Marcelino Co.'s March 31 inventory of raw materials is $88,000. Raw materials purchases in April are $540,000, and factory payroll cost in April is $382,000. Overhead costs incurred in April are: indirect materials, $56,000; indirect labor, $25,000; factory rent, $31,000; factory utilities, $23,000; and factory equipment depreciation, $52,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $630,000 cash in April. Costs of the three jobs worked on in April follow. Job 306 Job 307 Job 308 Balances on March 31 Direct materials $ 32,000 $ 37,000 Direct labor 25,000 16,000 Applied overhead 12,500 8,000 Costs during April Direct materials 138,000 215,000 $ 105,000 Direct labor 104,000 151,000 102,000 Applied overhead ? ? ? Status on April 30 Finished (sold) Finished (unsold) In process
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.
Problem 19-1A Production costs computed and recorded; reports prepared LO P1, P2, P3, P4
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Marcelino Co.'s March 31 inventory of raw materials is $88,000. Raw materials purchases in April are $540,000, and
| Job 306 | Job 307 | Job 308 | ||||||||||
| Balances on March 31 | ||||||||||||
| Direct materials | $ | 32,000 | $ | 37,000 | ||||||||
| Direct labor | 25,000 | 16,000 | ||||||||||
| Applied overhead | 12,500 | 8,000 | ||||||||||
| Costs during April | ||||||||||||
| Direct materials | 138,000 | 215,000 | $ | 105,000 | ||||||||
| Direct labor | 104,000 | 151,000 | 102,000 | |||||||||
| Applied overhead | ? | ? | ? | |||||||||
| Status on April 30 | Finished (sold) | Finished (unsold) | In process | |||||||||
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