Manufacturing Overhead Raw Materials 15,000 Credits 120,000 Bal. 1/1 Debits 230,000 Crects Debits Bat. 12/31 25,000 Factory Wages Payable Work in Process 185,000 Bal. 1/1 Credits Bal. 12/31 Debits Bal 1/1 Direct meteriais Direct labor 20,000 Credits 90,000 150,000 240,000 470,000 9.000 180,000 4,000 Overhead Bal. 12/31 Finished Goods Cost of Goods Sold Bat 1/1 40,000 Credits Debits Debits Bat 12/31 60,000
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.
T-Account Analysis of Cost Flows
Selected T-accounts of Moore Company are given below for the just completed year:
Required:
1. What was the cost of raw materials used in production during the year?
2. How much of the materials in (1) above consisted of indirect materials?
3. How much of the
4. What was the cost of goods manufactured for the year?
5. What was the unadjusted cost of goods sold for the year? Do not include any underapplied or overapplied
6. If overhead is applied to production on the basis of direct labor cost, what predetermined overhead rate was in effect during the year?
7. Was manufacturing overhead underapplied or overapplied? By how much?
8. Compute the ending balance in Work in Process. Assume that this balance consists entirely of goods started during the year. If $8,000 of this balance is direct labor cost, how much of it is direct materials cost? Applied overhead cost?
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