Mixing Company manufactured 1,900 units of its only product during 2022. The inputs for this production are as follows: 490 pounds of Material A at a cost of $1.90 per pound 340 pounds of Material H at a cost of $3.15 per pound 460 direct labor hours at $36 per hour
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.
Mixing Company manufactured 1,900 units of its only product during 2022. The inputs for this production are as follows:
490 pounds of Material A at a cost of $1.90 per pound
340 pounds of Material H at a cost of $3.15 per pound
460 direct labor hours at $36 per hour
The firm manufactured 2,259 units of the same product in 2021 with the following inputs:
580 pounds of Material A at a cost of $1.60 per pound
450 pounds of Material H at a cost of $2.90 per pound
480 direct labor hours at $34 per hour
The partial operational productivity of Material H in 2021 is:
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