3. Zimmerman Corp. had 1,500 units of part M.O. on hand May 1, 2020, costing $21 each. Purchases of part M.O. during May were as follows. Units Unit Cost May 9 2,000 $22.00 17 3,500 23.00 26 1,000 24.00 A physical count on May 31, 2020, shows 2,000 units of part M.O. on hand. Using the FIFO method, what is the cost of part M.O. inventory at May 31, 2020? Using the LIFO method, what is the inventory cost? Using the average-cost method, what is the inventory cost?
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.
3. Zimmerman Corp. had 1,500 units of part M.O. on hand May 1, 2020, costing $21 each. Purchases of part M.O. during May were as follows.
| Units | Unit Cost | ||||
| May | 9 | 2,000 | $22.00 | ||
| 17 | 3,500 | 23.00 | |||
| 26 | 1,000 | 24.00 |
A physical count on May 31, 2020, shows 2,000 units of part M.O. on hand. Using the FIFO method, what is the cost of part M.O. inventory at May 31, 2020? Using the LIFO method, what is the inventory cost? Using the average-cost method, what is the inventory cost?
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