In Dept 1, units started is 10,000 (units); ending WIP is 2,000 units. No beginning WIP. Cost per EUP under WA for DM and CC are 3 per unit and 2 per unit, respectively. DM are added at the beginning and Ending WIP is 60% incomplete as to CC. 1. Compute the total added cost during the period. 2. Compute the cost of ending WIP.
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.
In Dept 1, units started is 10,000 (units); ending WIP is 2,000 units. No beginning WIP. Cost per EUP under WA for DM and CC are 3 per unit and 2 per unit, respectively. DM are added at the beginning and Ending WIP is 60% incomplete as to CC.
1. Compute the total added cost during the period.
2. Compute the cost of ending WIP.
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