Evans Products uses a process costing system with two processing departments: the Mixing Department and the Finishing Department. In June, unit costs incurred by the Mixing Department amounted to $4.00 per unit. Per-unit costs transferred to the finished goods warehouse during the month amounted to $22. Work in process inventories are reduced to zero each month. The entry to record the sale of 3,500 units in June would include:
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.
Evans Products uses a
The entry to record the sale of 3,500 units in June would include:
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