Exercise 17-22 (Algo) Variable Cost Variances: Materials Purchased and Materials Used Are Not Equal (LO 17-2) Fischer Fabrication reported the following information concerning its direct materials: Direct materials purchased (actual) $ 374,600 $360,000 Standard cost of materials purchased $ 332,000 Standard price times actual amount of materials used Actual production Standard direct materials costs per unit produced Required: Compute the direct materials cost variances. Note: Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Direct Materials Price variance 56,600 units $6 Efficiency variance Total direct materials cost variance

Q: Classify the Costs for Financial Statements?

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Distinguish between Income and Expenditure Account and Receiptand Payment Account.

A: Difference between income and expenditure account and receipt and payment account:

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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.