A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: What is the net operating income for the month under absorption costing?
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.
A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:
What is the net operating income for the month under absorption costing?
![Selling price .
$126
Units in beginning inventory.
Units produced...
Units sold..
8,500
8,300
200
Units in ending inventory..
Variable costs per unit:
Direct materials .
Direct labor.
Variable manufacturing overhead...
Variable selling and administrative.
Fixed costs:
Fixed manufacturing overhead. .
Fixed selling and administrative .
$36
$52
$2
$9
$127,500
$91,300](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faf4d671a-f533-4e71-bce1-cf50c495a018%2Fe39ad353-6599-44e0-b7bf-bd024d72c611%2Fq5lnlss_processed.png&w=3840&q=75)
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