The following are the sales and purchases of Med Company: Units Unit price January Sales 300,000 $15 January Purchases: January 4 38,000 8.20 January 10 42,500 8.50 Janurary 16 50,200 8.10 January 24 49,000 8.40 At the end of the month, 60,000 units were on hand. Med's gross profit on sale for January was $1,200,800. The company uses periodic FIFO inventory costing system. What was the unit average cost of the January 1 inventory?
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 following are the sales and purchases of Med Company:
| Units | Unit price | |
| January Sales | 300,000 | $15 |
| January Purchases: | ||
| January 4 | 38,000 | 8.20 |
| January 10 | 42,500 | 8.50 |
| Janurary 16 | 50,200 | 8.10 |
| January 24 | 49,000 | 8.40 |
At the end of the month, 60,000 units were on hand. Med's gross profit on sale for January was $1,200,800. The company uses periodic FIFO inventory costing system.
What was the unit average cost of the January 1 inventory?
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