DiDonato Supplies manufactures two versions of presentation remotes: Basic and Laser. Both models go through the same assembly process and are produced in the same plant. The difference between the models is in the additional parts for the laser model as well as the cost of the parts themselves. The following data are available for the year just ended: Basic Laser Total Number of units 250,000 60,000 310,000 Parts cost per unit $ 12 $ 25 Other costs: Direct labor $ 744,000 Indirect materials 190,000 Overhead 848,500 Total $ 1,782,500 Required: DiDonato uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost per unit of the Basic and Laser models for the year just ended. (Round "Unit cost" 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.
Problem 6-60 (Static) Operation Costing (LO 6-6)
DiDonato Supplies manufactures two versions of presentation remotes: Basic and Laser. Both models go through the same assembly process and are produced in the same plant. The difference between the models is in the additional parts for the laser model as well as the cost of the parts themselves. The following data are available for the year just ended:
| Basic | Laser | Total | ||||
| Number of units | 250,000 | 60,000 | 310,000 | |||
| Parts cost per unit | $ | 12 | $ | 25 | ||
| Other costs: | ||||||
| Direct labor | $ | 744,000 | ||||
| Indirect materials | 190,000 | |||||
| 848,500 | ||||||
| Total | $ | 1,782,500 | ||||
Required:
DiDonato uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost per unit of the Basic and Laser models for the year just ended. (Round "Unit cost" to 2 decimal places.)
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