Having joined the company as a fresh graduate , the CFO call you to her office an gave you a report that shows the direct cost categories and budgeted amounts for the widgets that your company manufactures: Standard Costs Input per One output unit Cost per input Direct Materials 1.00 KG $7.50/KG Direct Labor 0.30 HR $9.00/HR Direct Marketing 0.50 HR $3.00/HR Actual performance for the company is shown below based on 4,000 Actual Unit produced: Direct Materials: Direct Manufacturing labor: Direct Marketing labor: Materials costs Labor costs $11,470 Labor costs $5,880 $30,225 Labor-hours of input Labor-hours of input Input purchased and used 3,900 1,240 2,100 Actual price per hour Actual price per Actual price per input $9.25 hour $2.80 $7.75
Having joined the company as a fresh graduate , the CFO call you to her office an gave you a report that shows the direct cost categories and budgeted amounts for the widgets that your company manufactures: Standard Costs Input per One output unit Cost per input Direct Materials 1.00 KG $7.50/KG Direct Labor 0.30 HR $9.00/HR Direct Marketing 0.50 HR $3.00/HR Actual performance for the company is shown below based on 4,000 Actual Unit produced: Direct Materials: Direct Manufacturing labor: Direct Marketing labor: Materials costs Labor costs $11,470 Labor costs $5,880 $30,225 Labor-hours of input Labor-hours of input Input purchased and used 3,900 1,240 2,100 Actual price per hour Actual price per Actual price per input $9.25 hour $2.80 $7.75
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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