facturing costs per unit and administrative expenses per unit turing overhead (in total) nd administrative d during the year ng year expenses (in total) $61 $8 $32,000 $6,000 2,000 900
facturing costs per unit and administrative expenses per unit turing overhead (in total) nd administrative d during the year ng year expenses (in total) $61 $8 $32,000 $6,000 2,000 900
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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:Watkins Company manufactures widgets. The following data is related to sales and production of the widgets for last year.
Selling price per unit
$170
Variable manufacturing costs per unit
$61
Variable selling and administrative expenses per unit
$8
Fixed manufacturing overhead (in total)
Fixed selling and administrative expenses (in total)
Units produced during the year
Units sold during year
Using variable costing, what is the contribution margin for last year?
O A. $90,900
B. $54,900
O C. $52,900
OD. $153,000
$32,000
$6,000
2,000
900
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