Calculate the current costs incurred for direct materials during the month of July. Select one: a. $60,192
Calculate the current costs incurred for direct materials during the month of July. Select one: a. $60,192
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter6: Process Costing
Section: Chapter Questions
Problem 20E: Holmes Products, Inc., produces plastic cases used for video cameras. The product passes through...
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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.
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Assume Towery Company uses a process costing system based on the weighted average method. Towery's accountant produces the following equivalent unit calculations for the month of July for the first department:
Equivalent Units
Direct Materials Conversion Costs
% Done Units % Done Units
Completed and transferred 100% 5,760 100% 5,760
Ending inventory 100% 1,080 70% 756
Equivalent units of production 6,840 6,516
Also, assume that the beginning inventory had accumulated $3,420 of materials and $9,516 of conversion costs in the previous month.
Finally, assume that during the month of July, the average cost per equivalent unit of materials and conversion costs were $8.30 and $24.25, respectively.
Calculate the current costs incurred for direct materials during the month of July.
Select one:
a. $60,192
b. $10,688
c. $53,352
d. None of the amounts listed.
e. $12,936
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