Pia Company completed 200 of customized jewelry. The product cost per unit: Direct materials P20,100 Direct labor 500 Factory overhead 1,000 P21,600 However, upon quality inspection, 12 units were sub-standard due to internal failure. The rework cost per unit of the prime cost: Direct materials P1,250 Direct labor 300 All goods put into the process are completed. How much is the charge to Factory overhead control?
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.
Pia Company completed 200 of customized jewelry.
The product cost per unit:
Direct materials P20,100
Direct labor 500
Factory
P21,600
However, upon quality inspection, 12 units were sub-standard due to internal failure.
The rework cost per unit of the prime cost:
Direct materials P1,250
Direct labor 300
All goods put into the process are completed.
How much is the charge to Factory overhead control?
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