Home Insert Page Layout Formulas Data Review B 300,000 units 279,070 units 232,558 units 50 per unit 40,000 units 240,000 units 260,000 units 10 per unit $3,000,000 10 Total budgeted operating (non-manuf.) costs (all fixed) S 500,000| 1 Theoretical capacity 2 Practical capacity 3 Normal capacity utilization 4 Selling price 5 Beginning inventory 6 Production 7 Sales volume 8 Variable budgeted manufacturing cost 9 Total budgeted fixed manufacturing costs 24
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.
Magic Me is a manufacturer of magic kits. It uses absorption costing based on
There are no price, spending, or efficiency variances. Actual operating costs equal budgeted operating costs. The production-volume variance is written off to cost of goods sold. For each choice of denominator level, the budgeted production cost per unit is also the cost per unit of beginning inventory
Q. Reconcile the difference in operating income based on theoretical capacity and practical capacity with the difference in fixed manufacturing
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