Kirchoff.,manufactures a product with the following costs: Direct materials 18.00 Direct labor 11.90 Variable manufacturing overhead 2.10 Fixed manufacturing overhead 1,422,000 Variable SG&A expenses 3.60 Fixed SG&A expenses 1,540,500 The pricing are based on budgeted production and sales of 79,000 units per year. Required: Determine the selling price per unit, assuming a mark-up of 25% drsired under each of the following methods: 1. Variable manufacturing cost 2. Production cost 3. Variable/marginal cost
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.
Kirchoff.,manufactures a product with the following costs:
Direct materials 18.00
Direct labor 11.90
Variable manufacturing
Fixed manufacturing overhead 1,422,000
Variable SG&A expenses 3.60
Fixed SG&A expenses 1,540,500
The pricing are based on budgeted production and sales of 79,000 units per year.
Required: Determine the selling price per unit, assuming a mark-up of 25% drsired under each of the following methods:
1. Variable
2. Production cost
3. Variable/marginal cost
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