$ 7 per unit Fixed overhead $ 221,650 per year Units produced 20,150 units Units sold 15,500 units Ending finished goods inventory 4,650 units
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.
Trio Company reports the following information for its first year of operations.
| Direct materials | $ 18 | per unit |
|---|---|---|
| Direct labor | $ 19 | per unit |
| Variable |
$ 7 | per unit |
| Fixed overhead | $ 221,650 | per year |
| Units produced | 20,150 | units |
| Units sold | 15,500 | units |
| Ending finished goods inventory | 4,650 | units |
1. Compute the product cost per unit using absorption costing.
2. Determine the cost of ending finished goods inventory using absorption costing.
3. Determine the cost of goods sold using absorption costing
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