Idha Lumber Company grows, harvests, and process timber for use in construction. The following data pertain to the firm’s sawmill during November: Work-in-process 1/11 Direct material 75,000 Conversion 190,000 Costs incurred during November: Direct material 435,000 Conversion 670,000 The equivalent units of activity for November were as follows: 8,000 equivalent units of direct material and 2,000 equivalent units of conversion activity. Required: Calculate the cost per equivalent unit, for both 1. direct material Answer : ........... 2. conversion, Answer: ........... during November. Use weighted-average process costing.
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.
Idha Lumber Company grows, harvests, and process timber for use in construction. The following data pertain to the firm’s sawmill during November:
Work-in-process 1/11
Direct material 75,000
Conversion 190,000
Costs incurred during November:
Direct material 435,000
Conversion 670,000
The equivalent units of activity for November were as follows: 8,000 equivalent units of direct material and 2,000 equivalent units of conversion activity.
Required: Calculate the cost per equivalent unit, for both
1. direct material Answer : ...........
2. conversion, Answer: ...........
during November. Use weighted-average
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