Krepps Corporation produces a single product. Last year, Krepps manufactured 26,030 units and sold 21,320 units. Production costs for the year were as follows: Direct materials $ 192,622 Direct labor $ 143,165 Variable manufacturing overhead $ 210,843 Fixed manufacturing overhead $ 494,570 Sales totaled
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.
Krepps Corporation produces a single product. Last year, Krepps manufactured 26,030 units and sold 21,320 units. Production costs for the year were as follows:
Direct materials $ 192,622
Direct labor $ 143,165
Variable manufacturing
Fixed manufacturing overhead $ 494,570
Sales totaled $983,250 for the year, variable selling and administrative expenses totaled $120,060, and fixed selling and administrative expenses totaled $161,386. There was no beginning inventory. Assume that direct labor is a variable cost. Under absorption costing, the ending inventory for the year would be valued at:
Multiple Choice
$188,400
$213,800
$212,200
$202,600
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