Record the following journal entries for Miller Company: 6. Purchased materials on account, $5,000. 7. Used $4,000 in direct materials and $400 in indirect materials in production. 8. Incurred $7,000 in labor costs, of which 80% was direct labor.
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.
Record the following
|
6.
|
Purchased materials on account,
$5,000.
|
|
7.
|
Used
$4,000
in direct materials and
$400
in indirect materials in production. |
|
8.
|
Incurred
$7,000
in labor costs, of which
80%
was direct labor. |
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