The cost data relating to units of production for the year ending 31st December 2020 are as follows: Material (for 10,000 units actually produced) £10,000 Subcontracted Labour (for 10,000 units actually produced) £20,000 Production overheads £50,000 There are 1,000 units of inventory unsold at the year end. Production was half the normal activity level. Compute the inventories figure shown in the Statement of Financial Position as at 31st December
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.
The cost data relating to units of production for the year ending 31st December 2020 are as follows:
Material (for 10,000 units actually produced) £10,000
Subcontracted Labour (for 10,000 units actually produced) £20,000
Production
There are 1,000 units of inventory unsold at the year end. Production was half the normal activity level.
Compute the inventories figure shown in the
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