Lenox Solvents manufactures a special fluid at its Hazelridge plant. Operating data for June follow. Materials $ 2,499,000 Labor 214,200 Manufacturing overhead 865,300 The Hazelridge plant produced 1,220,000 liters in June. The plant never has any beginning or ending inventories. Required: Compute the cost per liter of liquid produced in June
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.
Lenox Solvents manufactures a special fluid at its Hazelridge plant. Operating data for June follow.
| Materials | $ 2,499,000 |
|---|---|
| Labor | 214,200 |
| Manufacturing |
865,300 |
The Hazelridge plant produced 1,220,000 liters in June. The plant never has any beginning or ending inventories.
Required:
Compute the cost per liter of liquid produced in June.
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