Parmitan Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $53,000 Indirect materials included in manufacturing overhead . . . . . . . . . . . . . . . $8,000 Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $62,000 Manufacturing overhead applied to work in process . . . . . . . . . . . . . . $41,000 Underapplied overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $8,000 Beginning Ending Inventories: Raw materials . . . . . . . . . . . . . . . . . . . …$24,000 $6,000 Work in process . . . . . . . . . . . . . . . . . . . ……………….$41,000 $38,000 Finished goods . . . . . . . . . . . . . . . . . …………………. $86,000 $93,000 Required: Prepare a schedule of cost of goods manufactured for the month. Prepare a schedule of cost of goods sold for the month.
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.
Parmitan Corporation has provided the following data concerning last month’s manufacturing operations.
Purchases of raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $53,000
Indirect materials included in manufacturing
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $62,000
Manufacturing overhead applied to work in process . . . . . . . . . . . . . . $41,000
Underapplied overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $8,000
Beginning Ending
Inventories: Raw materials . . . . . . . . . . . . . . . . . . . …$24,000 $6,000
Work in process . . . . . . . . . . . . . . . . . . . ……………….$41,000 $38,000
Finished goods . . . . . . . . . . . . . . . . . …………………. $86,000 $93,000
Required:
- Prepare a schedule of cost of goods manufactured for the month.
- Prepare a schedule of cost of goods sold for the month.
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