Andrews Company manufactures a line of office chairs. Each chair takes $20 of direct materials and uses 1.9 direct labor hours at $16 per direct labor hour. The variable overhead rate is $1.20 per direct labor hour, and the fixed overhead rate is $1.60 per direct labor hour. Andrews Company expects to produce 20,000 chairs next year and expects to have 690 chairs in ending inventory. There is no beginning inventory of chairs. Required: Prepare a cost of goods sold budget for Andrews Company. Round your answers to the nearest dollar. Andrews Company Cost of Goods Sold Budget
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.
Preparing a Cost of Goods Sold Budget
Andrews Company manufactures a line of office chairs. Each chair takes $20 of direct materials and uses 1.9 direct labor hours at $16 per direct labor hour. The variable
Required:
Prepare a cost of goods sold budget for Andrews Company. Round your answers to the nearest dollar.
| Andrews Company | |
| Cost of Goods Sold Budget | |
| For the Coming Year | |
| $fill in the blank 2 | |
| fill in the blank 4 | |
| fill in the blank 6 | |
| fill in the blank 8 | |
| $fill in the blank 10 | |
| fill in the blank 12 | |
| $fill in the blank 14 |
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