Arden Company reported the following costs and expenses for the most recent month: Direct materials . . . . . . . . . . . . . . . . . . . . . . $80,000Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . $42,000Manufacturing overhead . . . . . . . . . . . . . . . $19,000Selling expenses . . . . . . . . . . . . . . . . . . . . . $22,000Administrative expenses . . . . . . . . . . . . . . . $35,000 1. What is the total amount of product costs?2. What is the total amount of period costs?3. What is the total amount of conversion costs?4. What is the total amount of prime costs?
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.
Arden Company reported the following costs and expenses for the most recent month:
Direct materials . . . . . . . . . . . . . . . . . . . . . . $80,000
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . $42,000
Manufacturing
Selling expenses . . . . . . . . . . . . . . . . . . . . . $22,000
Administrative expenses . . . . . . . . . . . . . . . $35,000
1. What is the total amount of product costs?
2. What is the total amount of period costs?
3. What is the total amount of conversion costs?
4. What is the total amount of prime costs?
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