Output level in units and corresponding production overhead costs for Opti Ltd for three months are as follows: Output (Units) 160,000 110,000 240,000 Production overhead costs January February March €556,000 €416,000 €780,000 Production overheads include both a fixed and variable element. Calculate the total fixed production overhead costs for an output of 142,000 units.
Output level in units and corresponding production overhead costs for Opti Ltd for three months are as follows: Output (Units) 160,000 110,000 240,000 Production overhead costs January February March €556,000 €416,000 €780,000 Production overheads include both a fixed and variable element. Calculate the total fixed production overhead costs for an output of 142,000 units.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter7: The Master Budget And Flexible Budgeting
Section: Chapter Questions
Problem 12E
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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.
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