September 1, purchased raw materials ($120 million direct materials, $10 million indirect materials) for $130 million cash September 2, moved all the raw material into production. September 22 the company records applied overhead at the rate of 80% of direct material costs September 29, paid cash for manufacturing labor services, $220 million ($200 million direct labor and $20 million indirect labor). September 30, actual costs of other overhead items was calculated to be $76 million. September 30, all the goods charged into production were completed and moved to Finished Goods Inventory Account. September 30, 95% of the completed goods were sold for cash at a markup of 15 % of the cost before adjusting for over or under applied overhead costs. i need only journal.
Cost-Volume-Profit Analysis
Cost Volume Profit (CVP) analysis is a cost accounting method that analyses the effect of fluctuating cost and volume on the operating profit. Also known as break-even analysis, CVP determines the break-even point for varying volumes of sales and cost structures. This information helps the managers make economic decisions on a short-term basis. CVP analysis is based on many assumptions. Sales price, variable costs, and fixed costs per unit are assumed to be constant. The analysis also assumes that all units produced are sold and costs get impacted due to changes in activities. All costs incurred by the company like administrative, manufacturing, and selling costs are identified as either fixed or variable.
Marginal Costing
Marginal cost is defined as the change in the total cost which takes place when one additional unit of a product is manufactured. The marginal cost is influenced only by the variations which generally occur in the variable costs because the fixed costs remain the same irrespective of the output produced. The concept of marginal cost is used for product pricing when the customers want the lowest possible price for a certain number of orders. There is no accounting entry for marginal cost and it is only used by the management for taking effective decisions.
September 1, purchased raw materials ($120 million direct materials, $10 million indirect materials) for $130 million cash
September 2, moved all the raw material into production.
September 22 the company records applied
September 29, paid cash for manufacturing labor services, $220 million ($200 million direct labor and $20 million indirect labor).
September 30, actual costs of other overhead items was calculated to be $76 million.
September 30, all the goods charged into production were completed and moved to Finished Goods Inventory Account.
September 30, 95% of the completed goods were sold for cash at a markup of 15 % of the cost before adjusting for over or under applied overhead costs.
i need only journal.
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