Bonarita Merger products the popular Walangkati face powder and has in its budget the following standards for one kilo of the face powder: Ingredients (Input) Paminta (20%) Gawgaw (70%) Standard Quantity (Grams) Standard Unit Cost Standard Cost 200 P 3.00 P 600 P 2,800 P 500 P 3,900 700 P 4.00 Atsuete (10%) 100 P 5.00 ТOTAL 1,000 The company reported the following production and cost data for the period: Standard Quantity (Grams) Ingredients (Input) Standard Unit Cost Standard Cost P 4.00 P 3.00 Paminta 45,000 P 180,000 P 375,000 P 180,000 P 735,000 Gawgaw 125,000 Atsuete 30,000 P 6.00 ТOTAL 200,000 Walangkati face powder production totalled 190 kilos.

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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.