The Bohol Company uses standard costing. The following data are available for October: Actual quantity of direct materials used 23,500 pounds Standard price of direct materials P2 per pound Material quantity variance P1,000 U The standard quantity of materials per pound allowed for October production is
The Bohol Company uses standard costing. The following data are available for October: Actual quantity of direct materials used 23,500 pounds Standard price of direct materials P2 per pound Material quantity variance P1,000 U The standard quantity of materials per pound allowed for October production is
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
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Problem 19E: Delano Company uses two types of direct labor for the manufacturing of its products: fabricating and...
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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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![The Bohol Company uses standard costing. The following data are available for October:
Actual quantity of direct materials used
23,500 pounds
Standard price of direct materials
P2 per pound
Material quantity variance
P1,000 U
The standard quantity of materials per pound allowed for October production is](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9c285bd6-3865-4731-9805-3176fae28a28%2F34c03678-0613-461e-bd6b-6f7112706dec%2Fzsu2oxh_processed.png&w=3840&q=75)
Transcribed Image Text:The Bohol Company uses standard costing. The following data are available for October:
Actual quantity of direct materials used
23,500 pounds
Standard price of direct materials
P2 per pound
Material quantity variance
P1,000 U
The standard quantity of materials per pound allowed for October production is
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