Mickley Company’s predetermined overhead rate is $14.00 per direct labor-hour and its direct labor wage rate is $12.00 per hour. The following information pertains to Job A-500: Direct materials . . . . . . . . . . . . . $230 Direct labor . . . . . . . . . . . . . . . . $108 Required: 1. What is the total manufacturing cost assigned to Job A-500? 2. If Job A-500 consists of 40 units, what is the average cost assigned to each unit included in the job
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.
EXERCISE 3–3 Computing
Mickley Company’s predetermined
$12.00 per hour. The following information pertains to Job A-500:
Direct materials . . . . . . . . . . . . . $230 Direct labor . . . . . . . . . . . . . . . . $108
Required:
1. What is the total
2. If Job A-500 consists of 40 units, what is the average cost assigned to each unit included in the job
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