Lighter Incorporated planned and manufactured 410,000 units of its single product in 2022, its first year of operations. Variable manufacturing costs were $52 per unit of production. Planned and fixed manufacturing costs were $810,000. Marketing and administrative costs (all fixed) were $610,000 in 2022. Lighter Incorporated sold 197,000 units of product in 2022 at $67 per unit. Sales for 2022 are calculated to be:
Lighter Incorporated planned and manufactured 410,000 units of its single product in 2022, its first year of operations. Variable manufacturing costs were $52 per unit of production. Planned and fixed manufacturing costs were $810,000. Marketing and administrative costs (all fixed) were $610,000 in 2022. Lighter Incorporated sold 197,000 units of product in 2022 at $67 per unit. Sales for 2022 are calculated to be:
Chapter1: Financial Statements And Business Decisions
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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.
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Lighter Incorporated planned and manufactured 410,000 units of its single product in 2022, its first year of operations. Variable manufacturing costs were $52 per unit of production. Planned and fixed manufacturing costs were $810,000. Marketing and administrative costs (all fixed) were $610,000 in 2022. Lighter Incorporated sold 197,000 units of product in 2022 at $67 per unit.
Sales for 2022 are calculated to be:
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