Sales are expected to be 15,500 units at $46.00 each. Each unit requires 3 pounds of direct materials at $2.30 per pound. Each unit requires 2.0 hours of direct labor at $12.00 per hour. Manufacturing overhead is $4.80 per unit. Beginning direct materials inventory is $5,300.00. Ending direct materials inventory is $6,800.00. Selling and administrative costs totaled $138,570. 1. Determine Ceder's budgeted cost of goods sold. 2. Complete Ceder's budgeted income statement.
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.
- Sales are expected to be 15,500 units at $46.00 each.
- Each unit requires 3 pounds of direct materials at $2.30 per pound.
- Each unit requires 2.0 hours of direct labor at $12.00 per hour.
- Manufacturing
overhead is $4.80 per unit. - Beginning direct materials inventory is $5,300.00.
- Ending direct materials inventory is $6,800.00.
- Selling and administrative costs totaled $138,570.
1. Determine Ceder's budgeted cost of goods sold.
2. Complete Ceder's
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