Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories. The master budget calls for the company to manufacture and sell 132,000 liters at a budgeted price of $315 per liter th year. The standard direct cost sheet for one liter of the preservative follows. Direct materials Direct labor (2 pounds @ $20) (0.5 hours @ $56) $40 28
Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories. The master budget calls for the company to manufacture and sell 132,000 liters at a budgeted price of $315 per liter th year. The standard direct cost sheet for one liter of the preservative follows. Direct materials Direct labor (2 pounds @ $20) (0.5 hours @ $56) $40 28
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter12: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 12.17E: Variable cost concept of product pricing Based on the data presented in Exercise 12-15, assume that...
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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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