he addition of water at the start of the process in Dept. B of Mcdo Mfg. Co., increases the quantity by 5%. The following data pertain to its production for March: Quantity Data: In process, March 1 12,000 units, 1/4 done Transferred in 80,000 units In process, March 31 10,000 units, 2/5 done Cost Data: In process, March 1 17,735 Breakdown: Cost from Department A P11,800 Cost from Department B: Materials- P3,125; Labor- P1,490; FOH- P1,320 Transferred in 86,120 Cost added in September: Materials- P21,835; Labor- P43,510; Foh- P34,680 Materials are added at the start of the process while conversion costs are applied evenly. Using the weighted average method, what should be the accumulated cost of work in process as of March 31
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.
PROBLEM 3- Average costing
The addition of water at the start of the process in Dept. B of Mcdo Mfg. Co., increases the quantity by 5%. The following data pertain to its production for March:
Quantity Data:
In process, March 1 12,000 units, 1/4 done
Transferred in 80,000 units
In process, March 31 10,000 units, 2/5 done
Cost Data:
In process, March 1 17,735
Breakdown:
Cost from Department A P11,800
Cost from Department B:
Materials- P3,125; Labor- P1,490; FOH- P1,320
Transferred in 86,120
Cost added in September:
Materials- P21,835; Labor- P43,510; Foh- P34,680
Materials are added at the start of the process while conversion costs are applied evenly. Using the weighted average method, what should be the accumulated cost of work in process as of March 31
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