Babuca Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product. Production volume 8,900 units 10,000 units Direct materials $ 535,780 $ 602,000 Direct labor $ 200,250 $ 225,000 Manufacturing overhead $ 1,004,200 $ 1,027,630 The best estimate of the total variable manufacturing cost per unit is: Note: Round your intermediate calculations to 2 decimal places.
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.
Babuca Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product. Production volume 8,900 units 10,000 units Direct materials $ 535,780 $ 602,000 Direct labor $ 200,250 $ 225,000 Manufacturing
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
