Cool Sky reports the following for its first year of operations. The company produced 40,000 units and sold 32,000 at a price of $140 per unit. Direct materials Direct labor $ 60 per unit $ 22 per unit
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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Cool Sky reports the following for its first year of operations. The company produced 40,000 units and sold 32,000 units
at a price of $140 per unit.
Direct materials
Direct labor
Variable overhead
Fixed overhead
Variable selling and administrative expenses
Fixed selling and administrative expenses
Per unit product cost using:
$
2a. Assume the company uses variable costing. Determine its total product cost per unit.
Variable:
costing
Total product cost per unit
$
$ 60 per unit
$ 22 per unit
$8 per unit
480,000 per year
$ 11 per unit
115,000 per year](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0f47a2be-a7a8-413e-ada4-052d1b6fdb61%2F83d0cebb-4e47-4815-a4d5-483c09235bee%2Fzx7jm9d_processed.jpeg&w=3840&q=75)
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