PART 6 Standard Job Order Costing - Variance Analysis Special order lamps are manufactured in division S. Because of the precise nature of the process a standard cost system has been developed. The following standards are used for the special orders: Lamp Kits Standards Direct Labor Variable Overhead **Fixed Overhead Total $ 16,000000 per lamp 2,400000 per lamp (4 lamps/hr.) 0,250000 per lamp (4 lamps/hr.) 10,000000 per lamp $ 28,650000 ** Fixed overhead is based on expected production of 4,007 customized lamps each month. To keep records of the actual cost of a job, a Job Order Cast System has be developed. Entries are made to the Job Order System at actual cost (overhead is applied based on actual labor hours) while entries are made to the accounting system at standard. Variance analysis is used to analyze the differences. Job Order Costing Section On January 1, 20x2, Division S began Job 1101 for the Client, THE BIG CHILDREN STORE. The job called for 4,000 customized lamps. The following set of transactions occurred from January 5 until the job was completed: 5-ene Purchased 4,200 Lamp Kits $16.30 per kit. 9-ene 4,125 sets of Lamp Kits were requisitioned. 17-ene Payroll of 620 Direct Labor Hours @ $9.75 per hour. 30-ene Payroll of 670 Direct Labor Hours @ $10.00 per hour. 30-ene 3,993 lamps were completed and shipped. All materials requisitioned were used or scrapped. Month End Overhead Information Actual Variable Overhead $ 1.419,00 Actual Fixed Overhead $ 40.873,45