$38,200 indirect materials). Accrued direct labor cost of $49,000 and indirect labor cos eciation recorded on factory equipment, $104, 000. Other manufacturing overhead cos g October, $129,000. The company applies manufacturing overhead cost to production ed rate of $5 per machine - hour. A total of 76,000 machine - hours were used in Octob $512,000 according to their job cost sheets were completed during October and transfe
$38,200 indirect materials). Accrued direct labor cost of $49,000 and indirect labor cos eciation recorded on factory equipment, $104, 000. Other manufacturing overhead cos g October, $129,000. The company applies manufacturing overhead cost to production ed rate of $5 per machine - hour. A total of 76,000 machine - hours were used in Octob $512,000 according to their job cost sheets were completed during October and transfe
Chapter1: Financial Statements And Business Decisions
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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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Transcribed Image Text:The Polaris Company uses a job - order costing system. The following transactions occurred in October: Raw
materials purchased on account, $209,000. Raw materials used in production, $191,000 ($152, 800 direct
materials and $38, 200 indirect materials). Accrued direct labor cost of $49,000 and indirect labor cost of $
21,000. Depreciation recorded on factory equipment, $104,000. Other manufacturing overhead costs
accrued during October, $129,000. The company applies manufacturing overhead cost to production using
a predetermined rate of $5 per machine - hour. A total of 76, 000 machine - hours were used in October.
Jobs costing $512,000 according to their job cost sheets were completed during October and transferred to
Finished Goods. Jobs that had cost $452,000 to complete according to their job cost sheets were shipped to
customers during the month. These jobs were sold on account at 28% above cost.
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