Crunchem Cereal Company incurred the following actual costs during 20x1. $ 285,000 150,000 315,000 Direct material used Direct labor Manufacturing overhead The firm's predetermined overhead rate is 210 percent of direct-labor cost. The January 1 inventory balances were as follows: Raw material $ 29,000 Work in process 38,000 44,000 Finished goods Each of these inventory balances was 10 percent higher at the end of the year.
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.
Prepare a schedule of cost of goods manufactured for 20x1.
Cost of Goods Manufactured (COGM) represents the total production cost of goods completed during a specific period, including direct labor, materials, and overhead expenses.
COGM is a crucial financial metric that helps businesses assess their manufacturing efficiency and set pricing strategies.
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