Analysis of differential revenues and costs -- special order a include the formula here Increased revenue Differential costs: Selling: Per unit variable cost Units in special order Total variable costs Fixed cost increment: Total volume required by special order Extra volume Extra cost Profit/(loss) on special order b C
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.
Can somebody check my work on the variable costing income statement in the screenshot attached?
Summarized data for 2019 (the first year of operations) for Gorman Products, In. are as follows
| Sales (70,000 units) | $2,800,000 |
| Production costs (80,000 units): | |
| Direct materials | 880,000 |
| Direct labor | 720,000 |
| Manufacturing |
|
| Variable | 544,000 |
| Fixed | 320,000 |
| Operating expenses: | |
| Variable | 175,000 |
| Fixed | 240,000 |
| 60,000 | |
| Real estate taxes | 18,000 |
| Personal property taxes (inventory and equipment | 28,000 |
| Personnel department expenses | 30,000 |
Problem
b) Prepare an income statement based on variable costing
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