Materials Labor and Overhead
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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
Transcribed Image Text:Alaskan Fisheries, Incorporated, processes salmon for various distributors and it uses the weighted-average method in its process
costing system. The company has two processing departments-Cleaning and Packing. Data relating to pounds of salmon processed
in the Cleaning Department during July are presented below:
Work in process inventory, July 1
Work in process inventory, July 31
Pounds of
Salmon
28,000
20,000
Equivalent units of production
Percent Completed
Labor and
Materials
Materials
100%
100%
A total of 460,000 pounds of salmon were started into processing during July. All materials are added at the beginning of processing
in the Cleaning Department.
Required:
Compute the Cleaning Department's equivalent units of production for materials and for labor and overhead in the month of July.
Overhead.
57%
60%
Labor and
Overhead
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