Roundhead Corporation’s 2021 manufacturing costs were as follows: Prime costs P 4,000,000 Depreciation of factory equipment 600,000 Depreciation of factory building 400,000 Salaries of janitor assigned in factory premises 120,000 Salesmen’s commission based on sales 200,000 Depreciation for delivery van 150,000 How much of these costs should be considered product / manufacturing costs or inventoried for external reporting purposes?
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.
Roundhead Corporation’s 2021 manufacturing costs were as follows:
Prime costs P 4,000,000
Depreciation of factory building 400,000
Salaries of janitor assigned in factory premises 120,000
Salesmen’s commission based on sales 200,000
Depreciation for delivery van 150,000
How much of these costs should be considered product / manufacturing costs or inventoried for external reporting purposes?
Step by step
Solved in 2 steps with 1 images
