Production-volume overhead variance

Assignment Help Accounting Basics

Reference no: EM13144196

Abby Company has just implemented a new cost accounting system that provides two variances for fixed manufacturing overhead. While the company's managers are familiar with the concept of spending variances, they are unclear as to how to interpret the production-volume overhead variances. Currently, the company has a production capacity of 54,000 units a month, although it generally produces only 46,000 units. However, in any given month the actual production is probably something other than 46,000.

Required:

a. Does the production-volume overhead variance measure the difference between the 54,000 and 46,000, or the difference between the 46,000 and the actual monthly production? Explain.

Reference no: EM13144196

Questions Cloud

Intergroup conflict : Answer the above points in a 3- to 4-page paper. Your paper should be double-spaced, typed in 12-point Times New Roman font with normal one-inch margins, written in APA style, and free of typographical and grammatical errors. It should include a titl..

Volume-based system and strategic activity-based system : Prepare a table that illustrates the percentage change in costs between the volume-based system and the strategic activity-based system.

Define how many grams of lead : A 15.00 mL sample of a 0.100 M solution of lead(II) nitrate is reacted with 10.00 mL of 0.170 M sodium chloride. How many grams of lead(II)

Relative advantages of partnership : What are the relative advantages of partnership versus limited partnership as a form of doing business? What legal principles are most likely to bite partnerships?

Production-volume overhead variance : Does the production-volume overhead variance measure the difference between the 54,000 and 46,000, or the difference between the 46,000 and the actual monthly production? Explain.

Calculate the specific heat capacity of the metal in j/g°c : If 69.5 kJ of heat is applied to a 1034 g block of metal, the temperature of the metal increases by 11.4°C. Calculate the specific heat capacity of the metal in J/g°C.

What is the company times interest earned ratio : Tree Frog Company is organized as a LLC and pays no income taxes. The company has fixed interest expense of $5,750, Sales of $253,000 and variable expenses of $189,750. What is the company's times interest earned ratio?

What considerations should the owners make in termination : What considerations should the owners make in this termination? Should they consider making an S election and then later, terminating the S corporation? If you were their tax advisor, what would you recommend?

Calculate the specific heat capacity of the metal in j/g°c : If 69.5 kJ of heat is applied to a 1038 g block of metal, the temperature of the metal increases by 11.4°C. Calculate the specific heat capacity of the metal in J/g°C.

User Account

All Pages