Nurikamal Technology Inc. manufactures heavy duty flash lights. January and February operations were identical in every way except for the planned production. January had a production denominator of 90703 units. February had a production denominator of 78657 units. Fixed manufacturing costs totaled $209554. Sales for both months totaled 75989 units with variable manufacturing costs of $7 per unit. Selling and administrative costs were $5 per unit variable and $58826 of fixed. The selling price was $19 per unit. Required: Under Variable Costing Approach 1. Calculate cost per unit for January 2. Compute cost per unit for February 3. Compute COGS for January
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.
Nurikamal Technology Inc. manufactures heavy duty flash lights. January and February operations were identical in every way except for the planned production.
January had a production denominator of 90703 units.
February had a production denominator of 78657 units.
Fixed
Sales for both months totaled 75989 units with variable manufacturing costs of $7 per unit. Selling and administrative costs were $5 per unit variable and $58826 of fixed. The selling price was $19 per unit.
Required:
Under Variable Costing Approach
1. Calculate cost per unit for January
2. Compute cost per unit for February
3. Compute COGS for January
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