The following information has been taken from the cost records of Wil Company for the past year: Raw material used in production P326 Total manufacturing costs charged to production during the year (includes direct material, direct labor, and overhead equal to 60% of direct labor cost) 686 Cost of goods available for sale 826 Selling and Administrative expenses 25 Inventories Beginning Ending Raw Material P75 P 85 Work in Process 80 30 Finished Goods 90 110 Required: a. The cost of raw material purchased during the year b. Direct labor cost charged to production during the year c. Cost of Goods Manufactured d. Cost of Goods Sold
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 information has been taken from the cost records of Wil Company for the
past year:
Raw material used in production P326
Total manufacturing costs charged to production during the year (includes
direct material, direct labor, and overhead equal to 60% of direct labor cost)
686
Cost of goods available for sale 826
Selling and Administrative expenses 25
Inventories Beginning Ending
Raw Material P75 P 85
Work in Process 80 30
Finished Goods 90 110
Required:
a. The cost of raw material purchased during the year
b. Direct labor cost charged to production during the year
c. Cost of Goods Manufactured
d. Cost of Goods Sold
Step by step
Solved in 2 steps
