Question 16 The standard cost of product 777 includes 2.7 units of direct materials at $5.7 per unit. During August, the company bought 29,300 units of materials at $5.80 and used those materials to produce 11,200 units. Compute the total, price, and quantity variances for materials. Total materials variance $ Materials price variance $ Materials quantity variance $
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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