual machine hours 7,928
Actual overhead costs £146,200 5.8
Based on the data given above, the machine hour overhead absorption rate is:
Select one: A. £17.50 B. £17.20 C. £18.44 D. £18.76 5.9
Based on the data given above, the amount of overhead under/over absorbed is:
Select one: A. £2,550 under-absorbed B. £2,529 over-absorbed C. £2,550 over-absorbed D. £7,460 under-absorbed
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