17) Corp uses a normal cost system and had the following data available for 2010: Direct materials purchased on account $ 148,000 Direct materials requisitioned 82,000 Direct labor cost incurred 130,000 Factory overhead incurred 162,500 Cost of goods completed 292,000 Cost of goods sold 256,000 26,000 Beginning direct materials inventory Beginning WIP inventory 64,000 Beginning finished goods inventory Overhead application rate, as a percent of direct-labor costs 58,000 The ending balance of work-in-process (WIP) inventory is_ 18) The ending balance of finished goods (FG) inventory is 125 percent
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.
Inventory management enables the business organizations to reduce inventory expenditures as the items are produced or acquired as needed.
Different categories of inventory are:
- Raw material
- Work in progress
- Finished goods
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