Hough Company manufactures and sells a single product. A partially completed schedule of the company’s total and per unit costs over a relevant range of 80,000 to 120,000 units produced and sold each year is given below: Units produced and sold 80,000 100,000 Total costs: Variable costs P240,000.00 Fixed costs 320,000.00 Total costs 560,000.00 Variable cost per unit and Total Cost per sold unit are? A. Variable Cost/unit = P3.00; Total Cost/unit = P3.20 B.Variable Cost/unit = P3.00; Total Cost/unit = P5.60 C.Variable Cost/unit = P3.00; Total Cost/unit = P7.00 D.Variable Cost/unit = P3.00; Total Cost/unit = P6.20
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.
Hough Company manufactures and sells a single product. A partially completed schedule of the company’s total and per unit costs over a relevant range of 80,000 to 120,000 units produced and sold each year is given below:
80,000 100,000
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