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Sir,
Kindly help with this question.A manufacturing company operates a standard absorption costing system. Last month, they budgeted on using 30,000 production hours and on a total fixed prod o/H cost of $180,000.
The actual hour worked last month were 28,000 and standard hours for actual production were 31000.
What was the fixed production overhead capacity variance for last month.Thanks
The standard cost per hour is 180,000/30,000 = $6
The actual hours were 28,000 and the budgeted hours were 30,000, so the capacity variance is (28,000 – 30,000) x $6 = $12,000 (adverse)
(The free lectures on variances will be useful for you)
Dear Sir,
i cannot understand capital budgeting topic effective rate of interest can you explain with simple examples thanksHave you watched the free lecture, because I explain it there?
(Please start a new thread when it is a different topic – this has nothing to do with variance analysis!)
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