Caraco Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product. Production volume 8,800 units 9,800 units Direct materials $ 83.90 per unit $ 83.90 per unit Direct labor $ 53.20 per unit $ 53.20 per unit Manufacturing overhead $ 75.40 per unit $ 68.40 per unit The best estimate of the total cost to manufacture 9,400 units is closest to: (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.
Caraco Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product.
| Production volume | 8,800 | units | 9,800 | units |
|---|---|---|---|---|
| Direct materials | $ 83.90 | per unit | $ 83.90 | per unit |
| Direct labor | $ 53.20 | per unit | $ 53.20 | per unit |
| Manufacturing |
$ 75.40 | per unit | $ 68.40 | per unit |
The best estimate of the total cost to manufacture 9,400 units is closest to: (Round your intermediate calculations to 2 decimal places.)
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