Furco uses a job-cost system. It applies overhead based on direct labor hours. Total manufacturing costs for the year were $1,440,000 (excluding BWIP) based on actual costs and overhead applied. Cost of goods manufactured was $1,260,000 based on actual costs and overhead applied. WIP at January 1 was 50% of WIP at December 31. Question What were the total manufacturing costs to account for? A.$1,620,000 B.$1,800,000 C.$1,980,000 D.$2,700,000
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.
Question
What were the total manufacturing costs to account for?
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A.$1,620,000
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B.$1,800,000
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C.$1,980,000
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D.$2,700,000
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